Babylon: Self-Custodial Bitcoin Native Staking & Bitcoin-Secured Networks - David Tse. Ep. 582

Transcript

Bitcoin such a viable asset such a strong Security Source is totally isolated from the proof of State World which is exploding is there a way to combine the two together so that the whole crypto system can benefit as a whole and that's where the idea Babylon comes from which is to share Bitcoin security with proof of thick networks and we came up this concept of Bitcoin sticking although Bitcoin does not support smart contract like ethereum does there are still a lot of smart things you can do around it to make things work without a soft form oh but the bridge over liquidity is the key to the story welcome to EP the show which talks about

Technologies projects and people driving decentralization and the global boxing Revolution so my name is Brian Crane and I'm here with Sebastian CER course representer and we're here today with David say who's a professor at Sanford and he's also the founder of Babylon uh Babylon is a you know very interesting project that's using Bitcoin security and Bitcoin staking to basically secure additional networks and services that's gotten a lot of fraction over the last year so really excited to have that David on today and just before we get in with David a few words from our sponsors if you're looking to stake your

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network with just one gno and affordable Hardware start your decentralization journey today at nosis doio David thanks so much for joining us today it's a pleasure to have you on great to be here Brian the question we love to start this show with is just what's your crypto Journey how did you get first interested in crypto yeah so um so my background is a researcher so in my early days of my career I was doing research on wireless communication how to make cell phones work back in the day when I started only 1 million people have cell phones around

the world and now everybody has cell phone so there was a Revolution going on and my research contributed to that revolution of making cell phones uh more efficient uh so now we're forward we're at 2018 so at that point this uh Mobile Wireless revolution has already uh quite mature and I was looking for a new research area and I came across nakamoto's white paper and that was my first exposure to crypto and I read that white paper and I got completely blown away by the beauty and elegance and the power of the ideas and I started a research group at Stanford uh devoting exclusively to research in crypto and I'm the at this

point I'm still the only research group at staford exclusively focused on crypto research crypto as in blockchain research yes oh that's interesting yeah yeah because I mean Stanford has a long history right with blockchain research I know there's like Dan Bonet I think who is early on um and I mean a lot of things that came out of Stanford know that's kind of blockchain related yes correct Dan Bon is of course one of the world famous cryptographer um his group however is very broad focuses on cryptography and blockchain is one of his applications I would like to distinguish uh in our group the focus is exclusively on

blockchain so all our research is driven from blockchain okay and then how how did that evolve into uh Babylon our journey our research Journey started with bitcon right nakamoto's white paper um however what happened in the past few years is that the research and the development has entirely shifted the energy into proof of stick Networks which kind of left Bitcoin in the dust in terms of Technology development however Bitcoin remains a very valuable asset at this in to this day is 50% of the crypto Market more

than 50% of the crypto market and it's security is unparalleled compared to any other blockchains and so the idea we had at some point was hey Bitcoin such a viable asset such a strong Security Source is totally isolated from the proof of State World which is exploding is there a way to combine the two together so that the whole crypto system can benefit as a whole and that's where the idea of Babylon comes from which is to share Bitcoin security with proof of sck networks and we came up this concept of Bitcoin sticking which is to convert this uh one point this point I don't know 1.5 1.6 1.7 trillion

asset to thinkable asset and that's where Babylon arised so I was in 2017 right a CEO of tenament to the company started the cosmos SEC system and I remember hearing about Babylon like some years ago uh and I think the way I remember it back then was the idea that you could take these proof of stake blockchains and they could basically uh use Bitcoin as a to sort of timestamping server or a Time stamping place right where you put the so hash of the block CH Block in there so then if someone joins new WR some some proof of sake networks they could sort of go to the Bitcoin blockchain and and make sure

that uh you know it's really the authoritative chain that they're talking with it was that the original idea or or how did this kind of revolve yeah Babylon has an interesting story from in the point from point of view of evolution technology so the north star of Babylon it's always been sharing security from Bitcoin to proof of St networks that's always been our Focus from day one however the means and the technology in the protocol by which it does have gone through an evolution so the our original idea was actually an idea of Nakamoto which is called merch mining so merch mining was an idea that was invented by Nakamoto in around 20110

