Babylon Labs teams up with SatLayer to unlock DeFi for Bitcoin

Babylon Labs has partnered with Castle Island Ventures-backed SatLayer to bring the benefits of Bitcoin staking and redemption to more users.

The move aims to offer Bitcoin (BTC) holders the opportunity to explore the decentralized finance ecosystem around the world’s largest and most popular cryptocurrency.

With over $2 billion in total value locked, Babylon is a leading BTC staking protocol. According to a press release, the platform aims for greater liquidity, mutual security and capital efficiency for BTC holders in this partnership.

SatLayer will enable this functionality by offering re-staking opportunities to Babylon protocol users. The partners plan to leverage smart contracts to allow programmable BTC interruption.

Disruption in proof-of-stake mechanisms allows bad behavior by validators to be punished. Implementation of the mechanism will reveal the utility of Bitcoin in the DeFi ecosystem. Users who stake BTC help secure PoS chains, aggregations, and decentralized applications in the rapidly expanding decentralized finance market.

“Babylon Labs and SatLayer share a vision for the future of Bitcoin as the cornerstone of decentralized ecosystems. Together, we enable applications and infrastructure to benefit from Bitcoin’s unmatched security while expanding its liquidity through programmable repurchase frameworks. “The launch of SatLayer’s devnet ushers in a new era of Bitcoin-powered innovation for builders around the world.”

Luke Xie, co-founder of SatLayer.

The collaboration between Babylon Labs and SaltLayer has significantly improved staking and re-staking in Bitcoin, the platforms said.

Babylon Labs has received backing from major venture capital firms in the industry, including Paradigm, which led a $70 million investment in June. The protocol also attracted investment from Binance’s incubation and venture capital arm in February 2024.

The $2 billion TVL protocol has partnered with ecosystem players such as Solv Protocol, Lombard, and Bedrock to expand the Bitcoin DeFi ecosystem through liquid staking tokens. On November 25, Babylon Labs and Lombard teamed up to bring Bitcoin staking to Sui.

Babylon’s offering allows Bitcoin holders to stake BTC across PoS chains, layer 2 networks, and data availability layers, and users earn staking rewards.