The Bitcoin project (BTC) Babylon has taken another step towards the offer of a decentralized financing experience (DEFI) on its implementation protocol of $ 5 billion similar to that seen elsewhere in the world of cryptography.
The latest development is the introduction of without confidence vaults, designed to allow BTC holders to deposit their tokens without counting on a centralized entity, as indicated in a new white paper shared with Coindesk on Wednesday.
In DEFI ecosystems, vaults without confidence are a form of storage or management of digital assets which remove the need for users to trust a central authority or an intermediary. Instead, systems use smart contracts to ensure safety and apply the rules of the safe.
Babylon claims that its trunk boxes will make it possible to use Bitcoin as guaranteed in DEFI applications such as loans and the emission of Stablecoin, as well as the clears provided by its protocol. Users can also earn a return on their BTC holdings by punctuating it to support the operation of proof networks. They then receive paid awards in Baby, the native token of Babylon.
Development is part of the wider movement to use the enormous value maintained in Bitcoin to supply the DEFI activity through other blockchains.
With more than 60% of the total market capitalization of cryptocurrency, Bitcoin is comfortably more than all other combined digital assets and could prove to be a much more powerful source of blockchain fuel than any other existing crypto.
The existing bridges that allow Bitcoin to be deployed on external blockchains are based on centralized third parties. In addition, the Bitcoin script language does not allow alliances – mechanisms that allow specific conditions on how funds can be spent in the future – but not for the lack of development of developers. The absence makes it more difficult to build bridges without confidence.
Babylon proposes to solve this problem by providing chain chests, the stored BTC linked to a specific intelligent contract protocol on an external chain.
This exploits Bitvm3, the latest evolution of BITVM, a framework to allow intelligent contracts on Bitcoin. BITVM3 is designed to improve the efficiency of its predecessor by moving most of the calculation work outside the chain using “burnt circuits”, to make the fraud tests more compact on the chain.
Bitcoin without trust are “programmable, and withdrawals are only authorized when proof of zero knowledge of a specific intelligent contract is verified on the Bitcoin chain,” said Babylon in the document’s summary.
“With a design of appropriate bitcoin scripts of the safe, this eliminates the need for mutual trust among the parties.”
Read more: Crypto Exchange Kraken adds the markup of Bitcoin via Babylon while the BTC conducts Defi resumes