2011 time frame uh the idea is that Bitcoin miners can sign potentially mind on another proof of work chain and we were using that idea to see if we can share security proof of Sate networks and then we turn out that we find out some security issues with merge Mining and so we moved on to this time stamping protocol that was our second invention uh that's what Brian that's what you talk about uh time stamping is basically sending a hash uh of the signatures of the validators of the proof of St networks onto uh Bitcoin so that you can have a time stamp on these blocks and it gives you Bitcoin security however timestamping has one drawback and the

drawback is that because Bitcoin is so slow time stamping is a very slow process so this scale security is very slow and as you know one of the strength of proof of stake networks is that you get very fast confirmation a few seconds as opposed to bitcoin which is minutes or even hours and so time stamping doesn't really give us that fast confirmation strengthening of roof of stick security and so our third idea was to use the Bitcoin not the chain itself but the asset to provide security and that's what Bitcoin sticking came from and because using the asset now you can keep the fast confirmation of proof of State networks

but strengthen it by increasing the amount of capital by adding the Bitcoin Capital to provider security yeah it's really impressive to see babylon's Evolution uh since those early days when you guys were working on time stamping I did a podcast with Fischer at Cosmo vers in medine and you had just announced this um this Bitcoin time staing mechanism that effectively as a product would allow um delegators on proof of steak networks to to withdraw their Capital faster uh which was like a really interesting idea in itself but then this proof this this Bitcoin staking uh idea emerged from there I wonder you know coming from uh the research side of things and and

specifically you know as a product that aims to I mean effectively turn Bitcoin assets into a derivative that would then secure other networks and everything that that implies you know what was the reaction what has been your interaction or your reaction with you know the the Bitcoin Community which typically is a little bit more conservative and uh you know from from my perspective make perhaps a little bit more closed off to those ideas and how has that conversation changed over the last two years as we've seen more and more uh Bitcoin l2s and uh more things being built on top of Bitcoin yeah so when we started with this Bitcoin sticking idea when we uh it was about 2023 uh about summer of 2023 that's when

we came up with the light paper for Bitcoin sticking and we started talking to various communities and indeed the Bitcoin ogs are supposed to be quite conservative however I must say uh overall we find the reception pretty good and I think we're helped by a few external forces uh so if you remember earlier that year uh or notes started or notes started and that was sort of a mindset change to bitcoiners that hey you know what Bitcoin has more use cases than just hoto and a payment system and I think that was a very important time change for us and you

mentioned at the later part of that year Bitcoin L2 start emerging uh and so forth and I think we kind of helped by that broader movement of sort of a new way of look at Bitcoin we call it Bitcoin Renaissance um and I think we became sort of a leader of that Mo movement because we started doing this research a few years back and I think the timing was the helpful to us so in this discussion right on uh Bitcoin and sort of what is enabled on the L1 and you know should there be some kind of upgrades that allow more

expressivity more I don't know some kind of minimal smart contract better bridging has been there for a long time I'm curious can you talk a little bit about you know the technical challenges because I mean Babylon because I think so far still right the not a lot of upgrades have happened in Bitcoin and it's still like very limited uh so how did you guys manage to enable that staking functionality in Bitcoin yeah uh in fact uh when we were discussing about Bitcoin staking uh one of the uh early idea we had in fact was

the through discussion with Sago you about the cosmos ecosystem so in fact Sunny came to me in one of the East you you remembered at the cosmos vers meta in um Sunny talked about Mash security Mash security and that was the security between Cosmos blockchains and East Denver which was in 2024 very early he came to me and say hey wouldn't it be great to do m security with one of the producer security as Bitcoin that would be great and so the initial idea we were discussing with sunny I remember still remember very very vividly was hey would it be great if we can Bridge Bitcoin to one of these Cosmos chains

like Babylon or osmosis and then share security through the MCH security network okay so that was our sort of initial thought but then we had a problem because Bridges from Bitcoin to any chain is well known to be very hard to build to be secure and to this day there's no secure Bitcoin Bridge Beyond just like a multi- bridge and uh and then we went back to history and we noticed that in 20115 there was an effort called drive chain which is to upgrade Bitcoin to enable such a bridge to happen it's called drave you can look back I think the first proposal came out around 2015 time frame but then I I I CED sty I said

