Author: Climber, Golden Finance
When the crypto market is caught in a general decline of copycats and Meme coins vs. VC coins, there are still a number of projects that are working hard and waiting for the bull market to come. Babylon is a typical representative, intending to lead a new cycle of Bitcoin ecological narrative.
Bitcoin fundamentalists believe that Bitcoin is gold and you should hold it. In the world of PoS (Proof of Stake), holding coins means making money. The general principle is that stakers lock up their personal tokens and become validators of the PoS system. The protocol maintains the integrity of the staking process through a reward and penalty mechanism.
The Bitcoin staking protocol launched by Babylon can transform native Bitcoin into a staking asset for any PoS system, releasing the $1.5 trillion value of 21 million BTC. This vision has also enabled Babylon to obtain $96 million in financing for three consecutive years. The former founder of Polygon even said that Babylon is seriously underestimated compared with projects like Eigenlayer.
In view of this, Golden Finance made a special trip to interview Trudy Liuu, the partnership lead of Babylon. Through the form of Q&A, we learned about the value of Babylon built by the project’s internal personnel and their technical principles that enable them to balance the stability and security of Bitcoin asset pledge.
1. Golden Finance: First of all, congratulations to Babylon for its recent large financing of US$70 million. Please briefly introduce Babylon and the team composition of the project.
Trudy: Babylon is a set of security sharing protocols that brings the unparalleled security of Bitcoin to the decentralized world. The latest protocol, Bitcoin Staking, allows Bitcoin holders to stake their Bitcoins, providing cryptoeconomic security for PoS (Proof of Stake) systems in a trustless and self-custodial manner.
Babylon was founded by David Tse, a member of the National Academy of Engineering and a professor at Stanford University, who is a pioneering electrical engineering expert and a renowned Stanford University professor, as well as a member of the National Academy of Engineering and a renowned blockchain security expert. He is the recipient of many prestigious honors, including the IEEE Claude E. Shannon Award and the IEEE Richard W. Hamming Medal.
Dr. Fisher Yu is the co-founder: an expert in blockchain security and cryptography. He participated in the founding of a startup company, led the R&D and products of Dolby Laboratories, and is a postdoctoral fellow in blockchain security at the University of Southern California. He has more than 15 co-authored patents. and advisor to more than 20 high-impact academic papers and top blockchain projects, including Cardano.
In addition, we have a team of dozens of developers, researchers and industry experts from different countries.
2. Golden Finance: What factors prompted your team to decide to create and develop this project? What challenges did the project face?
Trudy: Babylon is bringing the security and decentralization properties of Bitcoin to Proof-of-Stake (PoS) blockchains and Rollups by creating the first native Bitcoin staking protocol. This solves two huge challenges - it allows Bitcoin holders to earn yield trustlessly for the first time, and it enables PoS networks to bootstrap and diversify chain security in an affordable way.
3. Golden Finance: Babylon is positioned as a Bitcoin equity pledge agreement, so how does the project work specifically? What are its operating mechanisms and principles?
Trudy: We have successfully used existing Bitcoin scripts and high-level cryptographic primitives to simulate Bitcoin staking and forfeiture. In other words, we have managed to build a minimalist Bitcoin staking contract that resides on the Bitcoin chain, similar to how smart contracts reside on other blockchains.
You only need to lock your Bitcoin in a self-custodial manner according to our protocol. The locked Bitcoin becomes available for staking and slashing, while also enjoying all the popular staking benefits in the PoS world.
4. Golden Finance: For BTC pledgers, the most important thing is the security of the pledged assets. How do you ensure the security of user assets? And how do you design the pledge yield?
Trudy: The Babylon Bitcoin staking protocol allows Bitcoin holders to lock up Bitcoin in self-custody, without a third-party bridge and without permission.
In addition, we have:
1. Coinspect team. They are the top security company in the field of Bitcoin-related security, especially Bitcoin script, which is also the core key technology to protect Babylon Bitcoin staking. Their clients include ZCash, Ledger, RSK, etc.
2. The Zellic team. They are also involved in building the next version of the Babylon code. The Zellic team has a unique white hat hacker background and is a security expert for top infrastructure projects such as Aptos, LayerZero, MystenLabs, and Osmosis.
5. Golden Finance: The project white paper mentioned that Babylon follows the remote equity pledge method, and you overcome the problem of the lack of smart contracts in the Bitcoin chain by combining encryption technology, consensus protocol and Bitcoin scripting language. So how do you achieve this process?
Trudy: Unlike most other blockchains, the Bitcoin chain gives up programmability in exchange for stability. You can't simply write code (such as smart contracts) to instruct the Bitcoin chain how to verify evidence of malicious behavior and confiscate the relevant Bitcoin stakeholders. In layman's terms, the Bitcoin chain doesn't know how to be an enforcer of foreign affairs.
Babylon wants to build a trustless and non-custodial Bitcoin staking protocol. To do this, people must find a way to teach the Bitcoin chain (through code) how to properly handle staking and forfeiture (i.e., using the Bitcoin scripting language).
6. Golden Finance: Please introduce the current progress of the project. What are the outstanding data performances so far? For example, TVL, ecological projects, interaction data, etc.
Trudy: Currently, the Babylon ecosystem involves multiple track projects including BTC L2s, DeFi, Liquid (Re)staking, Wallet & Custodians, Cosmos Ecosystem, Finality Provider, Rollup Infrastructure, etc., with a total of 87 partners.
7. Golden Finance: In the current Bitcoin ecosystem, there are many projects in various sectors, especially in the Bitcoin L2 sector. What do you think are the advantages of Babylon? What is the connection between Babylon and Bitcoin L2?
Trudy: Babylon is a set of security sharing protocols that brings Bitcoin's unparalleled security to the decentralized world. The latest protocol, Bitcoin staking, enables Bitcoin holders to stake their Bitcoin in a trustless and self-custodial way, providing cryptoeconomic security for PoS (Proof of Stake) systems. Babylon can provide Bitcoin security for Bitcoin L2.
