The goal of the creative project Babylon is to increase the security of Proof-of-Stake (PoS) blockchains by allowing Bitcoin owners to generate income by using their idle coins to support the financial stability of dApps and PoS chains.
Babylon makes Staking Bitcoin (BTC) to protect other blockchains and protocols possible, increasing Bitcoin’s usage in the decentralized economy without requiring the bridge, wrapping, pegging, or custody of staked Bitcoins.
Bitcoin’s three distinctive features—its timestamping service, backspace, and asset value—allow it to accomplish this. The project intends to provide security across several Proof of Stake (PoS) ecosystems, including Cosmos, Polygon, and Bitcoin Layer 2s.
Babylon’s Team and Funding
Co-founders David Tse and Fisher Yu are among the notable academics and important individuals on Babylon’s staff.
Babylon has received strong investment and support, indicating a high level of market trust in its novel strategy. In December 2023, for example, the project collected nearly $18 million from several well-known investors, including Polychain Capital, Hack VC, OKX Ventures, Polygon Ventures, and others.
This significant investment focuses on the development of Babylon’s Bitcoin staking protocol, which attempts to establish Bitcoin as a decentralized staking asset.
In the industry devoted to incorporating Bitcoin’s security into decentralized finance (DeFi), Babylon seems well-positioned with a robust staff and significant investment. Its distinctive staking mechanism seeks to increase Bitcoin’s usefulness and fortify the security of proof-of-work blockchains.
How Does Babylon Operate?
Bitcoin’s three distinct features—timestamping service, backspace, and asset value—allow it to protect Proof-of-Stake chains, as was previously discussed. The Bitcoin staking protocol, Bitcoin timestamping protocol, and Bitcoin data availability protocol are among the security-sharing protocols developed by Babylon based on these components.
Together, these protocols ensure that Bitcoin’s powerful characteristics improve the security and effectiveness of other Proof-of-Stake (PoS) networks.
Bitcoin Staking Protocol
By staking (and restaking) their Bitcoin, holders can use Babylon’s Bitcoin staking protocol on PoS chains, app chains, and apps to safeguard protocols and earn rewards. Unlike traditional staking methods, the protocol eliminates the need to wrap, bridge, or place staked Bitcoins in third-party custody. This provides a more secure and direct staking experience for Bitcoin holders.
The staking protocol has two roughly related purposes. The main benefit is that it uses Bitcoin staking to improve the security of Proof-of-Stake chains and applications. Furthermore, it provides incentives for Bitcoin owners to participate in Babylon’s security mechanism through awards.
It’s important to note that, according to the Babylon staking mechanism, Bitcoin deposits are “as safe as they can be.” For example, staked Bitcoins remain secure and withdrawable as long as users follow the protocol’s guidelines and avoid attacking the PoS chains. This ensures the safety of their assets while participating in the staking process.
Furthermore, Babylon asserts that because it uses the Bitcoin timestamping mechanism, which synchronizes Bitcoin with the PoS chains, the unbinding of the staked asset is often secure and quick without the requirement for social agreement.
The Proof-of-Stake chains that are compatible with the BTC staking protocol are built as modular plug-ins. Babylon wants to make Bitcoin more useful than just a store of currency or a means of trade by incorporating its strong security into these other blockchains.
Bitcoin Timestamping Protocol
Another essential part of Babylon is the Bitcoin timestamping mechanism. This protocol functions by timestamping events from other blockchains into the Bitcoin network, using Bitcoin’s security as a timestamping server. In essence, it enables Bitcoin timestamps to be obtained from any random data supplied to Babylon.
The protocol also helps to strengthen the integrity and security of PoS networks. With BTC timestamps, no one will ever select the attacking fork’s later BTC timestamp during a fork choice.
By synchronizing Bitcoin and the PoS blockchains, it acts as the foundation for the staking protocol in the interim. Because Bitcoin timestamps are objective, this also eliminates the requirement for social consensus.
Additionally, the timestamping protocol makes it easier to establish composable trust, quick stake unbinding, lower security costs, and cross-chain security, as well as bootstrap new chains. It does this by fusing the long-range security of Bitcoin Proof-of-Work with the short-range security of Proof-of-Stake networks.
Conclusion
Through smart agreements with a number of well-known blockchain projects, Babylon has built a strong ecosystem. Babylon is expanding its position in the decentralized financial industry and fortifying its ecosystem through strategic alliances like those with Lombard and Akash Network. These collaborations are centered on a common vision for a more efficient and safe decentralized future rather than just the technology itself.
