The Babylon platform offers a unique solution for Bitcoin holders, enabling them to benefit from staking without the need to transfer their assets or expose themselves to risks associated with external systems.
What is Babylon?
Babylon is a Layer 1 chain and infrastructure suite that facilitates Bitcoin staking as a service for PoS blockchains. Unlike conventional approaches, Babylon keeps Bitcoin on its native chain without requiring wrapping or bridging, allowing BTC to participate in PoS networks.
The Issue of Idle Bitcoin
Despite a market capitalization of over $600 billion, most Bitcoin remains idle. Key reasons include Bitcoin's Proof-of-Work architecture and the need for bridging, which increases third-party risks. Bitcoin is mainly used as a store of value, for payments, lending (with custody risks), and via bridges (involving smart contract risks).
Staking as Bitcoin's Third Native Use Case
Babylon positions staking as Bitcoin's third native use case, following holding and payments. This is achieved by keeping BTC in users' wallets, eliminating the need for bridges and wrapping, and employing Extractable One-Time Signatures (EOTS) for trustless slashing.
The new Babylon platform has the potential to significantly reshape Bitcoin usage by enabling staking and generating income without losing control over assets. This marks a step forward in the development of decentralized finance.
