Babylon Labs has introduced a breakthrough in decentralized financing with the launch of trustless Bitcoin -Kluizen.
Summary
- Babylon launched faithless Bitcoin -Kluizen on 6 August, allowing indigenous BTC to communicate with Defi without bridges or preservators.
- Vaults use BITVM3 and zero-knowledge certificates to enforce smart contract logic, while BTC remains on-chain.
- The function extends the role of BTC in Defi and supplements the Bitcoin -inserting ecosystem of Babylon.
Announced via a August 6 after On X in these vaults Native Bitcoin (BTC) can be used in decentralized financial applications, such as loans, stablecoin mining and perpetual futures, without packing, bridging or trusting preservators.
Bitcoin in Defi without leaving Bitcoin
Locking the vault function by locking Bitcoin Utxos under pre -set cryptographic rules. To unlock BTC, users must submit zero knowledge destinations that validate smart contract logic without exposing private data. Babylon uses BITVM3, a Bitcoin-Native Proof Verification Framework using ZKPs and bleeding circuits, to ensure that BTC never leaves the Bitcoin blockchain.
This design maintains Defi -logic, including liquidations and repayments, without the need for intermediaries, so that indigenous Bitcoin can function as collateral on Ethereum (ETH), Cosmos (Atom) and other chains.
For example, a borrower can receive $ 50,000 from Ethereum Stablecoins and lock Bitcoin in a safe. A liquidator can claim the collateral by submitting a legitimate ZKP in the event that the value of Bitcoin drops.
Use scenarios for the safes include loans, stabilecoin issue, perpetual decentralized exchange colateral and liquid, while BTC remains self-reduced.
Feeding BTCFI and expand Babylon’s vision
The confidential safes are part of Babylon’s wider push to integrate Bitcoin into decentralized economies. Defi uses less than 1% of approximately $ 1.8 trillion market capitalization of Bitcoin from August 2025. The Babylon solution, which supports the indigenous yield generation and fits in with Bitcoin’s philosophy, can unlock this capital.
Moreover, the vaults are connected to Babylon’s $ 5 billion Bitcoin-STARTOCTOCOCOC, which went live on Mainstet in August 2024.
Future developments in Babylon’s route map include multi-insign support, EVM integration and a cross-chain Bitcoin-Liquidity layer that is expected in Q1 2026.
