Babylon Labs joins forces with Fiamma to unlock Bitcoin DeFi

Babylon Labs and Fiamma, a Lightspeed Faction-backed platform focused on unlocking real-world assets on Bitcoin, are teaming up to advance a BTC-secured decentralized world.

Fiamma has secured a strategic investment from Babylon Labs to help bring this vision to market, according to a press release. 

As the two platforms look to boost a Bitcoin (BTC) -secured decentralized finance ecosystem, the key focus will be on bringing trust-minimized Bitcoin bridges to developers and blockchains. 

Babylon Labs and Fiamma plan to integrate zero-knowledge technology into Bitcoin through Fiamma’s BitVM2 protocol, unlocking new potential across Bitcoin’s 21 million supply.

The collaboration comes after Fiamma launched the testnet for its Bitcoin bridge in November 2024. The platform also unveiled a devnet for the first zero-knowledge verification layer for Bitcoin, utilizing BitVM2.

Meanwhile, Babylon Labs has built the largest Bitcoin staking protocol to date, with over 57,000 BTC staked so far. According to DeFiLlama, the Babylon protocol currently holds a total value locked of over $6 billion.

Babylon’s non-custodial platform allows users to stake their BTC to help secure proof-of-stake chains while earning additional rewards on their holdings. The integration with Fiamma’s trust-minimized bridge will further expand BTC’s utility within DeFi.

Fiamma’s expansion amid the growth of real-world applications on Bitcoin includes strategic partnerships with Hack VC, Castle Island Ventures-backed restaking platform Satlayer, and zero-knowledge virtual machine platform RISC Zero.