Spent time today on a detail in the Trustless Bitcoin Vaults (TBV) architecture that the marketing materials gloss over but the whitepaper addresses directly
@BabylonLabs_io and it's worth being honest about.
The core vault design is genuinely trustless. Your Bitcoin locks into a script you create.... Claim destinations and conditions are set at vault creation. No single operator can override them. Even the entities running the infrastructure vault $BLESS
keepers, liquidators cannot redirect your Bitcoin to themselves. The cryptographic design physically prevents it. That part holds up under scrutiny.
But the liquidation system introduces something the whitepaper explicitly calls a trust assumption. Liquidations in TBV use whitelisted liquidators entities that moniitor vault health and price state,
$NB
and trigger liquidation when collateral ratios breach thresholds. These liquidators are permissioned. They cant steal your Bitcoin, but the system does assume enough of them behave correctly and dont collude to censor legitimate liquidations.
The whitepaper frames this honestly: "Even if they cannot steal Bitcoin thanks to the systems design, this introduces a trust assumption into the system." Co-signing mechanisms exiist to curb censorship but they dont eliminate
the assumption entirely.
This is the gap between "trustless vaults" as A headline and "trustless vaults" as a complete system. The vault itself is trustless. The liquidation layer around it is trust-minimized but not trust-free.....
Whether that distinction matters inpractice depends on how the whitelisted liquidator st gets governed and how decentralized it becomes over time. That's the part I'm still watching.
#baby @BabylonLabs_io $BABY
@BabylonLabs_io and it's worth being honest about.
The core vault design is genuinely trustless. Your Bitcoin locks into a script you create.... Claim destinations and conditions are set at vault creation. No single operator can override them. Even the entities running the infrastructure vault $BLESS
keepers, liquidators cannot redirect your Bitcoin to themselves. The cryptographic design physically prevents it. That part holds up under scrutiny.
But the liquidation system introduces something the whitepaper explicitly calls a trust assumption. Liquidations in TBV use whitelisted liquidators entities that moniitor vault health and price state,
$NB
and trigger liquidation when collateral ratios breach thresholds. These liquidators are permissioned. They cant steal your Bitcoin, but the system does assume enough of them behave correctly and dont collude to censor legitimate liquidations.
The whitepaper frames this honestly: "Even if they cannot steal Bitcoin thanks to the systems design, this introduces a trust assumption into the system." Co-signing mechanisms exiist to curb censorship but they dont eliminate
the assumption entirely.
This is the gap between "trustless vaults" as A headline and "trustless vaults" as a complete system. The vault itself is trustless. The liquidation layer around it is trust-minimized but not trust-free.....
Whether that distinction matters inpractice depends on how the whitelisted liquidator st gets governed and how decentralized it becomes over time. That's the part I'm still watching.
#baby @BabylonLabs_io $BABY