Babylon Sheds $1.3 Billion in TVL After Mass Bitcoin Unstaking

Hifi Tech India

The total value locked (TVL) in Babylon, a Bitcoin staking platform, plunged by a third on April 17 after $1.3 billion worth of BTC was unstaked from the platform. Data from DeFiLlama confirms that Babylon’s TVL dropped to $2.69 billion from just around $4 billion on Apr. 16

Its recently launched native token, BABY, is down by 14% in the past day, according to Coingecko data. While it’s normal for DeFi protocols to record outflows after their token airdrops have concluded, this is the largest single-day withdrawal since BABY launched last week.

Blockchain analyst Lookonchain broke the news in an April 17 X post, highlighting that several addresses had unstaked 14,929 BTC from Babylon, worth approximately $1.3 billion at current prices, in the late hours of April 16.

While the owners of the unstaking wallets are yet to be confirmed, the unstaking event appears to be connected to another Bitcoin staking protocol, Lombard Finance.

Babylon’s official X account retweeted Lombard Finance’s X post, which announced that it would begin unstaking BTC from its finality provider to transition into a new set as part of a protocol update.

“All of this BTC will be staked back into Babylon as soon as the unbonding is complete”, and that it had to time the unstaking “to align with the end of Babylon Phase 1 Cap 1 (April 24), such that users do not miss out on rewards,” Lombard said.