Author: Lesley
Source: MetaEra
As 2025 is just over halfway through, it is widely regarded as the year when cryptocurrency enters the global mainstream. Governments around the world are incorporating Bitcoin into their national reserves, and various enterprises are accelerating their allocations. According to statistics from bitcointreasuries.net, nearly 200 publicly traded companies and over ten governments globally hold more than 1.5 million Bitcoins. At this historical juncture, the Bitcoin staking protocol Babylon is frequently making moves, once again becoming a market focus.

In January 2022, Dr. Fisher Yu, a cryptographer and former senior engineer at Dolby Laboratories, co-founded Babylon with Professor David Tse, an engineering professor at Stanford University, member of the National Academy of Engineering, and an expert in information theory. Their entrepreneurial venture was driven by a profound insight into the industry landscape after the "DeFi Summer" of 2021—"At that time, there were thousands of chains and tens of thousands of DeFi applications, and the entire blockchain world was highly fragmented," Fisher Yu recalled. "We believe that one day, the trend will lead to a unification, and that unifying cornerstone must be Bitcoin."
In this interview, MetaEra will converse with Dr. Fisher Yu, co-founder and CTO of Babylon Labs, to delve into Babylon's technological innovations and the transformations it brings to the Bitcoin ecosystem.

Babylon: Unlocking the $2 Trillion "Productivity Paradox"

Currently, the core pain point facing the Bitcoin ecosystem is that Bitcoin holders can only passively hoard their coins and cannot earn returns through staking or collateralization. "Everyone is buying Bitcoin now—public companies are buying Bitcoin, even sovereign nations are buying Bitcoin, institutions and retail investors are buying Bitcoin. What happens after they buy?" Fisher Yu articulated the core dilemma of the Bitcoin ecosystem with this straightforward rhetorical question.

Bitcoin's market cap has surpassed $2 trillion (Source: Coingecko)
This situation is almost unimaginable in traditional asset management, Fisher Yu explained: "If treasury assets are cash, they can buy government bonds or fixed-income securities to earn returns; if they are non-cash assets like real estate or factories, they can be used as collateral to obtain loans from banks or credit institutions for investment or reproduction. But Bitcoin cannot—it's not programmable like Ethereum, so it can't do anything; it can only sit there as a means of value storage."
Fisher Yu defined this issue as the biggest resource mismatch in the blockchain world: "Bitcoin is the largest blockchain asset, yet it has not produced a synergistic effect with other chains." How can Bitcoin be upgraded from merely "digital gold" to a "productive asset"? This is precisely the problem Babylon is dedicated to solving.
Currently, Babylon focuses on addressing two issues:
1. Making Bitcoin have more uses: Babylon achieves this goal through two protocols: the Bitcoin staking protocol allows native Bitcoin to generate staking returns through multi-staking. The Bitcoin treasury protocol allows native Bitcoin to participate in any DeFi product, including collateralization, lending, stablecoin issuance, and even perpetual contracts.
2. Bringing Bitcoin liquidity to other blockchains: Allowing other chains to enjoy the support of Bitcoin liquidity.
"This not only solves Bitcoin's own liquidity problem but also addresses the issue of the blockchain world lacking this major asset, Bitcoin," Fisher Yu summarized.
Why did Babylon choose the Bitcoin ecosystem? The answer lies in security. Fisher Yu previously collaborated with Professor Sreeram, the founder of EigenLayer, to research the concept of "security sharing," where one blockchain outputs its security (computational power, consensus mechanism, staking assets, etc.) for use by other chains. Both Babylon and EigenLayer are based on this concept but have chosen different paths: Babylon chose the most secure Bitcoin, while EigenLayer is based on the more flexible Ethereum.
In Fisher Yu's view, Bitcoin is the most solid foundation for the future world. "Both Professor David Tse and I are staunch supporters of Satoshi Nakamoto. Bitcoin is the safest, and everything in the world should be based on Bitcoin." However, due to Bitcoin's immutability and other characteristics, this choice also brings greater technical challenges.
Fisher Yu explained, "Due to Bitcoin's non-programmability, all current Bitcoin-related protocols require users to hand over their Bitcoin to a third party, which is fundamentally unacceptable." While security is a prerequisite for blockchain, the real challenge lies in how to eliminate dependence on third parties while ensuring security, achieving true "trustlessness."

Trustless Bitcoin Treasury
Based on this dilemma, Babylon recently launched the "Trustless Bitcoin Treasury," which interacts with DeFi protocols on other chains through BitVM3 (a Bitcoin-native verification solution based on zero-knowledge proofs and obfuscated circuits). With the support of this solution, Bitcoin can always remain on the Bitcoin network while functioning like native DeFi collateral on multiple chains such as Ethereum and Cosmos. "This way, no one can steal your Bitcoin," Fisher Yu explained.
Looking ahead, Babylon's roadmap is divided into three phases:
1. Complete the Bitcoin staking protocol ------ Expanding from single staking to multi-staking, allowing one Bitcoin to be staked in multiple scenarios simultaneously, thus generating multiple sources of income;
2. Launch Babylon Genesis EVM ------ Deploying EVM on the Babylon chain, enabling DeFi protocols from the Ethereum ecosystem to run seamlessly on the Bitcoin network, further shaping the BTCFi ecosystem;
3. Introduce innovative products like BTC Vault to build a complete BTCFi ecosystem ------ Launching a testnet by the end of the year and officially releasing it the following year, providing richer financial tools for the Bitcoin ecosystem.
Fisher Yu firmly believes that a clear roadmap will help Babylon build a complete BTCFi financial system. "We want Bitcoin to be as user-friendly as Ethereum, or even better and more powerful," Dr. Fisher Yu said.

