Babylon Launches Trustless Bitcoin Vaults for DeFi Staking Protocol
Babylon has introduced trustless vaults for Bitcoin (BTC) as part of its $5 billion DeFi staking protocol. Key points include:
- The vaults allow BTC holders to deposit tokens without relying on centralized entities.
- Trustless vaults utilize smart contracts for security and rule enforcement.
- Users can use BTC as collateral in DeFi applications, earn yield by staking, and receive rewards in Babylon's native token, BABY.
- This initiative aims to leverage Bitcoin's significant market value, which accounts for over 60% of the total cryptocurrency market cap.
- Current bridges for Bitcoin on external blockchains depend on centralized third parties, complicating the creation of trustless options.
- Babylon's solution includes on-chain vaults linked to specific smart contract protocols on external chains using the BitVM3 framework, enhancing efficiency.
- Withdrawals from the vaults require verification via zero-knowledge proofs on the Bitcoin chain, negating the need for mutual trust.