Babylon

Babylon is a Bitcoin staking protocol designed to allow BTC holders to stake their bitcoin directly on Proof-of-Stake (PoS) blockchains without using wrapping, bridging, or relinquishing custody of their assets. Launched in April 2025, Babylon is a Layer-1 blockchain that integrates native Bitcoin staking. Originating from research at Stanford University, the project became the second-largest restaking protocol by total value locked, trailing only EigenLayer. The protocol enables seamless staking through UTXO-based contracts and aims to leverage Bitcoin’s security to bolster PoS blockchains. ^[2]​

History

Babylon’s inception can be traced back to a blockchain research lab at Stanford University, founded by David Tse and Fisher Yu. Tse, a professor of engineering and a member of the National Academy of Engineering, along with Yu, led Babylon's development with the goal of uniting Bitcoin’s security model with the growing ecosystem of PoS blockchains. ^[3] Babylon disclosed an 18 million Series A round that closed in December 2023. The company attracted investment from investors such as Polychain Capital, Hack VC, and others, bringing its total disclosed funding to approximately $26 million by April 2024. ^[4]​

Babylon's journey to mainnet involved planning and execution. The project published a litepaper in July 2023, proposing its native trustless Bitcoin staking concept. It launched a public Bitcoin staking testnet in February 2024, which paved the way for Mainnet Phase 1 in August 2024. By December 2024, Babylon reported a total value locked (TVL) of $3.63 billion. The Genesis mainnet was officially launched on April 10, 2025, with an airdrop of 600 million BABY tokens from a total supply of 10 billion. ^[5]​

Technology and Architecture

Babylon allows Bitcoin holders to engage in native staking through UTXO-based contracts. This method enables users to maintain full custody of their assets while staking and securing PoS networks referred to as Bitcoin Secured Networks (BSNs). This staking model leverages Finality Providers, who secure the network on behalf of stakers. ^[6]​

Babylon's approach extends Bitcoin's security model to other blockchains through a process that eliminates the need for traditional, often centralized, staking intermediaries. By doing so, Babylon avoids the risks associated with wrapping or bridging tokens. The protocol has executed an experiment using native BTC as collateral to borrow USDC on the Ethereum mainnet, which the team claimed was the first implementation of trust-minimized native Bitcoin-backed borrowing. ^[7]​

Products and Use Cases

A product in the Babylon ecosystem is the BABY token, which serves as a native utility and governance token. Introduced during the Genesis mainnet launch, the token can be staked in exchange for rewards and is used for participating in governance processes. Babylon also introduced Cube, a liquid staking solution that allows staking BABY for cBABY to be used in the broader crypto ecosystem. As of September 2025, BABY staking was operational, and a bonus airdrop for early BTC stakers was distributed. ^[8]​

The Trustless Bitcoin Vaults (TBV) allow Bitcoin to be used as collateral within decentralized finance (DeFi) applications while remaining self-custodial. In partnership with platforms like Aave, Babylon aims to integrate native BTC into lending flows, thus enhancing the utility of Bitcoin in DeFi. ^[3]​

Tokenomics

The BABY token anchors the Babylon ecosystem. With a total supply of 10 billion tokens, 6% were released through an initial airdrop to early users during the mainnet launch in April 2025. ^[2] The tokenomics model aims to support the network's growth and provides staking rewards, incentivizing participation within the network. Further efforts include planning to optimize token utility and address inflation concerns by shifting token incentives to encourage TBV usage. ^[5]​

Partnerships and Adoption

Babylon has established partnerships within the blockchain space. One collaboration is with Aave, which supports integrating native BTC collateral into Aave's lending protocols. Additionally, the protocol has formed partnerships with several blockchain projects to broaden its platform’s reach, including collaborations with Ethereum rollups and various Cosmos chains. ^[1] In its mission to expand its suite of offerings, Babylon supports the Inter-Blockchain Communication (IBC) protocol as a Cosmos-native chain, facilitating interoperability across blockchains. ^[3]​

Funding and Investors

Babylon raised funding through its seed and Series A rounds, with a collective amount of $26 million by early 2024. Its investors include investors such as Polychain Capital, Hack VC, and a16z, which backed its development efforts. This investor interest reflects attention from the venture community. ^[9]​

Key Metrics and Performance

As of mid-2025, Babylon ranked second among restaking protocols by total value locked, with approximately 10 billion worth of native BTC through its system, with approximately 60,000 BTC staked, valued at roughly $5–6 billion at the time referenced.