Alexander Blume, CEO of Two Prime, says that rewards offered by Bitcoin layer-2 protocols such as Babylon and Stacks are largely venture-capital-funded subsidies whose yields decline as deposits increase. Babylon had roughly 40,800 BTC staked, worth about $3.28 billion, while its BABY token was experiencing 5.5% inflation in November 2026. Blume argues that chasing higher returns pushes investors toward newer chains, adding smart-contract, bridge and hacking risks. As an alternative, Two Prime offers a WBTC yield vault targeting annual returns of 1.5% to 2%, backed by roughly $10 million to $12 million in first-loss capital and funded through borrower interest rather than token emissions.
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