{"id":65890,"date":"2026-01-08T08:30:42","date_gmt":"2026-01-08T08:30:42","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/babylon-pushes-bitcoin-into-on-chain-finance-as-a16z-crypto-backs-expansion\/"},"modified":"2026-01-08T08:30:42","modified_gmt":"2026-01-08T08:30:42","slug":"babylon-pushes-bitcoin-into-on-chain-finance-as-a16z-crypto-backs-expansion","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/babylon-pushes-bitcoin-into-on-chain-finance-as-a16z-crypto-backs-expansion\/","title":{"rendered":"Babylon pushes Bitcoin into on-chain finance as a16z crypto backs expansion"},"content":{"rendered":"<p><b>(Originally posted on : CoinJournal: Latest Crypto News, Altcoin News and Cryptocurrency Comparison )<\/b><br \/>\n<\/p>\n<div data-site=\"CoinJournal\">\n<div class=\"-mt-16  mb-8  lg:-mt-20  rounded-md  shadow-md\">\n<div class=\"relative  z-10  post-article-image  rounded  overflow-hidden\" data-site=\"CoinJournal\">\n<picture><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/2026\/01\/20260108_1237_Image-Generation_simple_compose_01kee6wtx2f2zvs5vr0v49pnf1-smartcrop-750x375.webp\" type=\"image\/webp\" media=\"(min-width: 750px)\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/2026\/01\/20260108_1237_Image-Generation_simple_compose_01kee6wtx2f2zvs5vr0v49pnf1-smartcrop-363x181.webp\" type=\"image\/webp\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/2026\/01\/20260108_1237_Image-Generation_simple_compose_01kee6wtx2f2zvs5vr0v49pnf1-smartcrop-750x375.png\" type=\"image\/jpeg\" media=\"(min-width: 750px)\"\/><source srcset=\"https:\/\/coinjournal.net\/wp-content\/uploads\/imagecache\/2026\/01\/20260108_1237_Image-Generation_simple_compose_01kee6wtx2f2zvs5vr0v49pnf1-smartcrop-363x181.png\" type=\"image\/jpeg\"\/>\n<\/picture>                            <\/div>\n<\/p><\/div>\n<ul>\n<li>Trustless BTCVaults aim to use Bitcoin as on-chain collateral without wrappers or custodians.<\/li>\n<li>Babylon\u2019s staking previously reached over $2 billion in total value locked.<\/li>\n<li>An integration with Aave V4 is expected to bring native Bitcoin collateral to DeFi by April 2026.<\/li>\n<\/ul>\n<p>Babylon is moving to widen Bitcoin\u2019s role in on-chain finance, following fresh backing from venture capital firm a16z Crypto.<\/p>\n<p>The investment supports Babylon\u2019s transition from a single-purpose staking platform toward a broader financial infrastructure built directly on Bitcoin.<\/p>\n<p>Rather than focusing only on yield, the project is positioning BTC as usable collateral across lending and other decentralised applications, without relying on wrapped tokens or custodial bridges.<\/p>\n<p>The shift reflects a growing push across crypto markets to unlock capital efficiency from Bitcoin\u2019s large but largely inactive supply, while keeping security anchored to the Bitcoin network itself.<\/p>\n<h2>a16z crypto investment<\/h2>\n<p>On Dec. 7, <a href=\"https:\/\/a16zcrypto.com\/posts\/article\/investing-in-babylon\/\">a16z Crypto disclosed<\/a> a $15 million investment in Babylon, made through the purchase of Babylon\u2019s native BABY tokens.<\/p>\n<p>Babylon was originally developed as a Bitcoin staking protocol that allows BTC holders to earn yield without transferring assets off the Bitcoin network.<\/p>\n<p>The firm said the investment reflects confidence in Babylon\u2019s approach to extending Bitcoin\u2019s functionality beyond staking, while preserving Bitcoin\u2019s core security assumptions.<\/p>\n<p>a16z positioned the project as a potential neutral alternative to wrapped BTC models, which currently dominate decentralised finance but introduce reliance on issuers, custodians, or multi-signature structures.<\/p>\n<h2>Trustless BTCVaults explained<\/h2>\n<p>Babylon is now expanding into lending infrastructure through what it calls Trustless BTCVaults.