My fear about getting BTC into DeFi wasn’t some abstract worry. I actually lived it. During that bridge attack my position got stuck inside, and the redemption felt like it might never come.
So this time, when I looked at TBV from @BabylonLabs_io, I didn’t start with how clean the story sounded. I went straight to the redemption step and how it deals with the funding gap.
Turns out they don’t try to hide it. The native BTC still goes through that slow on-chain proof process. But when something needs to move fast—like a liquidation—external capital steps in first. Think Aave liquidity fronting WBTC. Then the arbitrageurs take over and just wait for the real BTC to show up later.
What I like about this is that it doesn’t pretend the time gap doesn’t exist. It admits the gap is there, then finds a way for professional money to fill it. The flip side is that how well TBV holds up in a real crisis depends a lot on how big and willing that prefunding pool is—not only on how tight the code is.
Whenever I look at something like this now, the first question I ask is simple: when things go wrong, where does the money actually come from to front the funds?
#baby $BABY @BabylonLabs_io
So this time, when I looked at TBV from @BabylonLabs_io, I didn’t start with how clean the story sounded. I went straight to the redemption step and how it deals with the funding gap.
Turns out they don’t try to hide it. The native BTC still goes through that slow on-chain proof process. But when something needs to move fast—like a liquidation—external capital steps in first. Think Aave liquidity fronting WBTC. Then the arbitrageurs take over and just wait for the real BTC to show up later.
What I like about this is that it doesn’t pretend the time gap doesn’t exist. It admits the gap is there, then finds a way for professional money to fill it. The flip side is that how well TBV holds up in a real crisis depends a lot on how big and willing that prefunding pool is—not only on how tight the code is.
Whenever I look at something like this now, the first question I ask is simple: when things go wrong, where does the money actually come from to front the funds?
#baby $BABY @BabylonLabs_io