Bitcoin is Idle. Cryptocurrencies are Isolated. Babylon Fixes Both.
The crypto ecosystem is divided.
On one side: Bitcoin
Bitcoin is the most valuable digital asset in the world, with over $2 trillion in market value. It’s decentralized, secure, and globally recognized. But it doesn’t do much today. Bitcoin was never designed for programmability, which means holders can’t use it in DeFi, stake it, or generate rewards, unless they wrap or bridge it, which would lower security.
As a result, bitcoin remains largely idle.
On the other side: All the other digital assets
The altcoin world is where innovation happens. Proof-of-stake networks, DeFi, restaking, real-world assets, all the experimentation and composability live here. But these ecosystems often lack the capital and reputation needed to scale beyond crypto-native users.
The capital is sitting on the Bitcoin network. The innovation is happening elsewhere.
The problem: There’s no native, scalable multiplex connection between the two.
Until now.
Babylon’s Vision: Make Bitcoin Work for All of Crypto
Babylon Labs is building the infrastructure and products to make Bitcoin useful and composable while remaining safe across the entire crypto economy. Its goal is to be the home to BTCFi, a new financial layer where Bitcoin becomes the foundation for decentralized finance.
BTCFi is short for Bitcoin Decentralized Finance:
An ecosystem where Bitcoin collaborates with other digital assets, altcoins, stablecoins, RWAs to generate value in a secure and trustless way.
For BTCFi to exist, three things must happen:
Bitcoin must be able to generate rewards that scale and multiply as the ecosystem grows.
→ This includes compounding rewards from new BSNs integrating with Babylon and rewards generated from DeFi apps built on Babylon Genesis.
Bitcoin must become liquid and usable across DeFi.
An execution layer must exist where these interactions can be executed efficiently.
Babylon Genesis and the Babylon Bitcoin staking protocol are delivering all three through a modular composition, liquidity, and execution layers.
1. The Staking Layer: Bitcoin as Economic Security
The Babylon Bitcoin staking protocol introduced trustless Bitcoin staking:
A protocol where bitcoin holders can stake their BTC to secure altcoin networks (called Bitcoin Supercharged Networks, or BSNs) and earn rewards, without giving up custody, using bridges, or trusting multisigs.
This is the first time Bitcoin can generate on-chain rewards in a way that aligns with its security ethos.
This is the evolution of Bitcoin staking.
As more BSNs are onboard, BTC stakers gain access to more native token rewards from each chain, creating a scalable, multi-rewards system.
In the near future, the Babylon Bitcoin staking protocol will launch multi-staking, allowing bitcoin stakers to earn rewards from multiple BSNs of their choice while securing them at once. This is done by delegating the same staking power to multiple Finality Providers (FPs), one for each BSN. Stakers earn multiple reward streams, and BSNs gain stronger, shared security from Bitcoin itself.
Better still, existing stakers can upgrade to multi-staking without unbonding or losing rewards. A new transaction simply consumes the previous one, and the multi-stake becomes active within hours.
This completes the staking layer and the foundation of BTCFi. Similar to how staking powers capital efficiency for DeFi on Ethereum, Babylon Bitcoin staking makes Bitcoin programmable as a security primitive, and its earning potential multiplies.
As the number of BSNs grows, the total rewards available to BTC stakers grow proportionally, paving a path toward higher and more diverse rewards opportunities.
2. The Liquidity Layer: Bitcoin as a Composable Asset
To unlock full DeFi utility, bitcoin must be made liquid.
That means a synthetic bitcoin, a 1:1 representation of locked native BTC, must be mintable and redeemable without intermediaries. This synthetic asset needs to be:
Trustless (no third-party custodians),
Interoperable (usable across DeFi),
Fully redeemable (peg-out must be guaranteed).
Babylon Labs is working to make this liquidity layer a reality by turning innovations such as BitVM into concrete BTC liquidity products.
By coupling the liquidity layer and staking layer, Bitcoin will fuel the entire crypto ecosystem. This milestone is expected to go live in 2026.
3. The Execution Layer: Babylon Genesis as the Trade Center
The third piece of the puzzle is the execution layer, where BTCFi actually happens.
This is Babylon Genesis and other BSNs:
A purpose-built blockchain that connects Bitcoin to BSNs and hosts the DeFi apps that use BTC liquidity and staking.
To fulfill this role, Babylon Genesis must support one thing:
A developer-friendly environment that supports existing DeFi protocols and rapid adoption.
That’s why Babylon Genesis will support two VMs:
CosmWasm – Written in Rust, ideal for high-performance and Bitcoin-safe smart contracts.
EVM – The Ethereum Virtual Machine, with a massive developer community and a large library of existing DeFi applications.
These two VMs will share the same token ledger thanks to Cosmos modules like bank and tokenfactory. This means dApps built in CosmWasm and EVM can interoperate seamlessly.
Example:
A trustless BTC LST built in CosmWasm mints a synthetic BTC. That token is then used in a rewards farm or lending market built on EVM, all within the same chain.
DeFi apps on Babylon Genesis will also offer additional rewards for using BTC-based assets, creating new reward sources for BTC stakers beyond BSNs.
EVM support is expected on Babylon Genesis in Q3 2025. Once added, Babylon becomes the trade hub of BTCFi.
The Big Picture
When complete, the Babylon architecture will consist of:
Bitcoin – The idle capital base.
Babylon Genesis Ecosystem – The home to BTCFi.
Babylon Genesis serves as both the foundation for staking and a dynamic liquidity layer. It is a hub of activity akin to a global trade center, driving protocol revenue through BSN rewards, on-chain activities, and liquidity provisioning.
BSNs – The networks that tap into Bitcoin for security and liquidity to provide an avenue for BTCFi.
BTCFi protocols – Built on CosmWasm and EVM, leveraging BTC-based assets and rewards.
This multi-layered design, staking, liquidity, and execution are how Bitcoin transforms from idle capital into the beating heart of a new decentralized financial system.
The more BSNs integrate and the more DeFi apps go live on Babylon Genesis, the more compounding reward streams become available to BTC and BABY stakers.
Conclusion
The next chapter of crypto isn’t about more tokens or faster L2s. It’s about unlocking the potential of the largest, most trusted digital asset: bitcoin.
Babylon Labs is building the infrastructure that makes this possible. A safe, programmable, and deeply integrated BTCFi stack.
The capital is here. The technology is here.
The path to scaled, multi-source BTC rewards is here, too.
And now the solution is being built as well.
Babylon is where Bitcoin finally earns, and earns more.
