A software flaw in the Babylon Bitcoin staking protocol could allow malicious validators to disrupt the network’s consensus process, potentially slowing block production. The bug affects Babylon’s BLS vote extension, allowing validators to omit the block hash field, leading to consensus issues. If exploited, it could crash other validators during key checks at epoch boundaries.

Babylon, a significant opportunity for Bitcoin-based DeFi, introduces Bitcoin-native staking for the first time in crypto history. BTCFi aims to bring DeFi capabilities to Bitcoin, enabled by the Runes protocol during the 2024 Bitcoin halving. Babylon recently received $15 million in funding from a16z Crypto to support Bitcoin-native DeFi infrastructure.

Babylon partners with Aave Labs to bring Bitcoin-backed lending to Aave v4, allowing BTC to be used as collateral without custodians. The joint launch is set for April 2026 after testing in the first quarter. This collaboration expands Bitcoin’s yield-bearing capabilities in the DeFi space, revolutionizing decentralized finance.

Read more at Cointelegraph: Babylon Code Vulnerability Risks Block Production Slowdown