Buy & Swap Babylon (BABY)

Bitcoin's collateral gap

Babylon opens with a comparison. Around 3% of Bitcoin is used as collateral, on-chain and off-chain combined, its site says. For gold the figure is around 10%, and for ETH around 20%.

The reason, according to Babylon, is that Bitcoin has limited programmability, so using it as collateral has meant taking on counterparty risk — trusting a bridge, a wrapper or an intermediary with your coins.

Babylon's goal is to close that gap by building what it calls infrastructure for a native Bitcoin credit market.^{[1], [2], [3]}

Trustless Bitcoin Vaults

The core product is Trustless Bitcoin Vaults, or TBV. The site says TBV lets native Bitcoin be used as collateral on any chain and in any application, without wrapping, bridging or relying on intermediaries.

The Bitcoin never leaves home. It stays locked on the Bitcoin network in a self-custodial BTCVault that the holder creates and activates. TBV is designed to be chain- and application-agnostic, so the same vault can, in principle, back activity in many places.

Babylon says its infrastructure has activated more than 100,000 native Bitcoin.^{[4], [5], [6]}

Borrowing against Bitcoin without selling it

The first use case is native Bitcoin-backed borrowing, starting with Aave v4 on Ethereum, which Babylon says is live on public testnet. The flow is laid out step by step.

A holder locks native Bitcoin into a self-custodial BTCVault. Aave v4 recognises it as collateral. The holder borrows supported assets such as USDC or USDT, then repays the loan plus interest to withdraw or reduce the position. After a challenge period verifies the withdrawal, the Bitcoin returns to the nominated wallet.

Liquidation happens only if the position falls below the liquidation threshold, and partial liquidation is supported. Babylon also highlights partners, including a planned fixed-rate borrowing product with Aegis.^{[7], [8], [9]}

Securing other chains with Bitcoin

Babylon's second product lets Bitcoin do security work. Holders can lock native Bitcoin to help secure proof-of-stake chains and earn staking rewards while keeping full custody — no wrapping, no bridging, no third-party risk, and all within their own wallet.

This approach flips the usual trade-off. On most chains, earning with Bitcoin has meant first converting it into a wrapped version that depends on a custodian or bridge. Babylon's model keeps the actual coins on the Bitcoin network under the holder's control, while other systems recognise them as locked and committed. The security work gets done without the Bitcoin itself changing hands.

For long-term holders who have never wanted to sell or hand over their coins, that is the appeal in a sentence: Bitcoin that can earn, secure and borrow while staying exactly where it is. Babylon's partner list, including integrations planned with GoMining and Aegis, shows other teams building on the same idea.

Together, the two products share one theme: Bitcoin can be productive without leaving the Bitcoin network. BABY is the token of the ecosystem built around that idea.^[10]

What the BABY token does

The homepage focuses on Bitcoin vaults and staking and does not describe BABY's supply, governance role or reward mechanics. Those details are UNKNOWN from the source used here.^[10]