you know sty there's a problem here because today we at 2024 and this proposal was issued in 2015 is still not passed yet uh so I don't think we should wait for this drive chain to happen because this is nine years down the road here and who knows we may have to wait nine more years and so we start thinking uh so but uh after this discussion was Sunday we I came back to the team we start discussing very actively and what we figure out basically to achieve Bitcoin scking is really a way to sort of bypass this Mar contract limitation and still enable Bitcoin sticking without any soft fork and so sort of one of the key uh sort of new

ideas this past year from a research point of view is that although Bitcoin does not support smart contract like ethereum does there are still a lot of smart things you can do around it to make things work without a soft for and so that has been sort of our sort of uh drive to accomplish that and for Bitcoin sticking we accomplish that and um you also you may also know like new ideas like bit VM bridge for example that is another way of sort trying to accomplish that a different functionality bridging in that case without soft for how how important is this um this opcat upgrade and maybe for perhap

perhaps we be helpful to provide some context here as to what that upgrade enables and why so many projects building on bitcoin are just like waiting for that to come online oh so opcat is actually a very powerful thing opcat is basically concatenating two strings together sounds like something stupid something very basic but yet Bitcoin scripting doesn't support that in fact it was in the original version of the Bitcoin scripting Language by nikomo but it was deleted by nomoto himself and so the effort here to restore that uh uh that op code now one it it can accomplish many things but one thing it can accomplish through some trickery is this

notion of Covenant this notion of Covenant that is you can write a Bitcoin script to Define how you spend the money in other words you can't just spend the money by signing and then send it to anyone else there you you can put restriction on on where and how and how much to spend to who that is not possible in the current bitcoin scripting language and enabling that turns out to be rather powerful and it could make many things much simpler and significantly cheaper in terms of transaction fees in other words when instead of writing a lot of code and having to a lot huge script you can get by with a much more complex

script uh and that's what op enables does it also enable multiplication is is is it uh useful in the ability to do proofs on chain as well uh yes so there's a lot of effort by stocket and a few a few teams to do so-called a ZK proof verification on chain using opcat and uh I'm not an expert in that area and my research does not cover that problem but I do believe it does help with some Feud multiplication uh I think the stock the virtual stock is called circle circle

stock uh and that uh enables some multiplication but I'm not an expert in that area so yeah okay got it I mean are you are you aware of any of the current attemps and and presumably like the ZK proof that was done on Chain by the Bitcoin OS team and some of the work being done over by um by the bit layer team to do a proof on chain so uh to be clear to be clear that these efforts are not doing proof on chain the proof is generated off chain and so the challenge here is to verify what the proof is a correct proof on chain so you can tell Bitcoin to spend the money at the appropriate to the

appropriate person yeah my statement was was inaccurate right you want to verify the proof on chain yeah because proof generation is typically a very expensive process and so there's no way you can do that check but the verification uh typically is much cheaper than Pro verification but for Bitcoin even that Pro verification is very tricky to do because of the primitiveness of the Bitcoin scripting language and so all these efforts are trying to do that so so here there are two efforts two types of two approaches to solve this problem and one is as you mentioned uh using assuming op can is passed then you can Implement more efficient uh say multiplication that you

mentioned okay so that's one effort uh but that effort has a problem because it assumes op cat and I don't think we're close to seeing op cap pass at this moment and um so the other effort is not assuming opcat but using an approach called optimistic verification optimistic verification which means what which means that in optimistic case you don't verify anything you just assume that the bridge operator is correct in the assertion but only when you are challenged by an external

