Meet Babylon – the project is at the forefront of designing security protocols that leverage Bitcoin to secure the decentralized world. By harnessing Bitcoin’s capabilities as an asset, its PoW-secured timestamping server, and its unparalleled censorship-resistant block space, Babylon aims to create a more secure and Bitcoin-centric decentralized ecosystem.
To achieve this vision, Babylon has developed a suite of Bitcoin security-sharing protocols. Currently, it features two key protocols:
- Bitcoin timestamping, which provides succinct and verifiable timestamps for any data, such as PoS blockchains.
- Bitcoin staking, which allows Bitcoin to provide economic security to decentralized systems through trustless, self-custodian staking.
Babylon Chain’s core feature is its Shared Security Protocol, which securely integrates Bitcoin into other chains. This maintains Bitcoin’s robust security while protecting against potential PoS attacks. Babylon Chain extends Bitcoin’s functionality beyond a mere asset, making it a foundational element of decentralized security.
Babylon Chain’s expanding ecosystem includes integration with many projects, including Everstake. These partnerships highlight the protocol’s versatility and the broad relevance of its security model. Today, we will consider the main ones.
Liquid (Re)staking projects
Liquid (re)staking allows users to maintain liquidity while their assets are staked, providing flexibility and increased utility for staked assets. Let’s explore some of the standout projects in this space.
Bedrock
Bedrock offers a unique protocol enabling users to earn native rewards from Ethereum, Bitcoin, and DePIN. It provides instant liquidity and enhanced rewards through integration with DeFi, EigenLayer, Babylon and Bedrock Diamonds.
Solv
Solv is building an omni-chain liquidity and yield infrastructure designed to unlock the potential of DeFi and digital assets. Central to Solv’s offering is SolvBTC, a liquid yield token facilitating user engagement in the BTCFi ecosystem.
pStake
pStake, developed by Persistence, is a liquid staking protocol that unlocks the liquidity of staked assets, enabling users to maximize their asset utilization without sacrificing staking rewards.
Chakra
Chakra is a ZK-driven Bitcoin restaking protocol that establishes a secure Bitcoin Proof-of-Stake system. This protocol activates the liquidity of long-term held Bitcoin assets and provides decentralized services maintained by asset holders.
Lombard
Lombard is transforming Bitcoin’s role in DeFi with LBTC, a yield-bearing, cross-chain liquid Bitcoin backed 1:1 by BTC. LBTC allows Bitcoin holders to earn, stake, trade, and transfer their assets in DeFi, unlocking Bitcoin’s full potential across all chains and DeFi protocols.
Wallets and Custodians
Wallets and custodians are essential for securely storing and managing cryptocurrency assets. Here are some noteworthy options within the Babylon ecosystem.
Bitget Wallet
Bitget Wallet, formerly known as BitKeep, supports over 100 mainnets and 100+ DEXs, offering a comprehensive solution for managing various cryptocurrencies.
Tomo Wallet
Tomo Wallet is a multi-chain social wallet for BTC. It integrates Bitcoin into EVM, Solana, and Cosmos ecosystems, offering an intuitive interface, social login, and strong security for all users. Follow Tomo’s Twitter instructions to receive 0.0007 sBTC and stake on the Babylon website.
Read our overview of the Tomo wallet and step-by-step guide on how to stake Babylon’s sBTC via Tomo.
Cobo
Cobo is a leading provider of custody and wallet infrastructure that simplifies digital asset security and fosters blockchain innovation.
Ledger
Ledger offers a secure offline environment for storing private keys, providing users with peace of mind and complete control over their assets.
OneKey
OneKey is an easy solution for keeping and trading crypto assets and NFTs, as well as tracking account dynamics.
The Babylon ecosystem also includes other wallets that ensure convenience and security for storing cryptocurrencies, playing a key role in providing access to various DeFi protocols.
