Babylon Records $1.26B BTC Unstaking Event, TVL Drops 32%

Babylon, a platform enabling native Bitcoin (BTC) staking, recorded a notable unstaking event on April 17. Approximately $1.26 billion worth of BTC was withdrawn from the protocol.

Babylon, a platform facilitating native Bitcoin (BTC) staking, experienced a substantial unstaking event on April 17, as reported by Lookonchain. Approximately 14,929 BTC, valued at $1.26 billion, were withdrawn from the protocol.

This move had a significant impact on Babylon’s total value locked (TVL), leading to a 32% drop. The price of BABY, Babylon’s native token, also dipped by 9.8% in the past day, currently trading at $0.8.

Babylon’s TVL Drops 32% After Massive BTC Unstaking

Blockchain analytics firm Lookonchain highlighted the unstaking event on X (formerly Twitter).

“About 5 hours ago, 14,929 BTC($1.26 billion) was unstaked from Babylon.”

This triggered a sharp drop in the platform’s TVL. According to data from DefiLama, Babylon’s TVL dropped from $3.9 billion to $2.6 billion in just a day.

Moreover, only 31,502 BTC remain staked in the protocol at press time.

This move also affected the BABY token, which is not new to market pressures. According to BeInCrypto data, the token depreciated by 9.8% over the past day alone. At the time of writing, the altcoin was trading at $0.8.

The unstaking led to widespread speculation about the platform’s stability and the broader implications for Bitcoin-based decentralized finance (DeFi) protocols.

“What’s going on. I don’t waste my time partaking in staking BTC, but this can be concerning. You don’t just see so much unstaking in such a short window,” a user said.

Nonetheless, Lombard Finance quickly moved to calm investor concerns. The Bitcoin restaking protocol, built on Babylon, clarified that the withdrawal was part of a planned transition to a new set of finality providers.

“To carry out the transition to our new set of Finality Providers, the Lombard Protocol has begun the process of unstaking BTC from the Lombard Finality Provider,” Lombard Finance stated.

The post emphasized that this process was a necessary step in the evolution of the platform. In addition, the company reassured investors that the withdrawn funds are expected to be restaked once the unbonding process concludes.

The unstaking event follows closely on the heels of Babylon’s airdrop earlier this month. 600 million BABY tokens—representing 6% of the token’s total supply—were distributed to early adopters, including Phase 1 stakers, Pioneer Pass NFT holders, and contributing developers.

Shortly after the airdrop, $21 million worth of Bitcoin was unstaked within 24 hours. This suggests a pattern of capital withdrawal that has intensified with the latest event.