Challenger then you do the verification and that verification you can do uh cheaper because the challer can pinpoint a specific part of the computation or the ification and say hey you know what I think this part you've cheated please show me the correct your verification of this part and I can convince uh Bitcoin that you're actually wrong and so and this is a bit like the abrum type ideas and I think that approach is in some sense more practical because it doesn't assume op can and I I myself is doing research in that direction so can you talk a little bit about how how the Bitcoin staking works

like right now so if somebody says hey I have some Bitcoin and I want to you know basically deposit this in Babylon and uh stake the Bitcoin what actually happens on technically on the Bitcoin chain yeah so very importantly Bitcoin sticking is a completely native uh Bitcoin use case so it's direct interaction with the Bitcoin chain so what happens here is that if you have one Bitcoin your one Bitcoin is held in a So-Cal utxo utxo okay so now you create another utxo yourself and you send that Bitcoin to that utxo still under your own Casto now

but that utxo has a few special spending conditions spending conditions the one for one is that is a time lock it's a time lock that locks your Bitcoin and you cannot withdraw it until until a certain time or until you send another request which is like in Cosmos change an unbounding request so there's a time lock mechanism two is that there is a slashing mechanism and this this is the crucial part of how this Bitcoin can provide security to a say Cosmos chain or a row up is that this slashing condition is

activated with associate with a what we call finel provider or in more standard Pro of stick language a validator this validator in charge of securing a proof of State chain or row up and the contract here is that as long as this value is Hest the slashing condition is never activated never activated however if it does something bad then this slashing condition can be activated and your fraction of your one bit can be spent through the slashing and sent to a burn address so this is roughly how it works so you as a sticker has to pick one particular finale

provider that you stick to and it could be yourself can you uh tell us a little bit about so now someone is staking the Bitcoin and then we have these Bitcoin secured networks right so these are some networks that now are relying on this Bitcoin security how do the Bitcoin security networks work Al so just to clarify we are right now in phase one of our main net launch okay The Babylon uh protocol is launched in phase one so in phase one only staking only locking of the Stak occurs and there are no big close

security network for yet oh in phase two and three we launch more we launch uh bigcoin secureity networks now so so example of such Network could be I don't know osmosis or row up like this the this this R called corn that we work with so how does it work okay so there will be they uh right now on our Network there are 200 around 200 finale providers okay so fake and P2P Etc coso station Etc these are finale

providers and now when these bsns Bitcoin secure networks are launched some of these finel provider will choose to secure these networks okay and to secure these networks they will sign some special signatures to certify these blocks as Bitcoin secured and their job is to make sure they sign only one block at every height to make sure that you have a linear blockchain going and so uh their slashing capability is to make sure that they do that in other words they cannot double sign two blocks to try to for the chain

and this is where the security comes from so in so when a client in one of these networks sees many these finan provider signature then they know whoa this block is really super secure and I can trust this block and I can trust the transactions in this blocks and then let's say if we take the osmosis example I mean osmosis has its own staking token osmo and it has uh you know significant number of validators already if that now becomes a Bitcoin secure network then like how does that interact with the existing security system that

that's already there yeah so that's a very good question that's right osmosis already valuators signing the blocks so why do we need these Bitcoin secured uh signatures well so you can think of uh a good analogy uh us analogy would be like a house and a senate okay so legislation AV voted by both the house and the Senate very American sorry very American example but I do live live in the US so uh so the same similar system would be happening in the osmosis case so the osmosis validators will sign on the Block as the first committee and then on top of that there's another committee which are

these Bitcoin secure signatures bitco finale provider signatures that signs again on top of this block so a client will check both the osmosis signatures and the finale provider signatures and see that okay both commit have signed and so this block is now getting you can think of additional security so think about it I don't know um osmosis security could be say 300 million worth of osmo stick I don't know what exact number today but example 300 million on top of that you have another I don't know one billion of Bitcoin Stak

security W then you have a total of 1.3 billion worth of security on top of Osmosis much stronger level of security than just the osmosis stick by itself what what's the utility I mean like you know for for chains with like arguably good security like osmosis or the cosmos Hub that are secured by like large amounts of stake what's the tangible benefit for users to have that additional layer of security uh you know purely on the security side I you know I understand that there's like implications here in terms of having the ability to Bridge Over liquidity Etc how does that play out oh but the bridge over liquidity is the key to the story so first of all the

