Babylon Labs experienced a significant decline in its total value locked (TVL), plunging by 32% after wallets unstaked $1.26 billion worth of Bitcoin. An analytics firm, Lookonchain, noted several addresses involved in the unstaking of 14,929 Bitcoin, with one address holding $1.1 billion of the total. This caused Babylon's TVL to decrease from $3.97 billion to $2.68 billion. The unstaking coincided with Lombard Finance's announcement of a transition to new finality providers. Lombard clarified that this move is strategic and that all unstaked BTC would be re-staked back into Babylon once the unbonding process is completed. Community speculation about the entity behind the unstaking identified various theories, including the possibility of it being the Chinese government or a routine market behavior. This massive unstaking follows Babylon's recent airdrop announcement, leading to $21 million in BTC being unstaked shortly thereafter, as users sought early redemption. Babylon remains a significant player in Bitcoin DeFi, with notable historical TVL peaks.

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