Bitcoin was proposed in 2008 as a “peer-to-peer version of electronic cash,” a new type of money. Since then, people, institutions, and nations have primarily relied on Bitcoin as a digital store of value, a new-aged digital gold.
This has been an incredible opportunity for individuals around the world whose local currencies remain unstable, as well as for institutions and countries seeking a secure way to store value on their balance sheets.
Unfortunately, Bitcoin’s immense potential beyond being digital cash remains unfulfilled. Because of Bitcoin’s limited programmability, thousands of BTC are sitting dormant in digital vaults rather than being active in DeFi.
We believe this can change, and that Bitcoin has the potential to become a thriving digital collateral for credit. Using BTC as collateral will unlock the largest source of untapped onchain capital for DeFi and make Bitcoin a productive asset for holders.
This vision of the future leads us to Babylon.
Babylon began as a Bitcoin staking protocol and is now planning to expand into lending through its trustless vaults architecture. Trustless vaults are built using witness encryption and garbled circuits, enabling Bitcoin to be used natively in DeFi without wrapping or custodians.
In the short term, we are excited about the prospect of Babylon expanding as a native Bitcoin lending protocol and believe it could help offer a credibly neutral form of Bitcoin for use in lending protocols, rather than exchange- or multi-sig-wrapped versions. In the long term, we see the potential for Bitcoin as collateral in perpetual futures exchanges and stablecoins.
Babylon was founded by David Tse and Fisher Yu. I’ve known David for many years, beginning as his student during EE 374 (Scaling Blockchains) at Stanford. He isn’t just a brilliant academic, but a tireless worker with one of the broadest coaching trees in crypto. David’s PhD students, Joachim Neu and Nusret Tas, currently work on our research team. He collaborated with Sreeram Kannan, now the founder of EigenLayer, on several papers, including Prism, which is how I originally met Sreeram. David was also Dionyzis Zindros’ post-doc advisor at Stanford before Dionyzis founded Common Prefix and helped start Pod. We’ve discussed Babylon with David for years, and seen him grow from an outstanding academic into an outstanding founder.
David is joined by Fisher Yu and a deep bench of strong technical and GTM talent. Fisher marries a breadth of technical expertise with a pragmatism in making Bitcoin more useful for the world.
We are excited to back David, Fisher, and the Babylon protocol with a $15M purchase of $BABY, and to be a part of the next evolution of Bitcoin utility.