security should be proportional to the amount of liquidity that you maintain on the chi right so you want to have a lot of liquidity lot of asset on the Chain then you should have corresponding amount of security to protect that asset so therefore the value of for osmosis of increasing the security is precisely to absorb or to attract more liquidity to attract more liquidity into the Dex Etc now actually there's a very tangible way so this sounds like very abstract right so how do you get more you get the fact that you have more security doesn't mean you have more liquidity is a necessary but not sufficient however in the case of Bitcoin sticking there's actually a

very tangible way of of these chains getting liquidity and that liquidity is precisely because of a very recent development which is all these liquid sticking tokens on top of Babylon so Babylon provides the sticking light layer but what happened in the past six months is that several rather prominent projects have built liquid sticking protocol that is they stick on Babylon but at the same time they Min an asset so now that Min asset could appear on the osmosis chain so now osmosis is getting both security from Bitcoin taking and also liquidity from the

LST and now you get both liquidity and security and not to proportion each other and that would increase the economic activity of Osmosis yeah I I agree I think that's really where you have a very big unlock right because I think if you can tell a chain like cosmosis look you're going to get additional Bitcoin security but also Bitcoin liquidity right and now you know in addition to whatever a billion dollars worth of bitcoin security you get like as maybe a few hundred million or something in you know Bitcoin liquidity and you can have like really liquid uh Bitcoin markets on there I think that's where it starts to become like really

attractive is is this the case then because the security can be used on on different chains at the same time right uh but the liquidity that can only go to one place is that right or correct liquidity go to one place security can be shared um and that's really up to the users so the user takes the one Bitcoin right in the example BR that you had one Bitcoin the user can say Okay I want this one Bitcoin to only secure osmosis or it can take this one bitco and do what we call multi

scking or resticking which is to stick multiple chains that's an option entirely from the stickers pers perspective the liquidity is directed to one particular CH correct so when the user says Hey I want to secure multiple chains uh and and basically restake the Bitcoin or or stake multi-stake the Bitcoin then uh would this also involve some changes on the Bitcoin side uh like some additional transactions or that happens purely through the activity of the finality provider that the users stes

the Bitcoin with uh everything should everything should be uh reflected on the Bitcoin chain right because the Bitcoin chain is the final abure of what happens to the steak because the steak always sits on the Bitcoin chain now if you remember I said that the sticking uh SP has has a thing called spending condition for slashing okay so if you have if you decide to stick only on osmosis then you would only have one slashing condition associate with the finale provider on osmosis but if you decide to stick on Two Chains osmosis and I don't know

Cosmos uh Hub then you will have two slashing conditions one associate with a finan provider on osmosis and one associate with a finan provider on Cosmos hump so that's how it's reflected on bitcoin through having more slashing conditions and in the scenario of a slashing actually happening is the Bitcoin basically burnt yes not the entire Bitcoin but a fraction of the Bitcoin this is this is where I'm I'm not clear um maybe you can elaborate here so a as

a as a Staker so if I'm holding Bitcoin and I want to stake my Bitcoin with Babylon the Bitcoin you you said earlier that there's no requirement to send that Bitcoin to a third party address um so because it's self- custodial uh how would those slashing conditions be applied then is self custodial but the slashing condition is associate with the fnatic provider that you chose okay so uh maybe think of a typical example in uh coso's chain there's a notion called delegation right you delegate your stick to a particular validator like uh know coso station

so in some sense the Staker is trusting Cosmo station to do the right thing it would not double spend and get the stickers Bitcoin or not Bitcoin that case maybe osmo sticked a slash so the same delegation is happening here in our design for Bitcoin sticking as well and of course you can always run your own fin provider if you don't trust anyone else to do the right job and indeed there are stickers that are running their own finan provider right now no because they have so much Stak they don't want more trust anyone else they run own for provider right okay so what basically you're saying is that the staking rewards uh are off for slashing but not

the original like collateral or like de delegated tokens no no no no no no that that's not true that's not true so okay let me let me let me make sure the contract okay the sticking contract is that your stick is except only the condition except only the condition that the finale provided you delegate two double SIDS okay that's the contract if it double signs you will lose a fraction of just St and that fraction is a parameter also part of the contract so that's the promise that's the calization of your

