Author: Climber, Finance
While the cryptocurrency market is in a state of chaos with the decline of altcoins and the battle between Meme coins and VC coins, there are still projects quietly waiting for the bull market to come. Babylon is a typical representative, aiming to lead a new cycle of the Bitcoin ecosystem narrative.
Bitcoin purists believe that Bitcoin is like gold and you should hold onto it. In the world of PoS (Proof of Stake), holding coins means making money. The basic principle is that stakers lock their personal tokens to become validators in the PoS system, and the protocol maintains the integrity of the staking process through a reward and penalty mechanism.
Babylon’s Bitcoin staking protocol can transform native Bitcoin into stakable assets for any PoS system, releasing $1.5 trillion in value from 21 million BTC. This vision has allowed Babylon to secure $96 million in funding for three consecutive years. The former founder of Polygon even stated that compared to projects like Eigenlayer, Babylon is severely underestimated.
In light of this, Finance had the opportunity to interview Trudy Liuu, the partnership lead at Babylon, to understand the value of Babylon and the technical principles that allow them to ensure stability and security of Bitcoin asset staking.
1. Congratulations on Babylon recently completing a $70 million funding round. Could you briefly introduce Babylon and the team behind the project?
Trudy: Babylon is a secure sharing protocol that brings unmatched security of Bitcoin into the decentralized world. The latest Bitcoin staking protocol allows Bitcoin holders to stake their Bitcoin in a trustless and self-custodial way to provide cryptographic economic security for PoS systems. Babylon was founded by David Tse, a member of the National Academy of Engineering and a renowned professor at Stanford University. The team consists of developers, researchers, and industry experts from different countries.
2. What factors led your team to create and develop this project? What challenges does the project face in its development?
Trudy: Babylon is creating the first native Bitcoin staking protocol, bringing the security and decentralization of Bitcoin to PoS blockchains and Rollups. This addresses two major challenges – it allows Bitcoin holders to earn staking rewards trustlessly for the first time and enables PoS networks to incentivize and diversify chain security economically.
3. Babylon is positioned as a Bitcoin staking protocol. How does the project operate? What are the operational mechanisms and principles?
Trudy: We have successfully used existing Bitcoin script and advanced cryptographic primitives to simulate Bitcoin staking and slashing. In other words, we have managed to build a minimal Bitcoin staking contract residing on the Bitcoin chain, similar to how smart contracts reside on other blockchains.
4. For BTC stakers, the security of staked assets is of utmost concern. How do you ensure the security of user assets? How is the staking yield designed?
Trudy: The Babylon Bitcoin staking protocol allows Bitcoin holders to lock their Bitcoin in a self-custodial manner without any third-party bridges and without permission. We also have the Coinspect team, a top security company in the Bitcoin script field, and the Zellic team, which is participating in building the next version of the Babylon code.
5. The project’s whitepaper mentions that Babylon follows a remote staking approach, and you have overcome the lack of smart contracts on the Bitcoin chain by combining cryptographic technology, consensus protocols, and Bitcoin script language. How did you achieve this process?
Trudy: Unlike most other blockchains, the Bitcoin chain sacrificed programmability for stability. You cannot simply write code (such as smart contracts) to instruct the Bitcoin chain on how to verify evidence of malicious behavior and slash the relevant Bitcoin stakeholders. Babylon aims to establish a trustless and non-custodial Bitcoin staking protocol. For this, people must find a way (through code) to teach the Bitcoin chain how to properly handle staking and slashing (using the Bitcoin script language).
6. Please provide an update on the project’s current progress. What are some impressive data performances to date, such as TVL, ecosystem projects, and interaction data?
Trudy: The Babylon ecosystem involves 87 partner projects, including BTC L2s, DeFi, Liquid (Re)staking, Wallet & Custodians, Cosmos Ecosystem, Finality Provider, and Rollup Infrastructure.
7. In the current Bitcoin ecosystem, there are numerous projects in various sectors, especially in the Bitcoin L2 sector. What do you think is Babylon’s advantage? How does Babylon connect with Bitcoin L2?
Trudy: Babylon is a secure sharing protocol that brings unmatched security of Bitcoin into the decentralized world. The latest Bitcoin staking protocol allows Bitcoin holders to stake their Bitcoin in a trustless and self-custodial way, providing cryptographic economic security for PoS systems. Babylon can provide Bitcoin security for Bitcoin L2.
Thank you.
