Babylon unveils trustless BTC DeFi vault, testnet set for May

New era for secure, bridge-free DeFi

The Babylon team emphasized that their TBV protocol enables Bitcoin holders to securely lock up assets directly under their control and leverage them on DeFi platforms such as Ethereum without transferring ownership. TBV is designed to eliminate the vulnerabilities associated with current models relying on “bridges” and “wrapped Bitcoin,” which often create single points of failure. The company’s founders stressed that common bridge issues and distrust of centralized custodians have prevented Bitcoin from reaching its full potential in DeFi.

The TBV protocol operates fully on-chain, with cryptographic auditability and transparency. Users maintain direct control of their Bitcoin while participating in borrowing and lending functions. Notably, the protocol now allows “peg-in” deposit times to be reduced to around three hours, while on-chain transaction fees have been cut by more than threefold—a major step toward mainstream usability.

Mini glossary: The “Trustless Bitcoin Vault” protocol enables holders to directly lock BTC on the blockchain and use their assets as DeFi collateral without relying on third parties or cross-chain bridges.

The updated protocol also lets users delegate borrowing rights to yield providers without ever transferring asset custody. By increasing security and simplifying access, Babylon hopes to make decentralized finance products more attainable for Bitcoin holders—a critical step, according to the company, toward expanding Bitcoin’s utility in DeFi.

The Babylon team stated, “With our DeFi innovations, users retain full control over their BTC while gaining opportunities on other chains without bridge-related risks.”

Protocol security, testnet roadmap, and BABY token updates

Babylon announced that the public testnet for the Trustless Bitcoin Vault will launch at the end of May, with the protocol undergoing multiple audits by independent cybersecurity firms ahead of rollout. The initial phase will focus on enabling users to deposit BTC into the protocol and utilize it as collateral in DeFi. The team also outlined plans to introduce fixed-rate loans, insurance products, and options services in future development stages.

Founders addressed revisions to the BABY token’s utility and distribution plan. In light of prevailing bridge security concerns, the company decided to temporarily suspend plans for transferring BABY tokens to Ethereum. Further, the token release schedule is being restructured to prevent large bulk unlocks, supporting a more gradual and stable tokenomics model.

Mini glossary: The “BABY token” is Babylon’s governance cryptocurrency, designed for use in voting, staking, and protocol fee auctions within the ecosystem.

With backing from Andreessen Horowitz’s technical team, the BABY token will acquire expanded governance, staking, and protocol fee functionalities in the upcoming revisions. Babylon’s long-term strategy aims to attract institutional finance players from traditional sectors, an ambition underscored by the founders’ remarks at the Consensus 2026 conference in Miami, where large investors were said to be prioritizing collateral integrity and capital efficiency in their decisions.

By building a robust infrastructure for Bitcoin-backed loans and stablecoins, Babylon is positioning itself as a driver of on-chain finance adoption across the blockchain and crypto industry.