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 is using the BitVM2 computing paradigm, which is designed to enable Ethereum-style smart contracts on Bitcoin, which then paves the way for zero-knowledge technology.
Zero-knowledge calculations allow different parties to verify that information is accurate without revealing to each other what the information is. In this sense, it is essential to join 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 transactions on blockchains that are free from some of Bitcoin’s speed and scale limitations.
This is part of a broader move to extract greater utility from Bitcoin, similar to what is common in networks like Ethereum. Babylon’s Bitcoin staking protocol, which is one of the largest 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 around 5.5 billion of dollars.
The introduction of BitVM2’s predecessor by Robin Linus in October 2023 was hailed as a breakthrough in making Bitcoin more programmable, by enabling a rollup that can handle faster and cheaper transactions without compromising security. This could allow bridges to securely transfer BTC to the rollup and then return the BTC so deposits can be withdrawn.
BitVM inspired a lot of fervor among developers building projects on Bitcoin, including some focused on building bridges to other networks. Zero-knowledge rollup Citrea, which is 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.
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