Babylon Genesis to launch as a Bitcoin-secured L1 and liquidity hub

The chain could mark a turning point in bitcoin’s utility

article-image

Babylon Labs and VRVIRUS/Shutterstock and Adobe modified by Blockworks

share

This is a segment from the 0xResearch newsletter. To read full editions, subscribe.


Babylon Labs has released details of Genesis, the first-ever bitcoin-secured layer-1 blockchain.

Based on Babylon’s own bitcoin staking technology, the chain marks a turning point in bitcoin’s utility. Genesis has the potential to turn BTC from a passive store-of-value asset (derided as a “pet rock”) into a cornerstone for proof-of-stake (PoS) security and liquidity.

Ancient Babylon’s Code of Hammurabi, one of the oldest recorded legal codes (circa 1754 BC), introduced the concept of codified, public and enforceable rules with clear penalties for violations. It marked a transition from informal justice (based on trust, status or brute force) to a formal system of accountability.

Babylon’s bitcoin staking introduces a modern crypto-native parallel, codifying slashing-based accountability into bitcoin staking.

Since Babylon’s August 2024 launch of Phase 1, the protocol has attracted as much as 57.5k BTC staked in self-custodial contracts. It ranks third by staking market cap — behind Lido and EigenLayer, which currently have about $4.4 billion in assets. Despite this impressive figure, it represents just 0.27% of bitcoin’s total supply.

Instead of relying on custodial bridges or centralized intermediaries, the Babylon protocol enables native BTC holders to secure PoS networks without ever relinquishing control of their coins. That focus on self-custody and trust-minimized participation appeals to long-time Bitcoiners like Spencer Yang, co-founder of Fractal Bitcoin.

“Bitcoin OGs really care about custodying [their] own keys, having control over [their] own financial decisions,” Yang said.

The “three facets”

Babylon Genesis functions as:

  • A bitcoin-secured L1 — built on CometBFT from the Cosmos stack with dual-quorum staking: 100 validators staking BABY (the L1’s native token) plus 60 BTC-staked finality providers. The network boasts hourly Bitcoin timestamping for fast unbonding and protection against long-range attacks.
  • A control plane — Genesis coordinates security and staking information across what it terms BSNs, or Bitcoin Secured Networks. BSNs use Genesis for timestamping, finality and protocol integration, sharing revenue back to Genesis participants.
  • A BTC liquidity hub — with DEXs, restaking, vaults and, in a subsequent phase, BTC LST minting. Genesis will compete as a prime venue for BTCFi, with other trust-minimized bridge destinations building on BitVM.

Babylon certainly has some narrative winds in its sails. “Babylon Genesis feels like something that could change the entire system,” wrote @jack_mfer on X. “Every network that connects to Genesis benefits from Bitcoin’s strength.”

Dozens of other protocols and teams have rallied around the Babylon ecosystem, such as:

  • Liquid staking: PumpBTC, Chakra, Solv, Acorn, Bedrock
  • Custodians/wallets: Binance, Anchorage, Cobo, OKX
  • Bitcoin-secured networks: Osmosis, Sei, Nomic, Manta, Corn, Cosmos Hub
  • Finality providers: Kiln, Chorus One, P2P, Figment, Blockdaemon
  • Infra: AltLayer, Ankr, Satlayer

Next up: A trust-minimized bridge

To fulfill its role as a liquidity hub, Babylon is building a trust-minimized bridge between Bitcoin and Genesis, with research grounded in BitVM2. The goal is to remove the need for trusted multisigs in BTC bridging and enable native staking for apps and other networks without needing upgrades to Bitcoin Core, explained Babylon co-founder David Tse.

“Rather than waiting for protocol changes, simply leverage Bitcoin’s existing capabilities in novel ways,” Tse said, “replacing trusted committees with bitcoin-backed stakers who face automatic slashing for misbehavior.”

The ambitions of Babylon Genesis thus go beyond being a proof-of-concept bitcoin-secured chain, but extend to a Bitcoin-native coordination layer designed around trustless interoperability, liquidity and PoS security with crypto’s premier asset.

Bitcoin’s market cap is larger than all other crypto assets combined, noted Dan Held, general partner at Asymmetric. “If we unlock any sort of DeFi activity on top of Bitcoin, that would soon be larger than all other DeFi combined.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Unlocked by Template.png

Research

The march toward an interoperable and onchain-by-default internet depends on reliable messaging and value transfer across heterogeneous domains. Crosschain protocols now process >$1.3T in combined annual transfer volume and secure tens of millions of user interactions, yet no single design dominates.

article-image

Industry executives weigh in on last week’s “stress test” and the importance of stablecoins

article-image

Eigen Labs’ J.T. Rose pitched verifiable off-chain compute with agentic AI coming to Ethereum

article-image

The block appears to have been ongoing for over eight months

article-image

Coinbase and Mastercard’s BVNK bids illustrate how hot the stablecoin acquisition space has become

article-image

BitMine boosts holdings to more than 3 million ETH following significant market upheaval at the end of last week

by Blockworks /
article-image

Reform UK’s party leader Farage took the stage at DAS London this morning

by Blockworks /