Babylon Labs has provided more detail on how its trustless Bitcoin vault infrastructure would be governed if native BTC is onboarded as collateral for Aave V4. The explanation was posted in response to questions on an Aave governance forum thread tied to the proposal.
The company said the TBV contracts would operate under two separate multisigs, with immediate pause and unpause powers and a five-day timelock for upgrades and configuration changes. It also said final multisig members and the relevant Safe, timelock and contract addresses would be disclosed in the eventual AIP.
How the pause mechanism would work
Babylon said a pause cannot move or release collateral from the vault. If a vault is paused, depositors would be unable to withdraw or redeem their BTC, meaning the assets remain locked and continue backing any Aave debt tied to them.
The company said there is no timelock on pause actions. Both governing multisigs would be able to pause and unpause immediately. Babylon argued that a delay would reduce the usefulness of a pause during an active exploit, while an immediate unpause is also necessary because a paused state blocks repayments and liquidations as well as user exits.
Two multisigs with separate roles
According to Babylon, the TBV contracts would be overseen by an Interim Governance Safe set up as a 4-of-7 multisig. Its listed seats are Babylon, OZ21 of Informal Systems, DSRV, Xangle, Hashkey, B14G and Cradle.
A second body, the Emergency Guardian, would be a 3-of-5 Safe. Babylon said its seats would be held by Aave Labs, LlamaRisk, Babylon, BedRock and one member still marked as to be determined.
Babylon said the Emergency Guardian has its own ability to unpause. In its description, that means Interim Governance could not keep the system paused on its own if there were no valid incident or if a resolved incident was not followed by reopening the system.
Aave DAO control over integration contracts
Babylon said Aave DAO would receive its own pauser role for the TBV integration contracts on the Aave side, including the Aave adapter and related support contracts. That would allow the DAO to pause the integration independently of the Babylon-side multisigs if it detects an incident.
It also said Aave DAO would fully control the Babylon Spoke and the Hubs, including upgrades, parameter changes, pause, freeze and unpause functions. For the BTC Vault Swap Spoke, Babylon said Aave DAO would remain the admin with upgrade rights, but that configuration authority is planned to be delegated to a 2-of-3 multisig made up of Aave Labs, LlamaRisk and Babylon Labs.
Timelock on changes and what comes next
Babylon said every TBV contract upgrade and each configuration change would be subject to a five-day timelock before execution. The Emergency Guardian would also be able to cancel any queued proposal during that window, which Babylon said is intended to give time for review and reaction before changes take effect.
The immediate next confirmed step is further disclosure in the AIP. Babylon said the final multisig composition, along with all Safe addresses, timelock addresses and contract addresses, will be included there.
Source: governance.aave.com