The absurd mismatch between TVL narratives and token value
Following Babylon for more than a year, I have to say a few unkind things today.
Look at the PR draft for @BabylonLabs_io —right away it says “$5 billion+ TVL” and “the leading BTC native staking.” It sounds like the ultimate answer to BTCFi. But open Binance and take a look at baby’s price: from an ATH of $0.166 down to a low of $0.0107—a drop of more than 93%, with market cap now only $78 million. A protocol that locked more than $5 billion worth of Bitcoin has a token market cap of less than 1.5% of its TVL. This isn’t undervaluation; it’s a direct rejection by the market of the value-capture mechanism.
What’s even more ironic is the yield. The official dashboard shows BTC staking APR only 0.04%-0.67%. Early participants who locked for half a year only got an ROI of 0.6%. For this kind of return, you have to take on the slash risk caused by Finality Provider double-signing, accept unlock periods lasting days, and receive BABY and a bunch of unknown BSN tokens as rewards—whose price declines might be faster than your principal. Put simply, most people stake not for yield, but for an air drop. Once the air drops are over, what will support the TVL?
And the real scythe comes later. According to the project’s official tokenomics, circulating supply is currently only 26.5%, and another 73.5% of tokens will unlock over the next 34 months. Investors, the team, and advisors together hold 49% of the allocation. Starting May 10th, they will unlock 1/36 each month, continuing until April 2029. A coin with a $78 million market cap is facing sell-pressure expectations more than three times its FDV. Tell me—how does this price go up?
The story around Aave V4 integration is well told. But if lending protocols use your BTC as collateral, what does that have to do with the BABY token? Will protocol fees buy back and burn? Will they distribute profits to stakers? Right now, no one can see that.
This isn’t FUD. It’s reality calculated with a calculator. @BabylonLabs_io only needs to answer one question: once all the airdrop farmers exit, and the unlocked tokens keep spilling out, who will buy the tokens behind that $5 billion TVL?
#baby $BABY $ETH
Following Babylon for more than a year, I have to say a few unkind things today.
Look at the PR draft for @BabylonLabs_io —right away it says “$5 billion+ TVL” and “the leading BTC native staking.” It sounds like the ultimate answer to BTCFi. But open Binance and take a look at baby’s price: from an ATH of $0.166 down to a low of $0.0107—a drop of more than 93%, with market cap now only $78 million. A protocol that locked more than $5 billion worth of Bitcoin has a token market cap of less than 1.5% of its TVL. This isn’t undervaluation; it’s a direct rejection by the market of the value-capture mechanism.
What’s even more ironic is the yield. The official dashboard shows BTC staking APR only 0.04%-0.67%. Early participants who locked for half a year only got an ROI of 0.6%. For this kind of return, you have to take on the slash risk caused by Finality Provider double-signing, accept unlock periods lasting days, and receive BABY and a bunch of unknown BSN tokens as rewards—whose price declines might be faster than your principal. Put simply, most people stake not for yield, but for an air drop. Once the air drops are over, what will support the TVL?
And the real scythe comes later. According to the project’s official tokenomics, circulating supply is currently only 26.5%, and another 73.5% of tokens will unlock over the next 34 months. Investors, the team, and advisors together hold 49% of the allocation. Starting May 10th, they will unlock 1/36 each month, continuing until April 2029. A coin with a $78 million market cap is facing sell-pressure expectations more than three times its FDV. Tell me—how does this price go up?
The story around Aave V4 integration is well told. But if lending protocols use your BTC as collateral, what does that have to do with the BABY token? Will protocol fees buy back and burn? Will they distribute profits to stakers? Right now, no one can see that.
This isn’t FUD. It’s reality calculated with a calculator. @BabylonLabs_io only needs to answer one question: once all the airdrop farmers exit, and the unlocked tokens keep spilling out, who will buy the tokens behind that $5 billion TVL?
#baby $BABY $ETH