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From "digital gold" to productive assets: How does Babylon reshape the value of Bitcoin with the BTCFi ecosystem?
Fisher Yu's ambition is simple: to make Bitcoin no longer a passive "digital gold", but a productive asset that can actively create value. Article Author: Lesley Source: MetaEra The year 2025, just past its midpoint, 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 also accelerating their allocations. According to statistics from bitcointreasuries.net, nearly 200 publicly traded companies and over a dozen 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 the focus of the market.
In January 2022, cryptographer and former Dolby Labs senior engineer Dr. Fisher Yu co-founded Babylon with Stanford University engineering professor, National Academy of Engineering member, and information theory expert Professor David Tse. What drove them to entrepreneurship was their deep insight into the industry landscape after the 2021 "DeFi Summer"—"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 reunification, 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 deeply analyze the technological innovations of Babylon and the changes it brings to the Bitcoin ecosystem. Babylon: Breaking the $2 Trillion "Productivity Paradox" Currently, the core pain point facing the Bitcoin ecosystem is: Bitcoin holders can only passively hold coins and cannot earn returns through staking or collateralization. "Now everyone is buying Bitcoin, public companies are buying Bitcoin, even sovereign countries are buying Bitcoin, institutions and retail investors are also buying Bitcoin. What happens after buying?" Fisher Yu used such a straightforward rhetorical question to express the core dilemma of the Bitcoin ecosystem.
The market value of Bitcoin has surpassed 2 trillion (source: Coingecko) This situation is almost unimaginable in the traditional asset management field. Fisher Yu explains: "If treasury assets are cash, they can be used to buy government bonds or fixed income securities to generate 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 do that—unlike Ethereum, it cannot be programmed, so it cannot do anything but sit there as a means of value storage." Fisher Yu defines this issue as the largest resource mismatch in the blockchain world: "Bitcoin, while being the largest blockchain asset, has not created a synergistic effect with other chains." How can Bitcoin upgrade from a mere "digital gold" to a "productive asset"? This is exactly the problem that Babylon is committed to solving. Currently, Babylon is primarily focused on solving two issues:
Trustless Bitcoin Vault Based on this challenge, Babylon recently launched a "trustless Bitcoin vault," which interacts with other DeFi protocols on-chain 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 operating like native DeFi collateral on multiple chains such as Ethereum and Cosmos. "This way, no one can steal your Bitcoin," explains Fisher Yu. Looking ahead, the roadmap for Babylon is divided into three phases:
Baby BTC Strategic Capital has signed a term sheet with NASDAQ-listed company ATA Creativity Global. Baby BTC Strategic Capital partner Gigi added that the strategic cooperation between ATA Creativity Global and Baby BTC Strategic Capital has built an innovative business model of "listed holding platform + token asset acquisition + staking ecological revenue," with specific details including: • Completed the holding structure reorganization with a $100 million investment from Baby BTC Strategic Capital; • Deeply bind the listed company platform with the Babylon ecosystem; • Focus on the layout of BTC staking income and BTCFi ecosystem construction; • Dynamically optimize the asset allocation ratio between Baby tokens and BTC. This cooperation model is highly consistent with Babylon's original intention. "Our team hopes to cooperate with listed companies to help them deploy and promote the 'advanced Bitcoin treasury strategy', rather than simply buying Bitcoin and hoarding it." Fisher Yu believes that the cooperation 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 listed companies design and implement more advanced Bitcoin treasury strategies." Fisher Yu pointed out that this cooperation model will provide great assistance to listed companies. "Currently, there are hundreds of listed companies with total assets exceeding 100 billion dollars that are buying Bitcoin, but they urgently need a secure, reliable solution without third-party custody risks to deploy these Bitcoins. Otherwise, these assets can only passively lie in the financial statements without generating additional value." The promotion logic of this model is clear: Babylon focuses on technological development and the growth of crypto-native users, while the expansion into traditional industries will be achieved through listed company platforms. "Babylon only focuses on the application landing in the coin circle, and the adoption in the Web2 field will be pushed forward by listed companies," Fisher Yu stated. The effect of industry reshaping - the mutual pursuit of 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 continue to arise. Fisher Yu clearly responded, stating that "he does not think that the large-scale entry of centralized institutions into the blockchain space violates the spirit of decentralization." He divides the centralization of the Bitcoin ecosystem into two dimensions: "Decentralization has two aspects. The first is that the maintainers of the chain are decentralized, and second, the broader the distribution of coin holders, the better." • From the perspective of chain maintainers, institutional participation has not changed the structure of blockchain operation. "There are now nearly two hundred companies buying Bitcoin, but the miners of Bitcoin are still the same ones as before." • From the distribution of holders, traditional capital has actually promoted the decentralization of holder distribution: "A listed company holds a coin, but in fact, this coin belongs to all its shareholders, not just an entity of the company. So, it can be said that the effective holders of Bitcoin are increasing." Fisher Yu believes that Bitcoin's move towards the mainstream is a natural evolution: "Bitcoin will definitely be gradually recognized and adopted by the mainstream world." He emphasized that this process is not something the crypto industry actively fought for, but rather the mainstream world took the initiative to approach. "The Bitcoin system is truly decentralized, without a foundation or operator promoting its popularity. It is the mainstream that actively recognizes and accepts Bitcoin." Once the mainstream world understands the concept of decentralization through Bitcoin, its attitude becomes more open and inclusive, "and coincidentally, the crypto circle also wants to break the circle, thus forming this situation of mutual engagement." Gigi, a Partner at Baby BTC Strategic Capital, also clarified the historical mission of the ATA collaboration 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 provide the mainstream world with more surprises through comprehensive solutions. Summary: The moment of value release in 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 the "digital gold" that lies flat, but a productive asset that can actively create value. The influx of traditional capital is not accidental. Starting from the strategic cooperation between Babylon and publicly listed companies, these companies are shifting from merely "buying and holding 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 is instead spread more widely. From Satoshi Nakamoto's white paper to today's thriving ecosystem, Bitcoin has taken sixteen years to prove the possibilities of decentralized finance. And now, it is ushering in the next sixteen years—from value storage to value creation, from edge revolution to mainstream infrastructure. This is not only a victory of technology but also a legacy of ideology.