Collaborating with Public Companies: A "Two-Way Rush" Between Traditional Capital and the Crypto World

After clarifying the technical path, Babylon began exploring deep integration with traditional finance, with its first collaboration case being a strategic partnership with ATA. In August 2025, Nasdaq-listed company ATA Creativity Global (Nasdaq:AACG) signed a controlling agreement worth $100 million with Baby BTC Strategic Capital (a special purpose fund led by the Babylon Foundation as the main limited partner for holding public companies). This transaction structure differs from the typical hoarding model of public companies, marking a shift in the path for traditional financial institutions to participate in the Bitcoin ecosystem from mere asset purchases to deep ecological integration.

Baby BTC Strategic Capital signs a term sheet with Nasdaq-listed company ATA Creativity Global
Baby BTC Strategic Capital partner Gigi further explained that the strategic cooperation between ATA Creativity Global and Baby BTC Strategic Capital constructs an innovative business model of "public holding platform + token asset acquisition + staking ecological returns," with specific details including:
• Completing the holding structure reorganization with a $100 million investment from Baby BTC Strategic Capital;
• Deeply binding the public company platform with the Babylon ecosystem;
• Focusing on BTC staking returns and BTCFi ecosystem construction;
• Dynamically optimizing the asset allocation ratio between Baby tokens and BTC.
This cooperation model aligns closely with Babylon's original intention. "Our team hopes to collaborate with public companies to help them deploy and advance their 'advanced Bitcoin treasury strategy,' rather than simply buying Bitcoin and hoarding it," Fisher Yu believes that the partnership with ATA is a typical demonstration case, and more similar collaborations will occur in the future: "ATA is the first, but it will not be the last. Our goal is to help more public companies design and execute more advanced Bitcoin treasury strategies."
Fisher Yu pointed out that this collaboration method will provide significant assistance to public companies, "Currently, hundreds of public companies with total assets exceeding hundreds of billions of dollars are buying Bitcoin, but they urgently need a safe, reliable solution without third-party custody risks to deploy these Bitcoins. Otherwise, these assets can only passively sit on the balance sheet, unable to generate additional value."
The logic for promoting this model is clear: Babylon focuses on technology development and the growth of crypto-native users, while expansion into traditional industries will be achieved through public company platforms. "Babylon only focuses on the application landing in the crypto space, while the adoption in the Web2 domain will be driven by public companies," Fisher Yu stated.

Industry Restructuring Effect------A Two-Way Rush Between the Mainstream World and the Crypto World

As traditional capital enters the crypto space in large numbers, doubts about whether the spirit of decentralization will be diluted are constantly raised. Fisher Yu clearly responded, stating, "I don't think the large-scale entry of centralized institutions into the blockchain space contradicts the spirit of decentralization."
He divides the centralization of the Bitcoin ecosystem into two dimensions: "Decentralization refers to two aspects: the first is that the chain's maintainers are decentralized, and the second is that the distribution of coin holders is as broad as possible."
• From the perspective of chain maintainers, institutional participation has not changed the operational structure of the blockchain. "There are nearly two hundred companies buying Bitcoin now, but the Bitcoin miners are still the same ones as before."
• From the perspective of coin holder distribution, traditional capital has actually promoted the decentralization of holder distribution: "Public companies hold a coin, but in reality, this coin belongs to all its shareholders, not just one entity of the company. So, the effective holders of Bitcoin have actually increased."
Fisher Yu believes that Bitcoin's move towards the mainstream is a natural evolution: "Bitcoin will gradually be recognized and adopted by the mainstream world." He emphasized that this process is not something the crypto industry actively sought, but rather the mainstream world is actively approaching. "The Bitcoin system is truly decentralized, with no foundation or operators pushing for its popularity. It is the mainstream that actively recognizes and accepts Bitcoin." And when the mainstream world understands the concept of decentralization through Bitcoin, their attitudes become more open and inclusive, "Coincidentally, the crypto circle also wants to break out, thus forming this two-way rush situation."
Partner Gigi of Baby BTC Strategic Capital also clarified the historical mission of this collaboration with ATA from another perspective: "To build a bridge connecting traditional finance and the crypto ecosystem, releasing new value for Bitcoin assets through innovative financial tools." In the future, Babylon will also surprise the mainstream world with comprehensive solutions.

Conclusion: The Moment of Value Release for the Bitcoin Ecosystem

As the world's attention turns to Bitcoin, Babylon is redefining the game with technology. Fisher Yu's ambition is simple: to make Bitcoin no longer a passive "digital gold," but a productive asset that actively creates value.
The influx of traditional capital is not coincidental. Starting from the strategic cooperation between Babylon and public companies, public companies are transitioning from merely "buying and hoarding coins" to deeply participating in the construction of the crypto ecosystem. This is not a betrayal of decentralization but its true victory—when the mainstream world actively embraces Bitcoin, the concept of decentralization gains broader dissemination.
From Satoshi Nakamoto's white paper to today's ecological prosperity, Bitcoin has proven the possibility of decentralized finance over sixteen years. And now, it is opening the next sixteen years—from value storage to value creation, from marginal revolution to mainstream infrastructure. This is not only a victory of technology but also a legacy of ideas.