Babylon Teams Up With Asphere On Bitcoin L2 Infrastructure

Babylon, the hyped Bitcoin staking protocol, is expanding to offer infrastructure facilitating the deployment Bitcoin Layer 2 networks.

On Sept. 25, Babylon announced a partnership with Asphere, the rollup-as-a-service provider from Ankr, to develop an end-to-end solution allowing developers to launch Layer 2 chains on top of Bitcoin.

L2s launched via the solution will derive security from Babylon-powered BTC staking. Bitcoin holders can contribute to Babylon's security layer and earn yield by operating a node collateralized by a stake of BTC. Node operators’ stakes are slashed in the event of dishonest conduct, disincentivizing validators from misbehaving.

Asphere and Babylon emphasized that by tapping into Bitcoin's $1 trillion market cap for security, networks launching on top of Babylon's architecture overcome the need to bootstrap security capital.

"Developers can now tap into a trillion-dollar pool of BTC security for their chains,” said Stanley Wu, the chief technology of Asphere.

"Through our collaboration with Asphere, we're enabling developers to build innovative Bitcoin Layer 2 solutions with unparalleled security from the Bitcoin network," said Fisher Yu, Babylon's co-founder.

Babylon completed the first phase of its mainnet rollout on Aug. 22, allowing users to deposit BTC and begin earning points. Babylon will next launch its own BTC-secured Layer 2 network, before launching a marketplace allowing other Proof of Stake networks and systems to leverage its staking layer for security.

Babylon is a Cosmos-based chain, meaning L2s built on top of the protocol inherit Cosmos’ Comet BFT consensus mechanism, IBC Protocol interoperability, and Bitcoin timestamping features.

Neura is currently building blockchain leveraging the L2 solution from Babylon and Asphere, with the project targeting a mainnet launch during Q4 2024.

BTCfi booms

The news comes as Bitcoin's "BTCfi" ecosystem is enjoying a rapid rise amid the growth of Bitcoin sidechains and Layer 2 networks, with many chains and protocols offering incentives in the form of native tokens in exchange for users "staking" their Bitcoin.

Babylon’s initial staking cap of 1,000 BTC ($63.6 million) was filled less than three-and-a-half hours after opening deposits, despite Babylon limiting individual deposits to just 0.05 BTC per transaction in a bid to foster broad participation.

Core has recently emerged as the top Bitcoin sidechain by total value locked (TVL) with $440 million following the growth of liquid staking on the network, according to CoinGecko. Bitlayer ranks second with $377.4 while Stacks is third with $229.8 million, with both networks also enjoying a recent liquid staking boom.

Bitcoin Layer 2 and sidechains boast a combined market cap of $1.58 billion.