On January 10, 2025, Babylon Labs and Fiamma announced a significant development in Bitcoin's interoperability by creating a trust-minimized bridge with the Cosmos network. This initiative aims to unlock the value stored in Bitcoin (BTC) and facilitate transactions across various blockchains.
Babylon Labs, known for its leading BTC staking protocol, is leveraging the BitVM2 paradigm to enable Ethereum-style smart contracts on Bitcoin, which could enhance transaction speed and reduce costs. This technology is essential for bridging assets between different networks while maintaining security.
The total value locked (TVL) in Babylon's Bitcoin staking protocol stands at approximately $5.5 billion, indicating strong interest in utilizing BTC for securing decentralized applications and protocols. The introduction of BitVM2 in October 2023 has been a pivotal moment, allowing for programmable Bitcoin transactions and the possibility of securely transferring BTC to rollups.
Moreover, the zero-knowledge rollup Citrea, backed by Galaxy Digital, successfully deployed a BitVM-based bridge to the Bitcoin testnet in September 2024, showcasing the growing enthusiasm among developers to enhance Bitcoin's functionality.