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Two Prime CEO Calls Bitcoin Yields From Babylon and Stacks ‘VC-Funded Subsidies’
Alexander Blume said the rewards that Babylon and Stacks offered bitcoin holders pay out less as deposits grow, and pointed to a vault Two Prime runs on Pareto that lends to borrowers offchain.
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Two Prime's chief executive, Alexander S. Blume, told Unchained Premium in an October 22 interview that yields tied to bitcoin layer-2 projects like Babylon and Stacks amount to subsidies funded by venture capital. He contended that as deposits grow, each depositor receives less, and that depositors end up hunting for fresh returns once incentives fade, exposing themselves to new technology and hacking risks. Regarding Stacks, he admitted limited familiarity and said holders might receive Stacks tokens or bitcoin for keeping BTC deposited. Babylon's documentation says BTC stakers and BABY stakers both earn BABY, with 5.5% annual inflation. DefiLlama data showed about 40,800 BTC, roughly $3.28 billion, staked there as of Nov. 4. Two Prime put a wrapped bitcoin vault on Pareto live in September, lending offchain to vetted borrowers.
Why it matters: It bears on whether bitcoin layer-2 yields rest on temporary incentives, a question depositors weigh when judging these products.
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