Yesterday I was paying a few bills and caught myself looking at an asset I’ve been holding for a long time, thinking: “Do I really want to sell part of this just because I need some liquidity right now?”
That’s exactly the thought that brought me back to Trustless Bitcoin Vaults (TBV) from @BabylonLabs_io .
Bitcoin is huge, yet Babylon’s docs point out that around 1% or less of BTC is currently used in DeFi. When you think about it, that gap makes sense.
Using BTC elsewhere has often meant doing something to it first: wrap it, bridge it, or rely on an intermediary.
TBV takes a different route.
The idea is to keep Bitcoin native while making it usable as collateral. On Babylon’s public testnet, the first use case connects native BTC collateral with Aave v4, where users can experiment with borrowing supported assets such as USDC or USDT on Ethereum.
That’s the part I like most: I don’t have to think of Bitcoin as something that must be converted into another representation before it becomes useful.
I spent some time looking through the testnet parameters too. The current collateral factor is 78%, which made the whole thing feel less like a vague “Bitcoin DeFi” idea and more like an actual borrowing product being tested.
And honestly, the everyday logic is pretty simple.
People borrow against houses, businesses and other long-term assets because they may need liquidity without wanting to sell what they own.
Why shouldn’t native Bitcoin eventually work the same way?
There are still things to test and improve — that’s what a public testnet is for — but I like that Babylon is tackling the problem from the native BTC side instead of starting with another wrapped version of Bitcoin.
I’m planning to go through more of the borrow, repay and redeem flow next. Reading about TBV is useful, but actually clicking through the product makes the idea much easier to understand.
$BABY #baby
$BANK $LA
That’s exactly the thought that brought me back to Trustless Bitcoin Vaults (TBV) from @BabylonLabs_io .
Bitcoin is huge, yet Babylon’s docs point out that around 1% or less of BTC is currently used in DeFi. When you think about it, that gap makes sense.
Using BTC elsewhere has often meant doing something to it first: wrap it, bridge it, or rely on an intermediary.
TBV takes a different route.
The idea is to keep Bitcoin native while making it usable as collateral. On Babylon’s public testnet, the first use case connects native BTC collateral with Aave v4, where users can experiment with borrowing supported assets such as USDC or USDT on Ethereum.
That’s the part I like most: I don’t have to think of Bitcoin as something that must be converted into another representation before it becomes useful.
I spent some time looking through the testnet parameters too. The current collateral factor is 78%, which made the whole thing feel less like a vague “Bitcoin DeFi” idea and more like an actual borrowing product being tested.
And honestly, the everyday logic is pretty simple.
People borrow against houses, businesses and other long-term assets because they may need liquidity without wanting to sell what they own.
Why shouldn’t native Bitcoin eventually work the same way?
There are still things to test and improve — that’s what a public testnet is for — but I like that Babylon is tackling the problem from the native BTC side instead of starting with another wrapped version of Bitcoin.
I’m planning to go through more of the borrow, repay and redeem flow next. Reading about TBV is useful, but actually clicking through the product makes the idea much easier to understand.
$BABY #baby
$BANK $LA