Bitcoin is the largest asset in the crypto market, but so far less than 1% of BTC has been used in DeFi. Behind this figure lies a long-standing, seemingly unsolvable dilemma: to have BTC participate in on-chain finance, it must be bridged across chains, wrapped, or entrusted to custodians. Because Bitcoin’s scripting language lacks a covenant mechanism, the industry has long believed that a “minimally trustless Bitcoin bridge” is cryptographically impossible.

The white paper “A Bitcoin-Charged Crypto Economy with Trustless Vaults,” released by Babylon in August 2025, offers a different path—not building a bridge, but changing the approach: BTC doesn’t leave the Bitcoin mainnet; instead, cryptography is used to drive on-chain behavior.

Specifically, each vault is a Taproot UTXO. All valid spending paths are pre-signed when the vault is created by the depositor and the protocol participants. During redemption, a zero-knowledge proof is verified within Bitcoin script of the corresponding event on Ethereum. Cross-chain state changes are validated through the BABE cryptographic mechanism, without trusting any intermediaries.

The real breakthrough isn’t a single technical innovation—it’s the first time Bitcoin holders can “prove they have assets” without having to “hand the assets over.” Trust shifts from “people” to “cryptographic proofs.” Depositors can run their own Vault Provider nodes and bypass all third parties to complete redemption independently. This is what “decentralization” truly means—not that trust is unnecessary, but that trust is optional and removable.

I believe TBV’s greatest value isn’t what it can do today, but that it establishes a paradigm of “native BTC collateral.” In the past, BTC entering DeFi relied on “technical repurposing”—wrapping BTC into another asset and then using it. TBV relies on “asset proof”—BTC stays put, while the proof moves. In May 2026, @BabylonLabs_io published the SCRIPT framework, decomposing native BTC collateral into six categories of risks: sovereignty, clear rules, prohibition of re-use, asset isolation, permissionlessness, and transparency. These six risk categories, in essence, are establishing a credit assessment system for native BTC collateral.

#baby $BABY
Regarding the following statements about Babylon Trustless Bitcoin Vaults, which one is correct?