Babylon Trustless Bitcoin Vaults by Babylon Labs: status and timeline

Milestones

Next · Aave v4 integration

Testnet launchQ1 2026Complete.
Aave v4 integrationTarget Q2 2026Current milestone.

Most important updates

Upcoming

Q2 2026Aave v4 integration (next)

Current obstacles

Cross-chain messaging and price feedsKeeping Bitcoin collateral and loans synchronized across chains requires reliable oracles and cross-chain messaging, both sources of risk.

Physics limits

Bitcoin transaction throughputBitcoin processes ~7 transactions per second; scaling collateral updates requires efficient batching or sidechains.

How it works

2 parts

Threshold vaults

Bitcoin locked in cryptographic vaults

Users lock Bitcoin in threshold-signature vaults on Bitcoin. The vault cannot be accessed without cooperation from multiple parties.

Ethereum borrowing

Borrow stablecoins or tokens

The locked Bitcoin backs a borrowing position on Aave or other Ethereum protocols. Users receive stablecoins or other assets without selling Bitcoin.

Update log

2 updates

Wed 7 Jan

Major: a16z Crypto purchases $15 million BABY tokens to back Bitcoin Trustless VaultsPressFunding

Q1 2026

Major: Babylon and Aave partner on Bitcoin-backed borrowing in Aave v4PressOther

About Babylon Labs

The team behind Babylon Trustless Bitcoin Vaults

Babylon Labs

Bitcoin staking, Bitcoin security

Babylon Labs builds infrastructure for native Bitcoin staking and credit markets. Its Bitcoin staking protocol lets native Bitcoin holders stake directly from self-custodial wallets to secure proof-of-stake blockchains and earn yield without wrapping or intermediaries.

Over 57,000 BTC worth ~$4-5 billion is now staked through Babylon, securing proof-of-stake networks without leaving Bitcoin.
In January 2026, a16z Crypto purchased $15M BABY tokens to support Babylon Trustless Vaults development.
Native Bitcoin-backed borrowing is integrated with Aave v4, allowing Bitcoin to serve as collateral for decentralized finance.

babylonlabs.io (opens babylonlabs.io)Company profile →

Founded: 20224 yrs
Headquarters: United States
Status: Private
Valuation: private
Raised: $111M4 rounds
Last round: Token purchase · $15MJan 2026
Works in: CryptoData & restaking
Coverage: 2 programs · 4 updateslatest 7 Jan 2026checked 11 Oct
Lead investors: a16z CryptoParadigmPolychain CapitalHack VC
Partners: Aave (opens aave.com)Bitgo (opens bitgo.com)
People: David Tse (opens en.wikipedia.org)Co-founderFisher YuCo-founder