Babylon Labs, developer of the largest BTC stake protocol, is building a trust-minimized Bitcoin bridge with the Cosmos network to improve the interoperability of the world’s oldest blockchain.

Working with Bitcoin developers Fiamma, Babylon uses the BitVM2 computing paradigm, which is designed to allow Ethereum-style smart contracts on Bitcoin, which then paves the way for zero-knowledge technology.

Zero-knowledge calculations allow different parties to verify that the information is accurate without actually revealing to each other what the information is. In this sense, it is fundamental to bridge digital assets between different blockchains.

Developers like Babylon Labs and Fiamma aim to unlock the deep wells of value stored in BTC to fund other ecosystems and allow it to be traded on blockchains free of some of Bitcoin’s speed and scale limitations.

This is part of a broader movement to extract greater utility from Bitcoin, similar to what is common on networks like Ethereum. Babylon’s Bitcoin staking protocol, one of the leading projects in this sector, is billed as a way to use BTC to secure other protocols and decentralized applications and has a total value locked (TVL) of around $5.5 billion.

The introduction of BitVM2’s predecessor by Robin Linus in October 2023 was hailed as a breakthrough in making Bitcoin more programmable, by enabling a rollup that can handle faster and cheaper transactions without compromising security. This could then allow bridges to safely transfer BTC to the rollup and later bring BTC back so deposits can be withdrawn.

BitVM inspired plenty of fervor among developers building projects on Bitcoin, including some focused on bridging to other networks. Zero-knowledge rollup Citrea, which is backed by Galaxy Digital, deployed a BitVM-based bridge to the Bitcoin testnet last September. It is designed to be compatible with the Ethereum Virtual Machine (EVM), the smart contract execution software that powers the Ethereum protocol.

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