Alexander Blume, CEO of Two Prime, argues that Bitcoin layer-2 rewards are often unsustainable subsidies funded by venture capital. As more capital enters these networks, the incentive pool is diluted, leading to lower yields for individual depositors.
Data from November 4, 2026, shows Babylon held approximately 40,800 BTC, valued at $3.28 billion. Blume notes that relying on token inflation to pay rewards creates risks related to token valuation and market volatility.
Blume warns that yield-seeking behavior pushes users toward newer, less established chains. These networks introduce additional security risks, including potential vulnerabilities in bridges, smart contracts, and validator sets.
In September 2026, Two Prime launched the Axiom WBTC Yield Vault, which targets annual returns of 1.5–2% paid in WBTC. The firm states these returns are generated from borrower interest rather than token emissions.
The Axiom vault is supported by $10–12 million in first-loss capital to protect depositors. As of early November 2026, the vault held 150 WBTC, worth approximately $11.6 million, with a net APY of 1.61%.
Two Prime reports having originated over $4 billion in Bitcoin-backed loans since 2022 with no defaults. The company aims to attract capital that prefers steady, borrower-backed returns over incentive-driven yields.
