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40 changes: 40 additions & 0 deletions docs/guides/research/btc_trustless_vault.mdx
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---
sidebar_class_name: btc_trustless_vault_sidebar
sidebar_position: 3
---
import Link from '@docusaurus/Link';

# A Bitcoin-Charged Crypto Economy with Trustless Vaults

### Abstract

Bitcoin is by far the largest crypto asset by market capitalization, yet the vast majority of it
remains idle. Today, less than 1% of all bitcoins are bridged to smart contract platforms, where
most decentralized finance (DeFi) activity takes place. A key barrier to greater participation is
that existing Bitcoin bridges are either centralized or rely on significant trust assumptions. In
fact, due to the lack of covenants in the Bitcoin scripting language, there are no known ways to
build trustless Bitcoin bridges.

We bypass this barrier by introducing a different primitive: trustless Bitcoin vaults. Bitcoin
holders deposit their BTC into these on-chain vaults in a self-custodial fashion. The bitcoins in
each vault are tied to a specific smart contract protocol on an external chain. These vaults are
programmable, and withdrawals are permitted only when a zero-knowledge proof of a specific
smart contract state is verified on the Bitcoin chain. Together with an appropriate Bitcoin
scripting design of the vault, this eliminates the need for mutual trust among parties.
We demonstrate how this construction enables the use of native Bitcoin—without wrapping or
bridging—as collateral in many DeFi applications, including lending, stablecoin issuance, and
perpetual DEXs.

Leveraging recent advances in BitVM3, we present experimental results
showing that these vaults can be operated with minimal on-chain overhead—an essential
requirement for scaling trustless Bitcoin-backed DeFi. Bitcoin vaults built on top of the Babylon
Bitcoin staking protocol further improve capital efficiency by allowing staked BTC to act as
collateral in DeFi protocols. We conclude by discussing how trustless Bitcoin vaults significantly
strengthen the existing Babylon ecosystem and the utility of BABY as the token for its
decentralized governance.

<a
href="https://docs.babylonlabs.io/papers/trustless-bitcoin-vaults.pdf"
>
Read the Paper
</a>
3 changes: 1 addition & 2 deletions docs/guides/specifications/staking_transactions.mdx
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Expand Up @@ -8,15 +8,14 @@ sidebar_position: 1

import RemoteMD from '@site/src/components/RemoteMD';

export const rawUrl="https://raw.githubusercontent.com/babylonlabs-io/babylon/refs/heads/main/docs/transaction-impl-spec.md";
export const rawUrl="https://raw.githubusercontent.com/babylonlabs-io/babylon/refs/heads/release/v2.x/docs/transaction-impl-spec.md";

<RemoteMD
rawUrl={rawUrl}
hideRelease={false}
defaultRelease="next-v2.x"
releaseVersions={{
'next-v2.x': 'https://raw.githubusercontent.com/babylonlabs-io/babylon/refs/heads/release/v2.x/docs/transaction-impl-spec.md',
'next-v4.x': 'https://raw.githubusercontent.com/babylonlabs-io/babylon/refs/heads/release/v4.x/docs/transaction-impl-spec.md'
}}
/>

2 changes: 1 addition & 1 deletion docs/stakers/btc_stakers/btc_staking_tools.mdx
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Expand Up @@ -74,7 +74,7 @@ A list of custody services or platforms that will support BTC Staking.
| Ceffu | ✅ |
| Amber | ✅ |
| Coinbase | ❌ |
| Bitgo | |
| Bitgo | |

## Exchange

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Expand Up @@ -26,7 +26,9 @@ If your stake has already been transitioned and is listed in the **Babylon Genes
/>

## Step 3: Wait for the Unbonding Period and Withdraw
After you initiate the unbonding process, you need to wait for a specific period to complete the unbonding. Specifically, you must wait for 301 Bitcoin blocks (~2 days) to be mined, which typically takes around one week. This waiting period ensures the stability and security of the network.

After you initiate the unbonding process, you need to wait for a specific period to complete the unbonding. Specifically, you must wait for 301 Bitcoin blocks (~2 days) to be mined. This waiting period ensures the stability and security of the network. Note that in rare cases, network conditions could cause slight delays.

Once the unbonding period has elapsed, return to the staking history list in your wallet. Locate the unbonded stake. For stakes that have completed the unbonding process, you will see a **Withdraw** button. Click on the **Withdraw** button to transfer the unbonded funds back to your wallet. After clicking **Withdraw**, confirm the transaction in your wallet, and the funds will be on their way to your wallet address.

:::note
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11 changes: 11 additions & 0 deletions docusaurus.config.js
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Expand Up @@ -102,6 +102,17 @@ function create_doc_plugin({
const tailwindPlugin = require('./plugins/tailwind-plugin.cjs');
const docs_plugins = docs.map((doc) => create_doc_plugin(doc));
const plugins = [
[
'@docusaurus/plugin-client-redirects',
{
redirects: [
{
from: '/guides/baby_stakers/baby_staking_tools/', // the old URL
to: '/stakers/baby_stakers/', // the new URL
},
],
},
],
tailwindPlugin,
...docs_plugins,
...openapiPlugins
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