Another Innovation other than ETF to drive Bitcoin Value
Spot Bitcoin ETFs might enhance the liquidity of the bitcoin market by providing more buyers and sellers. More liquidity can lead to more stable prices and less volatility, making bitcoin more attractive to ordinary investors. Now what about the actual use of the circulating supply of Bitcoin to earn rewards.
We all know that at present the $600 billion crypto asset stored as Bitcoin are just been lock up in the wallet without actual use just like an asset.
There are hundreds of billions of dollars’ worth of Bitcoin that are largely idle today: Bitcoin holders don’t earn yield by holding the asset and, in contrast to proof-of-stake (PoS) chains like Ethereum, holding this capital isn’t necessary for the security of the protocol — Bitcoin is a proof-of-work chain.
As just announced at Cosmoverse, Babylon is putting this lazy Bitcoin to work!
Specifically, Babylon is making it possible for Bitcoin holders to stake their capital across different PoS chains.
This has a huge upside for holders: they can earn yield by staking their (otherwise idle) Bitcoin. And it has huge upsides for PoS chains. First, Bitcoin can provide the capital they need to secure the chain and support high TVL.
Second, because Bitcoin does not have yield, the inflation pressure (to pay staking rewards and thus) to acquire such capital is likely lower than acquiring the native token as stake.
Finally, because Bitcoin’s price is relatively stable, the cryptoeconomic security of PoS chains adopting Bitcoin staking (even during black swan events) will similarly be stable.
Read more here: https://www.babylonchain.io/