Capital so let's talk a little bit about the Babylon chain right because Babylon also um is launching a cosmos chain The Babylon chain which is going to have uh its own uh staking token what's the relationship between you the Bitcoin staking and the babyon chain and then these Bitcoin secured networks okay so yeah so the babon chain uh is playing a multiple roles here so first of all Babylon chain will be the first Bitcoin secure network it's like our dog food uh Bitcoin secureity Network that we build

ourselves so that will be launched in phase two of the project after phase one the current phase one is finished so that's the one number one row now the second row is when other bsns come online which is our phase three then the Bitcoin secure then the Babylon chain will act as a coordination layer coordination layer between Bitcoin and all these other BSS because if you think about it our system is actually the whole brador protocol is a interchange system because it involves multiple blockchains the

stick is sitting on bitcoin but the finan providers are in on the BSS so to make this whole system works it requires a coordination between Bitcoin and each of these other chains and so the uh babon chain serves as a middle layer a coordination layer to make that coordination work efficiently so to give example you mentioned time stamping earlier time stamping earlier and it turns out that for for this protocol to work we need also timestamping between Bitcoin and each of the

bsns and the role of the babyon chain in this case is to help with this time stamping because BAU itself time stamps to bitcoin and this time stamping is very important because you need to synchronize the timing between a BSN and Bitcoin so that for example when you unlock when you unbond a stick then the Bitcoin the valid the finan provider voting power can be removed immediately on the BSN so a Time coordination is very important in this uh interchain

system right and then the nice thing is that because the Babylon chain is a proof of stake chain so it can have very fast blocks so you can have this time stamp in kind of you know in sync with the speed of all of these chains for Babylon chain and then that basically uh sort of you know Aggregates and time stamps that to bitcoin sort of on the like running a little bit behind but uh you know still providing like you know high high degree of security exactly the aggregation that you mention is the most important one of the most important thing because imagine a world where there are hundreds of these dsns if each of these chains have

to directly build their own infrastructure to time stamp to bitcoin it's just not a scalable solution to have so many time stamps on the Bitcoin chain and so Babylon chain serves as this aggregation row so that you only need one time stamp even though you have hundreds of bsns these liquid staking uh tokens do you imagine that in the future they will mostly also be issued on the Babalon chain or could they be issued in many different places yeah so yes we are hoping to encourage folks to issue their lsts on the Babylon chain first and then move that liquidity to

other chains as needed so that would be good so we would like to sort of build our next generation of Technology would be some infrastructure to support to do that in a trust minimizer way so like taking a step back here um there's been I find this like quite quite surprising actually but uh you know when I was at um proof Stakes um s Summit just recently and there were there were people there talking about Bitcoin moving to proof of stake and like for someone who's been in the space for so long I think like maybe to a lot of people that just seems like a very you know unlikely sort of scenario but you know at this

point how how do you think about that idea and like what is the likelihood that in sometime what would that look like you know Bitcoin moving to proof a sake yeah so um just to clarify right our research Pro our our project Babylon is not advocating to turn Bitcoin into a approval State chain I our goal right now is to take this Bitcoin asset to make it as useful as we can and the use case we're focusing on is used as a saking asset to bootstrap or to improve the liquidity and security of other blockchains so that's the that's the focus of the

project now in the distant future we it happens that this idea is so s so so successful so much other the blockchain so much of the entire crypto ecosystem is building on this Bitcoin decky then at some point bitcoiners may say hey maybe we can also use this security to secure ourselves to improve the Bitcoin security if that day happens then it happens if it doesn't happen it doesn't happen so one thing one thing interesting about um the evolution of crypto is that bitcoiners often said that all other blockchains are test nets

for Bitcoin okay so what does that mean that means that hey if you have a New Concept you want to test it on other blockchains before you bring it back to bitcoin and some sense Bitcoin sticking is kind of a an example of that thinking right because hey sticking has been proved to be rather success though in these proof of s blockchains now we're bringing part of that idea back to bitcoin and say hey why don't we use Bitcoin also as a sticking asset for these other blockchains so in some we go in that direction and maybe at one point people would think who this proof of stick idea of using Bitcoin is so powerful that maybe we can use Bitcoin the asset to

