BOB, the “hybrid layer 2” network that seeks to make Bitcoin the center of the decentralized finance (DeFi) universe, has taken a step toward that goal by integrating with BTC recovery protocol Babylon.
The goal of BOB, short for “Build on Bitcoin,” is to establish Bitcoin as the foundational network for DeFi by creating bridges between itself and other blockchains, using Bitcoin as an anchor chain to finalize transactions.
Integrating with Babylon forms part of BOB’s roadmap by giving it “Bitcoin finality,” the point at which a transaction is permanent and irreversible on the older blockchain. Assets deposited from other chains into BOB would be confirmed and verified in Bitcoin through the Babylon protocol.
Babylon, which is billed as a way to use BTC to secure other decentralized protocols and applications, is the largest Bitcoin staking project in the sector, with a total value locked (TVL) of around $6 billion.
Staking refers to offering cryptographic tokens to support the operation of a blockchain network in exchange for rewards, similar to accumulating interest on a bank account.
This process is critical for networks like Ethereum and Solana, which run with a “proof-of-stake” mechanism, but is absent in Bitcoin, which uses “proof-of-work.”
However, since bitcoin’s total market capitalization is larger than that of any other crypto asset combined, projects like Babylon are exploring ways to tap into BTC’s deep reserves to benefit the broader industry.
This week, Babylon completed its third round of staking in which it brought its total BTC staked to 57,290 ($5.93 billion), placing it in the top 10 protocols according to TVL, according to data tracked by DeFiLlama.
BOB’s next step is to launch bridges connecting Bitcoin to other networks, using BitVM, a computing paradigm designed to enable Ethereum-style smart contracts on the world’s original blockchain. BitVM is scheduled for testnet launch in the first quarter of 2025.
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