Babylon Labs, developer of the largest BTC staking protocol, is building a trust-minimized Bitcoin bridge with the Cosmos network to improve interoperability of the world’s oldest blockchain.
In partnership with Bitcoin developers Fiamma, Babylon uses the BitVM2 computing paradigm, designed to enable Ethereum-like smart contracts on Bitcoin, paving the way for zero-knowledge technology.
Zero-knowledge calculations allow different parties to verify that information is accurate without actually revealing to each other what that information is. In this sense, it is fundamental to connect digital assets between different blockchains.
Developers like Babylon Labs and Fiamma aim to unlock the deep wells of value stored in BTC to fund other ecosystems and enable their transactions on blockchains free of some of the speed and scale limitations of Bitcoin.
This is part of a broader movement to extract greater utility from Bitcoin, similar to that which is common on networks like Ethereum. Babylon’s Bitcoin staking protocol, which is one of the most important projects in this sector, is presented as a way to use BTC to secure other protocols and decentralized applications and has a total value locked (TVL) of ‘approximately 5.5 billion dollars.
The introduction of BitVM2’s predecessor by Robin Linus in October 2023 was hailed as a breakthrough in making Bitcoin more programmable, enabling rollup capable of handling faster and cheaper transactions without compromising security. This could then allow bridges to securely transfer BTC to the rollup and then bring the BTC back so that deposits can be withdrawn.
BitVM has inspired a lot of fervor among developers building projects on Bitcoin, including some focused on linking with other networks. Zero-knowledge rollup Citrea, backed by Galaxy Digital, deployed a BitVM-based bridge to the Bitcoin testnet last September. It is designed to be compatible with the Ethereum Virtual Machine (EVM), the smart contract execution software that powers the Ethereum protocol.
Read more: Could Bitcoin become DeFi’s collateral of choice? Lombard Finance says it
