On August 6, 2025, Babylon Labs announced the launch of trustless Bitcoin vaults that allow the use of native BTC in decentralized finance (DeFi) applications. These vaults aim to enhance Bitcoin's functionality in DeFi.
Bitcoin in DeFi Made Simpler
The trustless Bitcoin vaults enable the use of native Bitcoin in DeFi applications, such as lending, stablecoin issuance, and perpetual futures, without the need for wrapping or relying on custodians. The vaults lock Bitcoin UTXOs under preset cryptographic rules and require users to submit zero-knowledge proofs for unlocking their BTC.
Potential and Use Cases of Trustless Vaults
These vaults can serve as collateral for transactions on networks such as Ethereum and Cosmos, allowing users to, for instance, receive stablecoins while locking Bitcoin in the vault. The design enforces DeFi logic including liquidations without the need for intermediaries.
Future Plans of Babylon Labs
The vaults are part of Babylon's broader strategy to integrate Bitcoin into decentralized economies. A roadmap for 2026 includes multi-staking support and a cross-chain liquidity layer, aiming to solidify Bitcoin as a core asset for securing proof-of-stake networks.
The launch of trustless Bitcoin vaults by Babylon Labs marks a significant advancement in integrating Bitcoin into decentralized finance tools, unlocking new opportunities for utilizing BTC in modern financial ecosystems.
