Bitcoin paves the way for trustless vaults. More than $1.3 trillion… locked up. Untouchable. Almost unusable in DeFi. But Babylon aims to shake things up, with no compromise on decentralization.
Trustless vaults: a first for Bitcoin
With its new trustless vaults, Babylon offers BTC holders the ability to lock them up without an intermediary. No centralized bridge, no opaque wrapped token: just smart contracts… on Bitcoin.
Impossible? Not anymore. Babylon relies on BitVM3, an advanced version of BitVM, finally allowing Bitcoin to interact with complex logic outside its original blockchain. Through garbled circuits and more compact fraud proofs, BitVM3 makes off-chain execution possible while maintaining a verifiable cryptographic link to Bitcoin.
BTC becomes DeFi collateral… without a bridge
In practical terms, these new vaults allow using BTC as collateral for lending, stablecoin, or staking protocols on other blockchains. With a strong principle: BTC remains locked on-chain, and withdrawals are only possible with a valid cryptographic proof, directly verified by the Bitcoin network.
This approach circumvents a historical weakness of the protocol: the absence of ‘covenants’ (restrictive conditions on future transactions). Until now, their absence prevented any form of control or programmable logic on BTC funds. Babylon creates this logic… outside the protocol, without compromising the network’s native security.
Yield for BTC hodlers
With Babylon, bitcoin holders can also generate yield: by staking their BTC, they participate in securing partner proof-of-stake networks and receive rewards in BABY, the protocol’s native token.
A new form of profitability for a historically passive asset. And an opportunity for DeFi to tap into the greatest store of value in Web3.
Massive potential, a risky bet?
Bitcoin is a safe haven. Babylon wants to turn it into an engine. With over $5 billion already secured in its staking protocol, the project is progressing rapidly. But it’s a high-stakes game: any flaw, any bug in these vaults, and the credibility of the trustless BTC ecosystem falters.
Yet the goal is clear: put bitcoin to work, never compromising its sovereignty. And if Babylon succeeds, DeFi could truly scale up.
