The distance between the protected value and the value that BABY absorbs
This afternoon I revisited the Babylon data and noticed a gap that made me pause for quite a while.
Hundreds of billions of USD worth in BTC is being directly locked on Bitcoin to support finality for PoS networks. That mechanism has worked in practice—no need to wrap, no bridge, and also no need to turn $BTC th into a representative asset on another chain.
But when looking at BABY, the token’s market capitalization is still much smaller than the amount of Bitcoin behind the system.
This creates a rather strange feeling.
The security layer is already in place. BTC holders can stake, delegate to a Finality Provider, and receive rewards. Meanwhile, $BABY —the asset used for governance, validators, and economic coordination within Babylon—seems to still not fully reflect the scale of capital that the protocol is mobilizing.
In my view, this doesn’t necessarily mean there’s a mispricing. The two layers are doing two different jobs. BTC provides economic weight, while BABY maintains the chain’s internal operations. BABY’s value becomes clearer when more Bitcoin Secured Networks actually use this security, pay fees, and route value back into the token.
If that demand grows, the current gap could narrow—but if BTC is only locked to chase rewards while revenue from the networks using the security remains thin, BABY may continue to be viewed as a supporting layer.
This is the key shared security point that still needs to be proven: whether large-scale security genuinely creates value for the token.
@BabylonLabs_io has proven they can attract Bitcoin.
The harder problem is proving that amount of BTC will create sustainable value for BABY, rather than merely making the TVL number look good.
#baby
$BLESS
This afternoon I revisited the Babylon data and noticed a gap that made me pause for quite a while.
Hundreds of billions of USD worth in BTC is being directly locked on Bitcoin to support finality for PoS networks. That mechanism has worked in practice—no need to wrap, no bridge, and also no need to turn $BTC th into a representative asset on another chain.
But when looking at BABY, the token’s market capitalization is still much smaller than the amount of Bitcoin behind the system.
This creates a rather strange feeling.
The security layer is already in place. BTC holders can stake, delegate to a Finality Provider, and receive rewards. Meanwhile, $BABY —the asset used for governance, validators, and economic coordination within Babylon—seems to still not fully reflect the scale of capital that the protocol is mobilizing.
In my view, this doesn’t necessarily mean there’s a mispricing. The two layers are doing two different jobs. BTC provides economic weight, while BABY maintains the chain’s internal operations. BABY’s value becomes clearer when more Bitcoin Secured Networks actually use this security, pay fees, and route value back into the token.
If that demand grows, the current gap could narrow—but if BTC is only locked to chase rewards while revenue from the networks using the security remains thin, BABY may continue to be viewed as a supporting layer.
This is the key shared security point that still needs to be proven: whether large-scale security genuinely creates value for the token.
@BabylonLabs_io has proven they can attract Bitcoin.
The harder problem is proving that amount of BTC will create sustainable value for BABY, rather than merely making the TVL number look good.
#baby
$BLESS