Babylon Labs, a blockchain infrastructure company founded by Stanford researchers, has announced new trustless Bitcoin vaults, marking a significant step toward integrating Bitcoin into decentralized finance (DeFi).
Innovations from Babylon Labs
On August 6, 2025, Babylon Labs announced the introduction of trustless Bitcoin vaults that will allow Bitcoin (BTC) to be used in DeFi lending, stablecoins, perpetual futures, and liquid staking without intermediaries, bridges, or wrapped tokens.
Operating Without Intermediaries and Ensuring Security
The vaults operate by encrypting unspent transaction outputs (UTXOs) of Bitcoin using cryptographic regulations. Users must provide zero-knowledge proofs (ZKPs) to access funds, which allows conditions in smart contracts to be proven without revealing confidential information.
The Future of Bitcoin in DeFi and Company Plans
The company's roadmap includes EVM integration, multi-staking, and cross-chain Bitcoin liquidity layer by early 2026. Babylon aims to turn Bitcoin into a productive asset without compromising its principles of decentralization and self-custody.
The introduction of trustless Bitcoin vaults by Babylon Labs opens up new opportunities for using Bitcoin in decentralized finance and could significantly increase Bitcoin's capitalization in this sector.
