I ran through the Babylon TBV public testnet end-to-end and found that native BTC collateralized lending is more complex than I expected.
At the end of May, Babylon’s Trustless Bitcoin Vaults went live on the public testnet, and I walked through the entire process. I used testnet BTC, deposited it as collateral into the Bitcoin Spoke on Aave V4, and borrowed USDC. Compared with WBTC, it’s more of a hassle: you have to wait for Bitcoin confirmations, and the ZK proofs add extra time. Babylon locks the UTXOs with Taproot so the BTC can’t leave the main chain—settlement relies on BitVM3. It removes custodial risk, but the user experience is rougher than wrapped assets.
WBTC and cbBTC are faster, but you have to trust the custodian. Babylon TBV depends only on cryptography and the Bitcoin network. This trade-off reminds me of the early days of the Lightning Network. Babylon and Aave announced their partnership in December last year; the original plan was to launch in April, but it’s still on the testnet. Governance frictions have slowed things down.
On the testnet, the borrowing interest rate is determined by the Aave model, but the LTV is clearly more conservative. Since Bitcoin produces a block every ten minutes, the settlement responsiveness is not as quick as on Ethereum. On June 25, Babylon announced a partnership with Aegis, planning to roll out fixed rates in the fourth quarter. GoMining planned in early May to integrate TBV, starting with the first 1,000 BTC.
Binance Square held an event from July 23 to August 5, distributing 2,390,000 BABY rewards, requiring the content to be centered around TBV. I submitted a feedback form. The borrow/repay flows were smooth, but there’s still room to optimize the frontend. Babylon’s TBV isn’t suitable for retail users who prioritize efficiency, but for institutions that refuse to compromise on custody, it’s the only viable DeFi entry point right now.
@BabylonLabs_io $BABY
#baby
At the end of May, Babylon’s Trustless Bitcoin Vaults went live on the public testnet, and I walked through the entire process. I used testnet BTC, deposited it as collateral into the Bitcoin Spoke on Aave V4, and borrowed USDC. Compared with WBTC, it’s more of a hassle: you have to wait for Bitcoin confirmations, and the ZK proofs add extra time. Babylon locks the UTXOs with Taproot so the BTC can’t leave the main chain—settlement relies on BitVM3. It removes custodial risk, but the user experience is rougher than wrapped assets.
WBTC and cbBTC are faster, but you have to trust the custodian. Babylon TBV depends only on cryptography and the Bitcoin network. This trade-off reminds me of the early days of the Lightning Network. Babylon and Aave announced their partnership in December last year; the original plan was to launch in April, but it’s still on the testnet. Governance frictions have slowed things down.
On the testnet, the borrowing interest rate is determined by the Aave model, but the LTV is clearly more conservative. Since Bitcoin produces a block every ten minutes, the settlement responsiveness is not as quick as on Ethereum. On June 25, Babylon announced a partnership with Aegis, planning to roll out fixed rates in the fourth quarter. GoMining planned in early May to integrate TBV, starting with the first 1,000 BTC.
Binance Square held an event from July 23 to August 5, distributing 2,390,000 BABY rewards, requiring the content to be centered around TBV. I submitted a feedback form. The borrow/repay flows were smooth, but there’s still room to optimize the frontend. Babylon’s TBV isn’t suitable for retail users who prioritize efficiency, but for institutions that refuse to compromise on custody, it’s the only viable DeFi entry point right now.
@BabylonLabs_io $BABY
#baby