When the endless “native self-custody” buzz is sweeping the screens, I’m staring at Babylon’s whitepaper, but what keeps haunting my mind is Covenant Committee’s 6-out-of-9 multisig.
To understand this kind of “twist,” you have to peel back Babylon’s onion. Bitcoin’s Taproot model can safeguard ownership, but when faced with complex slashing and confiscation logic, native Script still falls short. So Babylon introduces the Covenant Committee. This is not an added center of control in any proactive way—it’s simply an engineering compromise under the current limits of scripting. Those nine nodes are more like rule enforcers: through a multisig mechanism, they ensure BTC can only flow along the protocol-approved paths.
This leads to the elegance and brutality of EOTS. The FP dual-signature design, which automatically exposes the private key, is practically art; a malicious dual-signature would directly burn 33.33% of the principal. But real-world elegance often comes with hard physical costs: accidental dual-signatures caused by extreme forks or a node bug can look identical on-chain to malicious dual-signatures. If you run into an FP operational incident, one mistake could wipe out the principal entirely. Under this model, choosing FP over traditional Staking validators is essentially no different—Babylon has just wrapped it in a “self-custody” narrative.
Go deeper, and the TBV mechanism tries to solve the ultimate hard problem: to make BTC collateralized on Ethereum without turning it into wrapped BTC. TBV doesn’t move BTC. The depositor’s BTC remains locked in Bitcoin’s Taproot script, while the Ethereum contract only tracks the vault’s state. This is more like a bank generating an internal account number for a property mortgage—the original “property deed” still lives on the Bitcoin ledger.
However, “Trustless” absolutely does not mean “Riskless.” TBV’s skeleton is BitVM3, and this model has a fatal flaw: someone must be willing to spend Gas during the challenge window to monitor and submit the challenge. In reality, it’s likely that institutions support the game-theoretic equilibrium. What’s more, the challenge period overlaps with the Unbonding Period—so under extreme market conditions, the risk of delayed liquidation is real.
In the end, Babylon makes scripting look fancy, but the more complex it gets, the more edge cases you’ll have. What we should truly care about isn’t how many BTC it can attract, but whether the Covenant Committee can gradually weaken as Bitcoin’s native capabilities improve. If in the future Script can express more logic, today’s committee is only a transition. If it can’t, this will become a structural cost for BTC to carry long-term as it enters the PoS world.
#baby $BABY @BabylonLabs_io
To understand this kind of “twist,” you have to peel back Babylon’s onion. Bitcoin’s Taproot model can safeguard ownership, but when faced with complex slashing and confiscation logic, native Script still falls short. So Babylon introduces the Covenant Committee. This is not an added center of control in any proactive way—it’s simply an engineering compromise under the current limits of scripting. Those nine nodes are more like rule enforcers: through a multisig mechanism, they ensure BTC can only flow along the protocol-approved paths.
This leads to the elegance and brutality of EOTS. The FP dual-signature design, which automatically exposes the private key, is practically art; a malicious dual-signature would directly burn 33.33% of the principal. But real-world elegance often comes with hard physical costs: accidental dual-signatures caused by extreme forks or a node bug can look identical on-chain to malicious dual-signatures. If you run into an FP operational incident, one mistake could wipe out the principal entirely. Under this model, choosing FP over traditional Staking validators is essentially no different—Babylon has just wrapped it in a “self-custody” narrative.
Go deeper, and the TBV mechanism tries to solve the ultimate hard problem: to make BTC collateralized on Ethereum without turning it into wrapped BTC. TBV doesn’t move BTC. The depositor’s BTC remains locked in Bitcoin’s Taproot script, while the Ethereum contract only tracks the vault’s state. This is more like a bank generating an internal account number for a property mortgage—the original “property deed” still lives on the Bitcoin ledger.
However, “Trustless” absolutely does not mean “Riskless.” TBV’s skeleton is BitVM3, and this model has a fatal flaw: someone must be willing to spend Gas during the challenge window to monitor and submit the challenge. In reality, it’s likely that institutions support the game-theoretic equilibrium. What’s more, the challenge period overlaps with the Unbonding Period—so under extreme market conditions, the risk of delayed liquidation is real.
In the end, Babylon makes scripting look fancy, but the more complex it gets, the more edge cases you’ll have. What we should truly care about isn’t how many BTC it can attract, but whether the Covenant Committee can gradually weaken as Bitcoin’s native capabilities improve. If in the future Script can express more logic, today’s committee is only a transition. If it can’t, this will become a structural cost for BTC to carry long-term as it enters the PoS world.
#baby $BABY @BabylonLabs_io