Most people think Bitcoin's biggest limitation is that it doesn't generate yield.
I think it's something deeper.
Bitcoin has already earned the trust to become collateral.
Major financial institutions now accept BTC against loans. Regulators have opened the door for Bitcoin-backed collateral in regulated derivatives. The market has largely answered one question:
Can Bitcoin be trusted as collateral?
The harder question is different.
Can native Bitcoin be used as collateral without giving up the properties that made it valuable in the first place?
That's where today's infrastructure starts to break down.
Most on-chain lending still asks Bitcoin to become something else first. Wrap it. Bridge it. Hand it to another system. Every extra step adds new trust assumptions and new risks.
Yet on-chain credit has already grown into a market worth roughly $64B in TVL, while only a small share of Bitcoin is actively participating.
The bottleneck doesn't look like demand anymore.
It looks like infrastructure.
Babylon Trustless Bitcoin Vaults (TBV) take a different approach. Instead of changing Bitcoin to fit existing lending systems, they build the lending primitive around native BTC itself.
Loan conditions are defined before credit is issued. Redemption is enforced through cryptographic proof instead of intermediaries. No wrapping. No bridging. No additional trust layer.
That's the part I find most interesting.
The opportunity isn't just bringing more Bitcoin into DeFi.
It's building a credit market where Bitcoin can stay Bitcoin.
Starting with native Bitcoin-backed borrowing through @aave v4 feels less like another integration and more like the first step toward that future.
#baby $BABY
@BabylonLabs_io
I think it's something deeper.
Bitcoin has already earned the trust to become collateral.
Major financial institutions now accept BTC against loans. Regulators have opened the door for Bitcoin-backed collateral in regulated derivatives. The market has largely answered one question:
Can Bitcoin be trusted as collateral?
The harder question is different.
Can native Bitcoin be used as collateral without giving up the properties that made it valuable in the first place?
That's where today's infrastructure starts to break down.
Most on-chain lending still asks Bitcoin to become something else first. Wrap it. Bridge it. Hand it to another system. Every extra step adds new trust assumptions and new risks.
Yet on-chain credit has already grown into a market worth roughly $64B in TVL, while only a small share of Bitcoin is actively participating.
The bottleneck doesn't look like demand anymore.
It looks like infrastructure.
Babylon Trustless Bitcoin Vaults (TBV) take a different approach. Instead of changing Bitcoin to fit existing lending systems, they build the lending primitive around native BTC itself.
Loan conditions are defined before credit is issued. Redemption is enforced through cryptographic proof instead of intermediaries. No wrapping. No bridging. No additional trust layer.
That's the part I find most interesting.
The opportunity isn't just bringing more Bitcoin into DeFi.
It's building a credit market where Bitcoin can stay Bitcoin.
Starting with native Bitcoin-backed borrowing through @aave v4 feels less like another integration and more like the first step toward that future.
#baby $BABY
@BabylonLabs_io