7 months ago
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Babylon’s Bitcoin Staking Protocol enables PoS chains to access staking capital from Bitcoin, eliminating the requirement for their native tokens. With Babylon, Bitcoin holders can earn yields directly, without third-party custody, bridges, or wrapping services.
On Tuesday, February 27, Binance Labs, the incubation arm of crypto exchange Binance, announced its investment into Bitcoin staking protocol Babylon. Babylon introduces a Bitcoin staking protocol enabling BTC holders to stake their coins on proof-of-stake blockchains, earning rewards in the process.
This protocol aims to transform BTC into a staking asset on PoS networks, leveraging its security to enhance the safety of PoS chains. Presently, PoS chains typically depend on their native tokens for security, a costly endeavor, particularly for newer chains that frequently require enticingly high staking rewards to attract capital.
The Bitcoin Staking Protocol by Babylon offers PoS chains a means to obtain staking capital from the world’s largest crypto asset, bypassing the need for their native tokens. This approach helps alleviate the inflationary pressure on PoS chains while introducing new utility for their tokens. Furthermore, despite Bitcoin’s trillion-dollar market cap, it has largely functioned as a passive store of value with limited utility.
Bitcoin holders using Babylon can earn yields directly without the need for third-party custody, bridge solutions, or wrapping services. It offers robust slashable economic security guarantees to PoS chains, ensuring their integrity. Besides, it also facilitates efficient stake unbonding to improve liquidity for Bitcoin holders. Speaking on the development, Yi He, Co-Founder of Binance and Head of Binance Labs, said:
“Bitcoin staking introduces a crucial new use case for the industry, marking a significant stride in the integration of Bitcoin with the Proof-of-Stake economy. Binance Labs’ investment in Babylon represents our commitment to supporting innovative projects leading the Bitcoin narrative and advancing its use cases.”
Babylon’s PoS Platform
Built atop the Cosmos SDK, the Babylon chain offers Bitcoin timestamping services to PoS chains while serving as a control plane for synchronizing the Bitcoin network with PoS chains. It oversees BTC staking, participates in finality rounds, and monitors validator staking data. Thus, it serves as a bridge between Bitcoin’s PoW ecosystem and PoS chains.
“The Bitcoin staking protocol unifies the entire blockchain industry, from Bitcoin to the PoS world. We are thrilled to have the support of Binance Labs in building such a broad-based Babylon ecosystem,” commented David Tse, Co-Founder of Babylon.
Binance Labs hasn’t disclosed the amount invested in the Babylon protocol. This investment aligns with Binance Labs’ growing emphasis on supporting startups in the staking and restaking sectors. In recent weeks, Binance Labs has also backed Renzo and Puffer Finance, both of which have quickly emerged as leading Ethereum liquid restaking protocols, ranking second and fourth, respectively, according to DeFiLlama data.
