Babylon Faces Consensus Flaw Threatening Bitcoin Staking and Block Production

Babylon, a Bitcoin staking protocol, is under scrutiny due to a flaw impacting consensus and block production.

A disclosed issue affects Babylon's BLS vote extension used by validators to confirm new blocks.
Validators can submit votes without the required block hash, which identifies approved blocks.
This omission can cause validators to fail during vote checks, especially at epoch boundaries.
If multiple validators are affected simultaneously, block production may slow down.
The bug has not been exploited but remains unresolved at the time of reporting.

Babylon recently received $15 million funding from a16z Crypto to enhance Bitcoin-native DeFi tools. It also partnered with Aave Labs for Bitcoin-backed lending, expected to launch in April.

Addressing this consensus risk is crucial as Babylon expands its role in Bitcoin DeFi to maintain stability and trust.