Babylon Labs Introduces Native Bitcoin Collateral for DeFi Financial Transactions

Babylon Labs, a pioneer in Bitcoin infrastructure, announced a proof-of-concept aimed at enabling the use of native Bitcoin as collateral for asset borrowing on the Ethereum platform.

David Tse, co-founder of Babylon Labs and a professor at Stanford University, stated on Wednesday that they have established a system that allows Bitcoin to be used “trustlessly” as collateral for loans on Ethereum.

This assertion follows the release of a white paper detailing a vault system designed to manage Bitcoin in a trustless manner. The system utilizes Bitcoin’s smart contract verification known as BitVM3, facilitating user-specific vaults where Bitcoin deposits are managed. Withdrawals are conducted based on proofs verified on Bitcoin’s smart contracts.

This innovative mechanism represents a way for users to secure their Bitcoin without needing a custodian or bridging protocol.

A schematic of the Bitcoin vault-based lending system. Source: Babylon Labs

BNB Chain Experiences Surge in User Engagement

On Monday, BNB Chain recorded an unprecedented level of user activity, with active addresses reaching 3.46 million, exceeding its prior record from December 2023.

Nansen’s data revealed a striking growth in successful transactions on BNB Chain, totaling 500 million in the past month—a 151% increase over the previous 30-day period. Currently, this positions BNB Chain as the second highest in transaction volume, following Solana.

Regarding wallet activity, BNB Chain placed third, nearing 200 million active addresses during this period, almost enabling it to surpass the layer-2 network known as Base.

Addresses that sent a transaction on BNB Chain. Source: Nansen

Hyperliquid Introduces New Perpetual Futures Deployment

Decentralized exchange Hyperliquid has rolled out a new feature allowing users to create their own perpetual futures on the platform.

Under Hyperliquid Improvement Proposal 3 (HIP-3), individuals can launch perpetual swap contracts without prior authorization. Staking 500,000 HYPE tokens—approximately valued at $20 million—grants the ability to create contracts with specific settings.

Contract deployers will define the associated fees and manage market parameters, including price oracles and leverage conditions.

Discord message announcing the upgrade. Source: Hyperliquid

Uniswap Extends Support for Solana

Uniswap has announced the integration of Solana support into its web application, allowing users to interact with Solana-based tokens alongside those on other networks.

The DEX is exploring functionalities like bridging and cross-chain swaps, with transactions routed through the DEX aggregator, Jupiter.

Danny Daniil, Uniswap’s trading engineering lead, shared that this integration was not solely aimed at Solana but was designed to be platform-neutral, enhancing trading power overall.

Source: Uniswap Labs

Weekly DeFi Market Overview

Recent metrics from Cointelegraph Markets Pro and TradingView indicated that most of the leading 100 cryptocurrencies experienced a decline this week.

A token dubbed BNB Attestation Service (BAS) stood out with a 456% increase, marking the biggest growth over the week and achieving a new all-time high. Nockchain (NOCK) closely followed with a 379% rise.

Total value locked in DeFi. Source: DefiLlama

Thank you for reading this week’s highlights on impactful developments in DeFi. We look forward to sharing more insights next Friday.