Babylon is a leading project in the Bitcoin ecosystem and the largest Staking infrastructure for Bitcoin. It will unlock the profit value of 21 million Bitcoins and expand the security of Bitcoin to protect more POS decentralized worlds.
Binance holds a large stake in Babylon!
The well-known Binance Labs team can be said to be a guiding light for first-tier projects. If we talk about which VC institution has the most money-making effect in the crypto market, it must be Binance Labs.
From the analysis of Binance’s new projects in the past, we found that as long as Binance Labs has invested in and incubated projects, there is a high probability that they will be launched on the Binance platform for the first time. And as long as more than 90% of the projects participated in have achieved significant space, and this time they are heavily investing in Babylon, can't you tell what the intention is?
Babylon Unlocks the Value of Bitcoin Staking and Security
BTC’s current market value exceeds $1.24 trillion, but its value has not been unlocked for a long time due to problems such as Bitcoin’s lack of support for smart contracts and difficulty in scaling. Babylon proposes a new way to scale Bitcoin, which extracts security from the Bitcoin chain and shares it with various Proof of Stake (PoS) chains, such as Cosmos, Binance Smart Chain, Polkadot, Polygon, etc., thereby bringing yields to BTC’s Staking providers while ensuring the security of the POS chain.
Babylon's vision is to extend the security of Bitcoin to protect the decentralized world. By leveraging three aspects of Bitcoin - its timestamping service, block space, and asset value - Babylon is able to deliver Bitcoin's security to numerous Proof of Stake (PoS) chains, creating a more powerful, unified ecosystem.
Babylon's Bitcoin staking protocol uses a remote staking method to overcome the lack of smart contracts through cryptography, consensus protocol innovation and optimized use of the Bitcoin scripting language. Babylon's staking protocol allows Bitcoin holders to trustably stake Bitcoin without bridging to the PoS chain and provides complete slashable security guarantees for the chain. Babylon's innovative protocol eliminates the need for bridging, packaging, and hosting of staked Bitcoin.
Babylon’s Trustless Staking Mechanism
Babylon enables users to securely stake without transferring Bitcoin out of their own addresses.
Bitcoin holders can keep their Bitcoin in their own self-custody vaults. Funds can only be withdrawn from the vault in two circumstances:
1. Unlock: Stakers can use their private keys to retrieve their stake.
2. Default: If the pledger violates the agreement, the funds will be automatically liquidated and deducted from the vault.
In both cases, there is no third party involved and there is no other way to spend from the vault.
Babylon is designed to implement a Staking and Slashing technology mechanism that does not involve a third party. First, Babylon's Staking mechanism is implemented by locking Bitcoin on the Bitcoin chain (the address is called the "Staking address") instead of transferring it to the PoS chain. The Bitcoin on this address will be locked for verification on the PoS chain. During the verification process, the Bitcoin on the Staking address will be considered "collateral" to ensure the honest behavior of the validator. If the validator violates the rules, their collateral will be cut. This means that Bitcoin holders can obtain the benefits of the PoS chain without exposing their assets to the PoS chain.
Secondly, Babylon's Slash technology mechanism is implemented by using advanced cryptography, consensus protocol innovations, and optimized Bitcoin scripting languages. Specifically, Babylon uses a technology called "accountable assertions," which allows penalties to be sent back to the Bitcoin chain and slashing operations to be performed on the Bitcoin chain after violations are found on the PoS chain. This design avoids the risks and complexity of involving a third party while maintaining security and reliability.
Finally, Babylon's system architecture is based on a three-layer structure, where the Babylon chain acts as a control plane, allowing interaction between Bitcoin and the data plane (i.e., the PoS chain). This design allows Babylon to achieve interoperability and network effects between the PoS chain and Bitcoin without involving a third party. For example, Babylon can resolve cross-PoS chain transactions based on the final state of the two PoS chains on the Babylon chain.
In summary, Babylon has achieved Staking and Slash technical mechanisms that do not involve a third party by using advanced cryptography, consensus protocol innovations, an optimized Bitcoin scripting language, and a three-layer system architecture.
Expanding Bitcoin’s application landscape
Business models can consider both vertical and horizontal aspects:
Vertically, it can empower the entire BTC ecosystem, such as BTC rollup or BTC middleware, so that Bitcoin can be used on the second layer and the middle layer;
Horizontally, BTC can be staked on different POS chains to expand the possibilities of BTC, allowing Bitcoin to generate income on other POS chains;
While expanding the application of Bitcoin, Babylon will capture the following value:
- Babylon will collect staker rewards from some of the pledgers
- The fees collected by Babylon will be shared between the node operator and Babylon's treasury
- More stakers can boost the value of Babylon tokens
Babylon's ultra-luxury investment institution
As of June 1, 2024, Babylon has disclosed multiple rounds of financing, with a total amount exceeding $96.8Million.
Looking at the Bitcoin ecosystem, from March 1, 2023 to May 31, 2024, the number of financings related to the Bitcoin ecosystem reached 143 times, with a total amount of more than $2.3 billion; among them, the number of financings after 2024 was 85, with a total amount of more than $945.3 million. Now compare it with the number of financings in other ecosystems during the same period. From March 1, 2023 to May 31, 2024, the number of financings related to the Ethereum ecosystem was 727 times, Solana 121 times, Cosmos 50 times, and Avalanche 82 times. It can be seen that the number of financings related to the Bitcoin ecosystem is relatively high, reflecting the optimism of some institutions and VCs about the Bitcoin ecosystem.
To sum up, Babylon will be the last top-tier project for Bitcoin staking!
Looking back at Ethereum's staking of Eigenlayer, there will be a huge contrast. The total amount of Eigen is as high as 1.67 billion, while the total amount of Babylon is only 100 million. At the same time, the current total valuation has exceeded 10 billion, how dazzling! And a simpler truth is that all the coins in the currency circle want to become Bitcoin, but they can never surpass it. Babylon, which is pledged by BTC, will not only detonate the BTC ecosystem, but will also give full play to the re-staking, and at the same time make itself intoxicated! The top stream that must be grasped!
