Babylon Bitcoin BTC Staking

How Babylon Achieves Universality on a Scale

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Babylon is a Bitcoin Staking Protocol that allows Bitcoin holders to stake their BTC, providing security for different PoS systems. As a result, BTC holders can gain rewards on their capital in the tokens of PoS systems they support. On the other hand, different blockchains or DA layers that decide to integrate with Babylon can use it to secure their networks with Bitcoin, the world’s most valuable crypto asset.

To understand it better, please read our previous article on BTC staking with Babylon:

What is Bitcoin Staking?
Introducing Babylon 1. The Problem Bitcoin is the most prominent and valuable cryptocurrency in the world. However, it lacks mechanisms for holders to earn passive income, similar to PoS networks such as Ethereum, leading to millions of idle Bitcoins. The evolving blockchain landscape, especially Proof-of-Stake chains, demands consistent security and

In previous blog posts, we discussed Bitcoin Staking and how Babylon provides non-custodial staking of BTC:

Understanding Non-Custodial Staking on the Babylon
What is Babylon? Babylon is a revolutionary staking protocol that allows Bitcoin holders to provide their BTC assets to secure PoS systems and receive a yield on their assets. The idea of BTC staking is relatively new and needs further explanation. When discussing BTC staking, many people associate it with

Today, we will look at Babylon from another angle, show how Babylon is achieving universality on a scale, and show how significant Babylon's impact can become on the blockchain industry and different PoS systems because of its flexible architecture.

Babylon's key components

As we discussed, Babylon leverages BTC to provide shared security, making it a reliable source of security for various PoS systems. But how does it achieve this?

Babylon introduces the role of Finality Providers, who receive delegations of BTC from Bitcoin holders. Finality Providers are additional validators that can participate in the block validation process. The largest blockchain validators, including P2P.org, will be Finality Providers in Babylon.

After receiving the BTC delegation, Finality Providers can participate in the block verification process. If they act maliciously, for example, by double signing, the portion of Bitcoins delegated by stakers can be slashed. Slashing can be technically achieved because of the EOTS signature that Finality Providers use to validate blocks. When Finality Providers double sign, their private key is leaked, which allows the broadcast of a pre-approved slashing transaction that was created when the user staked the tokens.

Babylon’s design is elegant and flexible. It adds additional finality rounds to blockchains operated by Finality Providers. This means that PoS systems, which have their own consensus mechanisms and validators, can add an extra level of verification supported by a set of Finality Providers who provide BTC as a slashable asset.

This set of Finality Providers can improve security and make the blockchain more decentralized. Decentralization is crucial for any blockchain to be secure and sustainable, but not all blockchains boast about it. Additionally, finding and maintaining a stack of validators is a resource-intensive process.

Babylon acts as a shared security marketplace that brings together Finality Providers, who offer shared security, and PoS systems, which receive it in exchange for rewards.

Cosmos as a First Stop

Babylon plans to focus on the Cosmos SDK blockchains and the Babylon PoS chain itself as the first PoS systems. Like other chains built on CometBFT, the Babylon PoS chain will have a set of validators that validate blocks and broadcast them to other nodes. Validators in Cosmos use the native tokens of these chains as security collateral. If they act maliciously, the portion delegated tokens can be slashed.

However, when integrated with Babylon, Cosmos SDK chains add an additional finality round that provides extra security through Finality Providers. As shown in the diagram, these Finality Providers become an additional step in the block path, creating a more secure block verification process.

If Cosmos SDK chains decide to work with Babylon and receive additional security, they must reward Finality Providers to attract them. This creates a marketplace where Finality Providers offer security, and blockchains reward them.

Other Ecosystems Are Welcomed

One of the most exciting aspects of Babylon's plan is its focus on PoS systems outside of the Cosmos ecosystem. From Babylon's announcements, we know that Babylon plans to integrate its Bitcoin Staking Protocol to provide shared security to Bitcoin L2s, AltLayer rollups, standalone chains, and more.

The reality is that the additional round of finality after the protocol has finalized a block can be added to different consensus protocols, not just CometBFT. Babylon's general approach can open the doors to providing security for various blockchain ecosystems and allow Babylon to build a shared security marketplace, where PoS systems from different ecosystems can interact with finality providers and receive security from them.

When speaking about Babylon, we should always keep in mind that Babylon's impact can be much more significant than we think right now. This is achieved through its architecture and the vast amount of BTC collateral that can be used. In the long run, this shared security model can lead to a more secure and resilient blockchain environment. As more PoS systems join the Babylon, the collective security and stability of the entire ecosystem improve.

How to Participate?

If you're interested in participating in the launch of Babylon, we recommend two main directions for involvement:

  1. Testnet Participation:
    Engage with the Babylon testnet by staking your SignetBTC directly on Babylon's official website. This allows you to familiarize yourself with the platform's features and functionalities without risking real assets.
  2. Support for Large Bitcoin Holders:
    If you hold significant Bitcoin, don't hesitate to contact our team. We can provide tailored validator solutions that will be optimal for you when the mainnet launches. (Person of contact)

The Babylon Testnet-4 has already been launched, and the mainnet launch is anticipated by the end of the first half of the year. This new testnet focuses on the security of staked Bitcoins by testing user interactions with the BTC Signet test network. The Babylon team is actively monitoring updates and feedback from the community to ensure the network's

About P2P Validator

P2P Validator is a world-leading non-custodial staking provider, securing over $7 billion from over 10,000 delegators/nominators across 40+ high-class networks. We have actively participated in the Babylon Chain activities since the beginning.

Do not hesitate to ask questions in our Telegram chat or contact Alik via [email protected]. We are always open to communication.

Web: https://p2p.org

Twitter: @p2pvalidator

Telegram: https://t.me/P2Pstaking

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