Babylon has already accumulated 24,000 BTC, with a TVL of up to 1.6 billion dollars.
As the counterpart to Ethereum, the most important project in the BTC Staking narrative—Babylon—has attracted significant market attention since the launch of its testnet. After two rounds of open staking quotas, Babylon's direct deposit addresses have exceeded 25,000, and the number of Bitcoins deposited has also surpassed 23,000.
No cross-chain, no fork Bitcoin staking mechanism
From Bitcoin to Uniswap, the history of blockchain development is essentially a self-evident history of lean protocols; great designs seem very simple.
Among them, the most noteworthy mechanism design of Babylon is its trustless original chain staking, which requires no asset cross-chain, anchoring, or any third-party custody, allowing for seamless BTC staking deployment directly on the existing Bitcoin network.
So how does it achieve original chain staking of Bitcoin without requiring an upgrade or fork of the Bitcoin network, and without needing a cross-chain bridge?
We need to clarify a premise first, which is that the security of the PoS network essentially comes from the confiscability of its staked assets: if the staker (or the validating node receiving its delegation) attacks the PoS network consensus in an attempt to fork it, their staked assets will be completely or partially confiscated.
The Bitcoin staking protocol of Babylon utilizes cryptographic technology to convert the actions of Bitcoin stakers attacking the PoS network consensus into the complete or partial confiscation of their staked Bitcoins in the Bitcoin network.
And this confiscation will only be triggered when an attack actually occurs, ensuring the absolute safety of honest stakers' assets; thus, Bitcoin can become a staking asset just like PoS native tokens without needing cross-chain.
Confiscation Mechanism
To some extent, we believe that Babylon has chosen a more difficult path, as only by implementing confiscation can a more sustainable protocol be built, making its income and network security 'less fictitious.' However, as we explained, Babylon's revenue generation system does not actually exist yet, so there is currently no confiscation, but there is still a redemption path in the Taproot tree. Therefore, the third redemption path in the Taproot tree has not yet been implemented because there is no blockchain or finality agent. Babylon's vision is that once the system goes live, stakers will need to pre-sign the path for confiscation redemption, which means Bitcoins will be transferred to an address controlled by others or may be destroyed. Who these funds may be sent to has not yet been determined by Babylon Labs. If the staker has pre-signed the third path, then there is a real counterparty risk. But while it remains unsigned, Bitcoin stakers can consider Babylon to be 'risk-free.'
After the confiscation mechanism goes live, if the third path has not been pre-signed by the staker, then the stake will not be considered valid and will not receive any rewards. We believe this is a small flaw because observers of the Bitcoin blockchain cannot determine whether it is a valid staked deposit. However, since this has not yet been launched, pre-signatures are not necessary. Therefore, **currently, Babylon, like CoreDAO, has no counterparty risk for staking. You can always retrieve your Bitcoins without relying on anyone (although the lock-up period is longer).** Thus, at present, this may be a good place to stake Bitcoin before the system goes live, although how many Babylon tokens you can obtain as a reward is uncertain.
Babylon brings the spring breeze of Staking to the Bitcoin ecosystem.
As Babylon brings the spring breeze of Staking to the Bitcoin ecosystem, it also promotes the construction of LST within its ecosystem. Driven by Babylon's pre-staking activities, the deposit amounts of major BTC LSTs have been continuously climbing, with over 20,000 Bitcoins currently participating in BTC LST deposits. Compared to over 3.5 billion dollars in scale for ETH LST, the BTC LST with about 1 billion dollars in deposits is still in its early stages.
After the two staking openings of Babylon, five LSTs—Bedrock, Lorenzo, PumpBTC, Solv, and Lombard—currently occupy nearly 85% of the Babylon staking pool.
Project Team and Roadmap
In terms of the project team, Babylon co-founder Professor David Tse has been dedicated to researching blockchain consensus models since his time at Stanford Labs, during which he was inspired by The Security Mesh model and gradually focused on Bitcoin-based secure sharing protocols, which is also the starting point of Babylon Chain.
Another co-founder, Fisher Yu, encountered decentralized systems and entrepreneurship during his PhD at the Australian National University, and later conducted systematic research on blockchain systems during his postdoctoral work at the University of Southern California. He is a major contributor to the highest-ranking algorithm in blockchain data availability, the coded Merkle tree, and the well-known outcome in blockchain scalability, Polyshard.
Babylon can be said to make a grand entrance, being the only mainstream project in the current market rally. The myth of the future market will surely be created again by excellent strategists who are entering the field!
