On-Chain Bitcoin Questions Babylon’s Vault Design
A new article by On-Chain Bitcoin critically examines the trustlessness of Babylon’s BTC vaults, analyzing their BitVM3 and garbled circuit design and highlighting key off-chain trust assumptions behind the system.
onchainbitcoin.substack.com
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How “Trustless” are Babylon’s Bitcoin Vaults, Really?
Babylon’s vaults are a clever experiment and a milestone in off-chain cryptography applied to Bitcoin.
But they replace verifiable, deterministic Bitcoin guarantees with complex, probabilistic ones.
For real-world lending, the operational overhead (setup, storage, evaluation, challengers) is enormous compared to simpler, battle-tested models like DLCs or multisig with transparent governance.