Last month, my buddy Lao Chen had two Bitcoins in his hand, worth about 120k U. He wanted to just hold them and earn interest. But after researching for a week, he worried that using WBTC on AAVE might run into trouble with cross-chain bridges, and exchange wealth-management yields were pitifully low. After fiddling with it for a week, he sighed: “Forget it—I’ll just keep them in a cold wallet. At least I can sleep at night.”
I couldn’t help but laugh—doesn’t that basically describe the collective dilemma of BTC holders? All the money just sits there gathering dust, and getting any passive income feels harder than climbing a ladder to heaven. But then I checked the yields of different assets, and it hurt even more. USDC annualized is 6.51%, USDT is 4.59%, and even SOL is 2.69%—while BTC is only 0.27%.
So where’s the problem? BTC can’t be staked directly to earn yield. If you want returns, you have to go through WBTC or a cross-chain bridge. But with custody risks and hackers hitting exchanges all the time, who would dare throw their BTC over there?
Until last year, Babylon came up with a new idea. It uses Bitcoin-native time locks and Taproot scripts, letting you lock BTC in your own mainnet treasury without bridging or wrapping. The assets never leave your custody. The logic is clear, right? Once the risk dropped, capital indeed bought in. TVL shot up to as high as 6 billion, and even now it’s still around 4 billion, accounting for about 80% of BTC DeFi.
Recently it also integrated with Aave V4, which is a sign of mainstream recognition.
But honestly, after reading its whitepaper for hours, I found an awkward truth: the interest rate has stayed below 1% for a long time. Honestly, that yield isn’t very compelling. More importantly, the $BABY token hardly participates in the business closed loop; the staking and security services people pay for are mostly BTC or other on-chain native assets. BABY mainly relies on governance and liquid/staked mixing to support things. It feels more like a one-off demand—so will there be strong enough long-term spot buying pressure? I genuinely have doubts.
The tech is definitely impressive, but the token price ultimately depends on real consumption. With BTC worth 1.3 trillion, even if you could capture just 3%, that’s nearly 40 billion in market impact. So if you’re buying BABY based on the “BTC ecosystem #1” narrative, ask yourself this: no matter how well the business runs, what is the actual relationship to the coins you hold—before you act. @BabylonLabs_io #baby
I couldn’t help but laugh—doesn’t that basically describe the collective dilemma of BTC holders? All the money just sits there gathering dust, and getting any passive income feels harder than climbing a ladder to heaven. But then I checked the yields of different assets, and it hurt even more. USDC annualized is 6.51%, USDT is 4.59%, and even SOL is 2.69%—while BTC is only 0.27%.
So where’s the problem? BTC can’t be staked directly to earn yield. If you want returns, you have to go through WBTC or a cross-chain bridge. But with custody risks and hackers hitting exchanges all the time, who would dare throw their BTC over there?
Until last year, Babylon came up with a new idea. It uses Bitcoin-native time locks and Taproot scripts, letting you lock BTC in your own mainnet treasury without bridging or wrapping. The assets never leave your custody. The logic is clear, right? Once the risk dropped, capital indeed bought in. TVL shot up to as high as 6 billion, and even now it’s still around 4 billion, accounting for about 80% of BTC DeFi.
Recently it also integrated with Aave V4, which is a sign of mainstream recognition.
But honestly, after reading its whitepaper for hours, I found an awkward truth: the interest rate has stayed below 1% for a long time. Honestly, that yield isn’t very compelling. More importantly, the $BABY token hardly participates in the business closed loop; the staking and security services people pay for are mostly BTC or other on-chain native assets. BABY mainly relies on governance and liquid/staked mixing to support things. It feels more like a one-off demand—so will there be strong enough long-term spot buying pressure? I genuinely have doubts.
The tech is definitely impressive, but the token price ultimately depends on real consumption. With BTC worth 1.3 trillion, even if you could capture just 3%, that’s nearly 40 billion in market impact. So if you’re buying BABY based on the “BTC ecosystem #1” narrative, ask yourself this: no matter how well the business runs, what is the actual relationship to the coins you hold—before you act. @BabylonLabs_io #baby