Babylon Labs, the developer behind the largest BTC staking protocol, is developing a trust-minimized bridge between Bitcoin and the Cosmos network, aimed at boosting the world's oldest blockchain's ability to interact with other chains. In collaboration with Bitcoin developers Fiamma, Babylon is leveraging the BitVM2 computing paradigm, which enables Ethereum-style smart contracts on Bitcoin, paving the way for zero-knowledge technology. Zero-knowledge computations facilitate the verification of information accuracy between parties without revealing the actual information, laying the groundwork for bridging digital assets across different blockchains. Developers like Babylon Labs and Fiamma are working to unlock the vast value stored in BTC, enabling it to finance other ecosystems and be transacted on blockchains that are not limited by Bitcoin's speed and scalability constraints.
This movement seeks to extract greater utility from Bitcoin, similar to what is commonly seen on networks like Ethereum. Babylon's Bitcoin staking protocol, a prominent project in this sector, allows BTC to secure other protocols and decentralized applications, with a total value locked (TVL) of approximately $5.5 billion.
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 later return the BTC, enabling deposit withdrawals. BitVM has inspired significant interest among developers building projects on Bitcoin, including those focused on bridging to other networks. Zero-knowledge rollup Citrea, backed by Galaxy Digital, deployed a BitVM-based bridge to the Bitcoin testnet last September, designed to be compatible with the Ethereum Virtual Machine (EVM), the smart-contracts-executing software powering the Ethereum protocol.