I checked whether the treasury wallet could actually recover the Babylon stake.
It could sign the UTXOs funding the deposit.
Then I ran the ownership check against the StakerPk committed inside the staking output.
“Key not found.”
The treasury wallet was supposed to control that key. The recovery system still could not produce it when asked.
Nothing in the deposit flow would expose that.
The funding transaction signs. The stake confirms. The delegation becomes active.
The break only appears when the BTC needs to move again.
Both the normal withdrawal path and early unbonding still depend on the staker key. Covenant approval does not replace it.
So the BTC was never proven recoverable when it entered Babylon. It was only proven fundable.
“Key not found” looks harmless until it is attached to the only key that can bring the BTC home.
#BABY $BABY @BabylonLabs_io
$HOME
$TUT
It could sign the UTXOs funding the deposit.
Then I ran the ownership check against the StakerPk committed inside the staking output.
“Key not found.”
The treasury wallet was supposed to control that key. The recovery system still could not produce it when asked.
Nothing in the deposit flow would expose that.
The funding transaction signs. The stake confirms. The delegation becomes active.
The break only appears when the BTC needs to move again.
Both the normal withdrawal path and early unbonding still depend on the staker key. Covenant approval does not replace it.
So the BTC was never proven recoverable when it entered Babylon. It was only proven fundable.
“Key not found” looks harmless until it is attached to the only key that can bring the BTC home.
#BABY $BABY @BabylonLabs_io
$HOME
$TUT