<\/p>\n<p>These vaults are designed to allow Bitcoin to act as verifiable on-chain collateral without bridges, wrappers, or custodians.<\/p>\n<p>The architecture relies on cryptographic tools such as witness encryption and garbled circuits to enable conditional execution tied directly to Bitcoin transactions.<\/p>\n<p>The aim is to let Bitcoin interact with decentralised applications while remaining native to its own network.<\/p>\n<p>According to a16z, this design could reduce counterparty and settlement risks that arise when BTC is represented on other blockchains via synthetic tokens.<\/p>\n<p>Babylon\u2019s approach targets the large pool of Bitcoin capital that currently sits idle, estimated at more than $1.4 trillion, by making it usable in lending, credit, and other capital-efficient use cases.<\/p>\n<h2>Founders and technical roots<\/h2>\n<p>Babylon was founded by David Tse and Fisher Yu.<\/p>\n<p>Tse is a professor at Stanford University and is known for his academic work in information theory and blockchain research.<\/p>\n<p>a16z highlighted Tse\u2019s long-standing role in mentoring crypto founders and researchers as part of its rationale for backing the project.<\/p>\n<p>The firm framed the investment as support for technically driven infrastructure that could reshape how Bitcoin integrates with decentralised finance, rather than incremental improvements to existing staking models.<\/p>\n<h2>From staking to DeFi integration<\/h2>\n<p>Babylon\u2019s staking protocol has previously drawn significant demand.<\/p>\n<p>Earlier staking caps recorded more than $2 billion in total value locked, with participation from institutional custodians such as BitGo and exchange partners including Kraken.<\/p>\n<p>More recently, development has shifted toward BTCVaults and native Bitcoin lending.<\/p>\n<p>In early December 2025, Babylon and Aave announced that native Bitcoin would be used as collateral on Aave V4.<\/p>\n<p>The proposed integration includes Aave\u2019s first Bitcoin-backed \u201cSpoke\u201d, enabling borrowing and lending against BTC without converting it into ERC-20 tokens.<\/p>\n<p>The launch is expected around April 2026.<\/p>\n<p>If successful, it could open new decentralised finance markets built directly on Bitcoin\u2019s base layer, with potential extensions into perpetual futures, stablecoins, and other financial primitives.<\/p>\n<div class=\"post-meta\">\n<hr class=\"mb-6\"\/>\n<h6 class=\"text-3xl  mb-4  text-green-300\">Share this article<\/h6>\n<hr class=\"mb-6\"\/>\n<h6 class=\"text-3xl  mb-4  text-green-300\">Categories<\/h6>\n<hr class=\"mb-6\"\/>\n<h6 class=\"text-3xl  mb-4  text-green-300\">Tags<\/h6>\n<\/p><\/div>\n<\/p><\/div>\n<p><a href=\"https:\/\/coinjournal.net\/news\/babylon-pushes-bitcoin-into-on-chain-finance-as-a16z-crypto-backs-expansion\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : CoinJournal: Latest Crypto News, Altcoin News and Cryptocurrency Comparison ) Trustless BTCVaults aim to use Bitcoin as on-chain collateral without wrappers or custodians. Babylon\u2019s staking previously reached over $2 billion in total value locked. An integration with Aave V4 is expected to bring native Bitcoin collateral to DeFi by April 2026. [&hellip;]<\/p>\n","protected":false},"author":3947362361,"featured_media":65891,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[35],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/65890"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/3947362361"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=65890"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/65890\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/65891"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=65890"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=65890"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=65890"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}