Bitcoin
The latest development is the introduction of trustless safes, designed to enable BTC holders to deposit their tokens without trusting a centralized entity, as set out in a new white paper that is shared with Coindesk on Wednesday.
In defi -ecosystems, trustless safes are a form of digital assets storage or management that removes the need for users to trust a central authority or intermediary. Instead, the systems use smart contracts to guarantee security and force the rules of the safe.
Babylon says that his safes make it possible to use Bitcoin as collateral in Defi applications such as loans and Stablecoin issue, as well as the release that the protocol offers. Users can also earn yields on their BTC companies by using it to support the operation of proof-of-stake networks. They then receive rewards in the baby, the native token of Babylon.
The development is part of the wider movement to use the enormous value in Bitcoin to provide Defi activity over other block chains.
Bitcoin accounts for more than 60% of the total cryptocurrency market capitalization and is comfortable more than any other digital assets combined and could be a much more powerful source of blockchain-based fuel than any other crypto that exists.
Existing bridges with which Bitcoin can be used on external block chains on centralized third parties. Moreover, Bitcoin’s scripting language does not allow covenants – mechanisms that make specific conditions possible about how the funds can be spent in the future – although not because of a lack of trying of developers. The absence makes it more difficult to build confidential bridges.
Babylon proposes to solve this by offering safes on the chains, with the stored BTC bound to a specific smart contract protocol on an external chain.
This makes BITVM3 in Harnzet, the latest evolution of BITVM, a framework for engaging smart contracts on Bitcoin. BITVM3 is designed to improve the efficiency of its predecessor by moving most of the computational work of the chain with the help of “underbearing circuits”, to make fraud more compact on the chain.
The confidential Bitcoin safes are “programmable and recordings are only permitted when a zero knowledge certificate from a specific smart contract status is verified by the Bitcoin chain,” Babylon said in the summary of the article.
“Together with a suitable Bitcoin script design of the safe, this eliminates the need for mutual trust between parties.”
Read more: Crypto Exchange Kraken adds Bitcoin deployment via Babylon while BTC Driven Defi picks up
