TL;DR
- Babylon launches Bitcoin staking on its mainnet in three phases, starting with the Bitcoin locking phase.
- The first phase allows users to lock their bitcoins in a secure script, preparing them to participate in PoS consensus validation.
- A points system is introduced to measure stakers’ activity, with no direct rewards during this phase.
Babylon has taken a major step forward in integrating Bitcoin with proof-of-stake (PoS) systems by launching the first phase of its staking protocol on the mainnet.
This initiative allows Bitcoin holders to connect with the growing security demands of PoS systems such as blockchains, L2 layers, oracles, and more, without the need for trusted intermediaries.
🔶🔒 Countdown to Babylon Bitcoin Staking Mainnet launch has begun!
🔑 Self-custodial Bitcoin Staking
🛡️ Bitcoin security for PoS Systems
⚡ On-demand Unbonding
💎 Leverages $1T+ idle Bitcoin Capital📖 Read the announcement: https://t.co/awTMV1c5Q6
🔒 Staking Dashboard:… pic.twitter.com/TItPoUbLv2
— Babylon (@babylonlabs_io) August 19, 2024
The protocol will be rolled out in three phases, each bringing new functionality and opportunities for users.
The first phase, called “Bitcoin Lockup,” focuses on Bitcoin holders being able to initiate the staking process by submitting transactions to the Bitcoin blockchain.
These transactions lock bitcoins in a secure, self-custodial staking script, thereby setting key parameters such as choosing the finalization provider to which they will delegate their PoS voting power.
It is important to note that although voting power is delegated, the staked bitcoins are not transferred to the finalization provider.
The Babylon protocol has also set a maximum time limit for staking, defined at 64,000 Bitcoin blocks, which is equivalent to about 15 months.
Users can decide to withdraw their funds early, following a debonding process that takes approximately 7 days.
Additionally, the protocol includes an initial staking limit of 1,000 bitcoins, which will be relaxed as the phase progresses.
This limit ensures that staking is conducted fairly, with restrictions on the maximum and minimum size of each stake to encourage broad participation and prevent monopolistic control of staking capacity.
Babylon Points and Security System
During the first phase, no direct rewards will be given to stakers as there is no active PoS chain yet.
However, a points system has been implemented to measure user activity, which will be relevant in future phases of the protocol.
Each Bitcoin block awards a total of 3,125 points, distributed proportionally among all active stakes, and both stakers and completion providers receive a share of these points, based on agreed fees.
The safety of the debonding process at this initial stage is ensured by a covenant committee, composed of several entities recognized in the industry.
This committee operates under a multi-signature scheme, where the signature of 6 of the 9 members is required to validate the debonding transactions, thus guaranteeing the integrity of the system without compromising the security of the staked funds.
Babylon has also conducted extensive security audits on its codebase for this phase, with reports conducted by Coinspect, Zellic and Cantina, ensuring the protocol is robustly protected against potential vulnerabilities.
While this is just the first phase of Bitcoin staking on Babylon, it marks a significant step towards creating a shared security marketplace that will allow users to earn multiple staking rewards on various PoS chains using the same bitcoins.
