Babylon
Babylon allows Bitcoin holders to stake their BTC to secure PoS chains and earn rewards, trustlessly, and without bridging
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- Code reviewed by several experienced auditors; Coinspect, Zellic, and Cantina
- Public team promotes accountability
- No documented protocol hacks since launch
- Latest protocol version launched in 2024; maturity less than six months increases technical risk as smart contracts are less battle-tested
- Top 5% by total value locked reduces risk
- Core contracts are fully immutable
- No governance token and/or contracts are fully immutable
- This protocol is susceptible to risks related to staking a token to secure a network, such as slashing events
- The Babylon Bitcoin staking protocol allows Bitcoin holders to stake their Bitcoin for Proof-of-Stake (PoS) blockchains, without needing any third-party custody/bridge/wrapping.
What is Babylon
Babylon is a comprehensive suite of Bitcoin security-sharing protocols aimed at scaling Bitcoin’s utility in securing decentralized systems. It comprises two main protocols: Bitcoin timestamping and Bitcoin staking. The timestamping protocol enables the secure and verifiable recording of arbitrary data on the Bitcoin blockchain, enhancing the integrity and resistance of PoS blockchains against long-range attacks. The staking protocol allows Bitcoin holders to stake their BTC directly, providing economic security to PoS blockchains without the need for third-party custody or wrapped assets. By leveraging the Cosmos SDK and integrating various modules, Babylon facilitates a trustless and self-custodian staking process, enabling Bitcoin to actively participate in the decentralized finance ecosystem.
How Babylon makes money
Babylon generates revenue through several channels, including staking fees where a portion of the rewards earned by users is retained as a commission for providing the staking infrastructure and security services. Additionally, Babylon may charge fees for its timestamping services, allowing users or projects to submit data for secure and verifiable timestamping on the Bitcoin blockchain. Transaction fees from cross-chain interactions facilitated by Babylon’s modules, such as IBC relayers and checkpointing services, also contribute to the protocol’s revenue. Furthermore, Babylon could offer premium features or advanced security services to institutional clients and DeFi projects, diversifying its income streams and enhancing its financial sustainability.
How you make money on Babylon
As a user of Babylon, you can earn returns by staking your Bitcoin through the protocol’s secure staking mechanism. By locking your BTC, you contribute to the security of PoS blockchains and receive staking rewards in return. Delegating your staked BTC to trusted validators allows you to earn a portion of the rewards generated from securing the network without the need to run a validator yourself. Additionally, Babylon’s efficient unbonding periods and partial slashing mechanisms ensure that your staked assets remain liquid and secure, enabling you to maximize your returns while minimizing potential risks. Engaging with Babylon’s timestamping services can also enhance the security and reliability of the DeFi projects you participate in, potentially increasing the overall value and stability of your investments.