Babylon Staking
Babylon’s Bitcoin staking lets you stake your Bitcoin for PoS blockchains without needing third-party services. It secures PoS chains and allows quick unbonding to keep your Bitcoin liquid. The protocol is a modular plug-in compatible with various PoS systems and is a key part of building restaking protocols.
It is currently in the testnet phase. To date, they have launched several testnets, the most recent being Testnet-4 Cap 2 on June 5, 2024.
Security Features
- Full Slashable Security. If there’s a security breach, 1/3 of the Bitcoin stake can be slashed.
- Staker Protection. Your staked bitcoins are safe and withdrawable if you (or your validator) follow the protocol honestly.
- Liquidity. You can unbond your staked Bitcoin securely and quickly.
Everstake is a trusted validator by over 735K users across 70+ blockchain networks. Our mission is to make financial empowerment through staking accessible to everyone. With our deep expertise and dedication to decentralization, we help users achieve lasting financial growth and make informed staking decisions. Stake Babylon with us to support the network’s security.
Babylon also collaborate with other validators to ensure the reliability and security of the network, contributing to a stable and decentralized ecosystem.
How Babylon Staking Works
From a Bitcoin staker’s perspective, the Bitcoin staking protocol works as follows:
Staking Bitcoin. You send a staking transaction to lock your Bitcoin in a self-custody vault. It creates a UTXO with two conditions: a timelock for withdrawal and a one-time signature (EOTS) for burning if needed. If delegating, the EOTS goes to your validator.
Validation on PoS Chain: After confirming your staking transaction, you (or your validator) can start validating the PoS chain. There are two scenarios:
- You follow the protocol, earn yield, and can unbond by waiting for the timelock to expire or submitting an unbonding transaction.
- If you act maliciously, your EOTS key is exposed, allowing anyone to slash your Bitcoin. This penalty maintains system integrity.
As Finality providers, Everstake has the responsibility of guaranteeing the security and the finality of transactions on the PoS chain. Due to our active involvement with the Testnet, users can stake testnet Bitcoins with us but with certain caps. This gives the users a secure and convenient platform in which they can go through the staking process.
What is Bitcoin Layer 2s?
A blockchain network has two main parts: the execution layer and the consensus layer.
- Execution Layer. This handles transactions from users and sends the details to the consensus layer.
- Consensus Layer. This runs the consensus algorithm and hosts miners (on PoW) or validators (on PoS) to verify and approve transactions.
Bitcoin Layer 2s are off-chain environments that process transactions and then send the details to Bitcoin’s consensus layer. Although different projects might approach this differently, the core idea remains the same. They create connections with the Bitcoin network, conduct transactions and advanced operations in their own environment, and then settle these transactions on the Bitcoin network.
By submitting transactions for final settlement on the Bitcoin network, Bitcoin Layer 2 networks aim to achieve the same level of security and decentralization as the main Bitcoin blockchain. These Layer 2 solutions can use various technologies (like rollups) to be more efficient than the main network.
About Rollup Infrastructure
Babylon Chain utilizes rollup infrastructure to enhance its security protocols, particularly through its Bitcoin security-sharing protocols. By leveraging Bitcoin’s capabilities and integrating rollup solutions, Babylon Chain ensures a secure, scalable, and efficient environment for decentralized applications.
This makes Bitcoin not only a store of value but also a dynamic financial tool within the DeFi ecosystem.
FAQ
Will my bitcoins be bridged to other blockchains?
No, Babylon allows you to stake your bitcoins without bridging them to other blockchains while still providing full slashable security guarantees for the chain.
As a Bitcoin staker, do I need to run my own validator?
No, you can delegate your staking power to a trusted validator, similar to other PoS systems. The validator may charge a commission on your staking rewards. If the validator acts maliciously, your stake could be slashed. Running your own validator avoids the need for trust and commission, giving you full control over your stake and rewards.
Will all my staked bitcoins be burned if slashing occurs?
Not necessarily, as Babylon’s protocol supports partial slashing. This means that only a portion of the staked bitcoins will be slashed, depending on the parameters set by the protocol.
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