BOB, the “hybrid layer 2” network seeking to make Bitcoin the center of the decentralized finance (DeFi) universe, has taken a step toward that goal by integrating with the BTC Babylon restructuring protocol.
Short for “Build on Bitcoin,” BOB’s goal is to establish Bitcoin as a foundational network for DeFi by creating bridges between itself and other blockchains, using Bitcoin as an anchor chain to finalize transactions.
The integration with Babylon is part of BOB’s roadmap in giving it “Bitcoin finality”, the point at which a transaction is permanent and irreversible on the oldest blockchain. Assets deposited from other chains onto BOB would be confirmed and verified on Bitcoin via the Babylon protocol.
Babylon, which is touted as a way to use BTC to secure other protocols and decentralized applications, is the industry’s leading Bitcoin staking project, with a total value locked (TVL) of approximately $6 billion.
Staking refers to the offering of cryptographic tokens to support the operation of a blockchain network in exchange for rewards, similar to accumulating interest in a bank account.
Such a process is fundamental to networks like Ethereum and Solana which operate on a “proof of stake” mechanism, but is absent from Bitcoin, which uses “proof of work”.
However, given that bitcoin’s total market capitalization is greater than that of all other crypto assets combined, projects like Babylon are exploring ways to leverage BTC’s deep reserves to benefit the industry as a whole.
This week, Babylon completed its third staking cycle in which it brought its total BTC staked to 57,290 ($5.93 billion), placing it in the top 10 protocols on TVL, according to data tracked by DeFiLlama.
BOB’s next step is to launch bridges connecting Bitcoin to other networks, using BitVM, a computing paradigm designed to enable Ethereum-like smart contracts on the world’s original blockchain. BitVM is scheduled for testnet release in Q1 2025.
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