In my view, the biggest strength of TBV is also its simplest to state: it replaces a trusted intermediary with a cryptographic proof, rather than trying to make the intermediary more trustworthy. David's explanation on the founders call was direct about this: if you remove the middleman, cryptography has to replace them, which requires proof systems that let BTC redeem trustlessly based on what happens on another chain. That's a harder problem than most wrapped-asset models even attempt to solve.
The challenges sit right where you'd expect them to. BABE, the proof verification system behind this, is new, developed with outside cryptography researchers, and reduces cost and overhead, but new verification infrastructure hasn't been tested under sustained adversarial load yet. Smart contract risk in the connections to lending markets is separate and additive, not solved by the vault design itself.
I'd rather see this proven under stress than assumed from the architecture. The question is whether cost reductions hold once usage scales past early adopters. I'm watching audit disclosures and how the system behaves during its first real liquidation cascade.
@BabylonLabs_io #baby $BABY
The challenges sit right where you'd expect them to. BABE, the proof verification system behind this, is new, developed with outside cryptography researchers, and reduces cost and overhead, but new verification infrastructure hasn't been tested under sustained adversarial load yet. Smart contract risk in the connections to lending markets is separate and additive, not solved by the vault design itself.
I'd rather see this proven under stress than assumed from the architecture. The question is whether cost reductions hold once usage scales past early adopters. I'm watching audit disclosures and how the system behaves during its first real liquidation cascade.
@BabylonLabs_io #baby $BABY