increase the security of Bitcoin chain itself that's a long way off though I think yeah I I feel like it's a long way off as well if if it were to happen um but uh yeah I find it like uh sort of interesting that people are actually bringing this up as like as a possibility where you know if you have said this maybe three four years ago it would have been no no one was ever considering uh Bitcoin to move to BR stake and now it's actually actually being talked about um I I think one of the things that's interesting here about Babylon and like generally Bitcoin l2s is that it it allows Bitcoin liquidity to move into Defi and be better utilized in defi well there's a whole array of

chains that um also would fall in this Cate category many of the top 20 chains chains like Litecoin xrp um cardono uh Dogecoin uh these these so-called dinosaur chains right where a lot of the liquidity is being held in wallets or on sexas and not really being utilized in def5 very much now over the last couple of months there's been more and more conversation about allowing that liquidity to more easily flow into defi protocols um what is your take on expanding uh you know Bitcoin liquid Bitcoin uh reaking to other chains

perhaps other proof of work chains you know some script chains or or other chains like the ones I mentioned um so that we can grow liquidity in defi using the liquidity that's already on chain yeah I mean I could see the concept that uh uh the protoc code that we came up with can be adapted to apply on other particular proof of work chains which use similar scripting language as Bitcoin yes uh I'm quite sure there are projects probably working on that right now uh our focus is entirely on bitcoin Bitcoin so Bitcoin is a huge enough asset that if we incre if we get 1% of Bitcoin is

already uh quite significant accomplishment so we just focus laser focus on bitcoin so we talked earlier a little bit about you know some of the efforts to have uh you know some upgrades for Covenant more opat more expressivity um now the way you guys are building right you're not relying on that but you you're building basically on bitcoin as it is but if some of those things were to happen would this change Babylon or would this kind of bring I don't know some new features or is it something where you kind of feel like no

we can make do with the way it is right now and it doesn't really matter yeah so um our technology is um entirely independent of soft Fork right so that was our philosophy I mentioned uh so we do not assume soft fork and our technology doesn't assume that now if there is a softw like um passing some kind of Covenant opat or something similar uh then yes uh that would make us to be able to do more things and in a cheaper way so right now um a lot of the ideas around bid VM is

basically to get around this Covenant issue uh the con the consequence though is that um there are some costs associated with that so the transaction fees tends to be a little bit high and so that could be reduced so I think to me is mainly a question of efficiency that you can do it at a lower cost you can do more things at a lower cost but for us right now the Bitcoin sticking core primitive is already very low cost and uh without this softw so the Babylon ecosystem has really you know grown tremendously I think over the past year or so there's a

lot of projects you know you mentioned liquid staking assets are being built on top of Babylon a lot of things happening what are the most interesting and exciting things being built yeah so a lot of the um Innovations right now is really try to figure out how uh to sort of couple or add liquidity to the base layer of sticking and I think that's sort of where we try to provide a lot of support as the base sticking protocol so what are the timelines here um you mentioned you know phase one

phase two phase three um yeah how do you see on what time frame D is rolling out yeah we're shooting for right now we're in phase one we have opened the cap three times cap one cap two cap three and right now it's closed we have about um 57,000 Bitcoin 57,000 Bitcoin staked on the Babylon protocol uh and uh phase two we are shooting for roughly in of q1 beginning of Q2 time frame to launch the babyon

chain that's our phase two and in phase three which hopefully will happen maybe a quarter after that uh is we will have a bunch of initial cohort of bsns uh Bitcoin secure networks to uh complete the uh entire picture so that's the face Lodge cool well thank you so much for coming on David it's really great to you know to hear your overview and it's super exciting I think as as you know as a long-term Bitcoin holder who's helped Bitcoin for a long time and always been like oh it would be great to do

something with it I think it's super exciting and of course as someone you know Sebastian as well as me you know play deep in the cosmos ecosystem is it's amazing that here those two things come together and we've now seen such a vibrant ecosystem emerging around Babylon so super excited to see how these phases roll out and uh yeah how it's going to play out in the next years so thank you so much for your work and thanks so much for joining us today great being here great conversation Brian and Sebastian thank you very much thank you