Bitcoin News Today: Aave's ETHLend 2.0 Challenges DeFi's Wrapped Token Reliance with Native Bitcoin

Aave's founder Stani Kulechov has confirmed the 2026 relaunch of ETHLend, the project's original peer-to-peer lending platform, with a key innovation: the use of native Bitcoin as collateral rather than wrapped tokens. The announcement, made on X, signals a return to ETHLend's 2017 roots while integrating modern DeFi advancements. The relaunch aims to address liquidity and efficiency gaps in decentralized finance by combining peer-to-peer (P2P) lending with the scalability of pooled liquidity models.

ETHLend, which rebranded to Aave in 2018, initially operated as a P2P protocol but shifted to a liquidity-pool model during the 2018 bear market to improve scalability and user experience. The new ETHLend 2.0 will reportedly retain P2P mechanics but enhance them with today's deeper liquidity and faster on-chain execution. Kulechov emphasized that the platform will leverage real Bitcoin - unlike most DeFi protocols that rely on wrapped BTC - as collateral, a move that could streamline cross-chain interactions and reduce reliance on synthetic assets.

The DeFi community has reacted with a mix of nostalgia and curiosity. Screenshots of ETHLend's 2018 interface resurfaced on social media, highlighting the project's evolution from a niche P2P experiment to a multi-billion-dollar ecosystem. Analysts speculate that the relaunch may reintroduce utility for the legacy LEND token, though no details have been confirmed. The integration of native Bitcoin also aligns with broader industry trends, as institutional demand for non-wrapped BTC grows amid regulatory scrutiny of synthetic assets.

While the announcement focuses on ETHLend's revival, the broader crypto market remains bearish. Bitcoin recently fell below $90,000, with its relative strength index (RSI) approaching oversold territory, and Ethereum traded below key moving averages, underscoring weak technical conditions. Despite this, Kulechov's roadmap suggests confidence in Bitcoin's role as a foundational asset for DeFi, particularly as onchain infrastructure matures. The use of native BTC could also reduce counterparty risks associated with wrapped tokens, a critical concern for institutional participants.

The relaunch underscores Aave's strategy to expand beyond liquidity pools and diversify its product offerings. While ETHLend 2.0's exact structure - whether standalone or integrated with Aave - remains unclear, the project's focus on P2P mechanisms hints at a complementary approach to its existing services. This could cater to users seeking predictable counterparty relationships, a niche not fully addressed by automated market makers.

As the DeFi space evolves, ETHLend's revival with native Bitcoin support positions Aave to capitalize on both legacy userbases and emerging institutional demand. With 2026 on the horizon, the market will closely watch how this hybrid model balances innovation with the efficiency gains that propelled Aave to prominence.