A newly disclosed software flaw in the bitcoin staking protocol Babylon could allow parts of the network’s consensus process to be disrupted, potentially slowing down block production during key periods, according to developers.
The vulnerability affects Babylon’s block signature scheme, called BLS Vote Extension, which is used to prove that legitimate actors have agreed to a block.
According to a GitHub post published Thursday, the bug enables blocks to intentionally omit the hash field when sending extensions of their votes, which can cause problems with validator consensus during remote network limitations.
The block hash field tells validators which blocks they are actually voting on during the consensus process, a field that allows bugs to be excluded.
As a vulnerability, a malicious validator could theoretically crash other verifiers during key consensus checks during remote bounds, leading to slower block production if multiple validators were affected.
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“Periodically the validator crashes at commit boundaries, which will slow down the establishment of commit boundaries,” wrote pseudonymous contributor groupilori55348, who discovered the vulnerability. “Babylon then injected this nil pointer into critical code paths related to consensus (specifically the validating view extension, and the proposed time vote validation), causing a runtime panic,” he added.
QuantalGraphs has reached out to Babylon for comment on the potential impact and resolution of the vulnerability, but did not receive a response by publication.
The issue is not described as actively exploitable, but the developers have warned that it could be exploited if left unaddressed.
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Babylon continues to expand its Bitcoin production capabilities
Babylon is seen as a major opportunity for bitcoin-based decentralized finance, thanks to the introduction of bitcoin-local staking for the first time in crypto history.
Bitcoin-Based Decentralized Finance (DEFI), also known as BTCFI, is a new technological paradigm that aims to bring DeFi capabilities to the world’s first blockchain network, enabled by the introduction of the RUNS protocol during the 2024 Bitcoin halt.
On Wednesday, Babylon received $15 million in funding from A16Z Crypto through the sale of Babylon’s native Baby (Baby) tokens.
In a blog post published on Wednesday, A16Z Crypto said the funding will support the continued development of a bitcoin-native DeFi infrastructure.
Earlier in December, Babel partnered with AAVE LABS to bring bitcoin-backed loans to AAVE V4, enabling BTC to be used as collateral without a wrapper or supervisors. It is expected to enter the testing phase in the first quarter of 2026, with a joint launch set for April 2026.
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