Babylon has crossed a major milestone, securing over $5 billion in total value locked (TVL) representing approximately 56,853 Bitcoin. The protocol now partners with Aave to transform dormant BTC into productive collateral.
The integration utilizes Trustless Bitcoin Vaults (TBVs), allowing users to stake native BTC on its own network to secure Proof-of-Stake chains. Through this mechanism, holders can borrow stablecoins against their locked Bitcoin without wrapping assets or surrendering custody keys.
This development highlights a stark valuation disparity. Babylon’s BABY token launched in April 2025 with a market capitalization between $52 million and $55 million. This figure stands in sharp contrast to the $5 billion in underlying Bitcoin staked, creating a ratio where the token trades at roughly 1% of the TVL.
Backed by a16z, Babylon offers a custodial-free alternative to wrapped Bitcoin products like cbBTC. While smart contract risks remain inherent to decentralized finance, the model provides dual utility: earning staking yield and accessing liquidity simultaneously, all while keeping Bitcoin on its native chain.