Babylon Labs joins forces with Fiamma to unlock Bitcoin DeFi

Babylon Labs and Fiamma, a Lightspeed Faction-backed platform focused on unlocking real-world assets in Bitcoin, are teaming up to develop a decentralized world with BTC security.

Fiamma has received a strategic investment from Babylon Labs to help bring this vision to market, according to a press release.

As the two platforms work to strengthen the Bitcoin (BTC) secure decentralized finance ecosystem, their main focus will be on bringing trust-minimized Bitcoin bridges to developers and blockchains.

Babylon Labs and Fiamma plan to integrate zero-knowledge technology into Bitcoin through Fiamma’s BitVM2 protocol, unlocking new potential in Bitcoin’s 21 million supply.

The collaboration comes after Fiamma launched the testnet for the Bitcoin bridge in November 2024. The platform also introduced a devnet for the first zero-knowledge verification layer for Bitcoin using BitVM2.

Meanwhile, Babylon Labs has created the largest Bitcoin staking protocol to date, with over 57,000 BTC staked so far. According to DeFiLlama, the Babylon protocol currently has a total locked value of over $6 billion.

Babylon’s non-custodial platform allows users to earn additional rewards from their assets while helping to secure proof-of-stake chains by staking their BTC. Integration with Fiamma’s trust-minimized bridge will further increase the utility of BTC in DeFi.

Fiamma’s expansion, along with the growth of real-world applications on Bitcoin, includes strategic partnerships with Hack VC, Castle Island Ventures-backed repurchase platform Satlayer, and zero-knowledge virtual machine platform RISC Zero.