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 liquidity contributions, a role Bitcoin has yet to play significantly.

Current yield-generating solutions for Bitcoin involve moving assets to centralized platforms, which must be wrapped or stored in custodial wallets. This introduces risks such as hacks and regulatory issues, undermining the blockchain's decentralization and security principles.

Babylon addresses these issues by offering a decentralized alternative that not only opens up new opportunities for Bitcoin holders to generate yields but also enhances the security and functionality of the broader blockchain infrastructure.

2. Babylon's Solution

Babylon is a PoS protocol designed to enable Bitcoin holders to stake their BTC in a secure and non-custodial manner, allowing them to earn rewards in tokens of chains they support.

The protocol includes two protocols:

Bitcoin timestamping: This protocol sends succinct and verifiable timestamps of any data (such as PoS blockchains) to Bitcoin
Bitcoin staking: This protocol allows Bitcoin, the asset, to provide economic security to any decentralized systems through trustless (and self-custodian) staking.

At its core, Babylon allows Bitcoin users to directly stake their BTC, supporting Proof-of-Stake chains while simultaneously earning yields in tokens of chains they support. This capability transforms idle Bitcoin into active, yield-generating assets without requiring holders to relinquish control or security.

The key features of Babylon include:

Yield Generation: Users can earn rewards by staking their BTC directly on the platform.
Fast Unbonding: A quick unbonding process allows users to withdraw their staked Bitcoin promptly.
Non-Custodial Staking: Users maintain complete control over their BTC without transferring them to a third party.
EOTS Signature for Security: This ensures security by ensuring the staked Bitcoin is locked and accounted for.
Cross-Chain Interoperability: Facilitates interactions between different blockchain networks, enhancing the utility and reach of staked assets.
Slashing Mechanism: Implements measures to penalize bad actors, thus safeguarding the network's integrity and user assets.

Babylon presents an innovative and secure solution to the problems faced by Bitcoin holders and the broader blockchain ecosystem.

3. How does it generally work

A user with BTC can secure the Babylon chain or other Cosmos PoS chains while receiving yields in their tokens. To do this, the user must lock their BTC coins on Bitcoin. Because Bitcoin doesn't support smart contracts, the user should initiate the staking process using a UTXO transaction that creates a time lock for the BTC coins. This UTXO transaction has three main outputs: the time lock can expire, allowing withdrawal; the user can unbond their transaction before expiration; the transaction can be slashed if a validator acts maliciously.

After signing the transaction, the user delegates their BTC tokens to a finality provider, who can validate the transaction. This allows the user to receive yield if the provider secures blocks correctly. However, if the finality provider acts maliciously, it can be slashed.

The cornerstone of the entire model is the pre-signed slashing transaction and EOTS keys. When staking, the user pre-signs a slashing transaction that can be broadcast to the network if the finality provider acts maliciously. If the provider double-signs a block, its EOTS keys are revealed, and the covenant committee can sign the pre-approved transaction using the finality provider’s private key.

Detection of malicious activity: Finality providers detect malicious activity, such as another finality provider signing a block twice.
Exposure of private key: If malicious activity is detected, the malicious finality provider’s private key is leaked.
Notification and slashing: The finality providers notify the covenant committee, which signs the pre-signed slashing transaction using the exposed private key and broadcasts it to the network.
Slashing transaction: A predetermined amount of Bitcoins is sent to a burn address as a penalty for the malicious activity.

The process results in securing PoS chains and receiving yields for BTC tokens, which depend on the chains the user secures. Initially, the Babylon chain will start on the mainnet by ensuring only the Babylon chain itself. Still, stakers can secure other Cosmos chains and receive yields in their tokens.

4. Investors and Market Confidence

Babylon has successfully secured substantial funding across several rounds, showcasing strong market trust and investor interest in its innovative approach to Bitcoin staking.

Seed Round: Babylon initiated its funding journey by raising $8.8 million in a seed round led by IDG and Breyer Capital, emphasizing early support from established investors in transformative technologies.

Series A Funding: The momentum continued with a Series A round that raised $16 million. This round was co-led by Polychain Capital and Hack VC and saw additional participation from Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital, and IOSG Ventures. The diverse investor base in this round highlights a robust endorsement of Babylon’s technology and strategic direction.

Last Round: Binance Labs made the most recent investment, reflecting significant strategic backing. This partnership provides financial resources and enhances Babylon’s capabilities in technology development and global market positioning.

These investment milestones fund Babylon's growth and affirm its potential as a significant player in the evolving landscape of blockchain technology and cryptocurrency.

5. How to Participate

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

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.
Support for Large Bitcoin Holders: If you hold a significant amount of Bitcoin, don't hesitate to contact our team. We can provide tailored validator solutions that will be optimal for you when the mainnet launches.

The Babylon is currently in the testnet phase, with the mainnet launch anticipated by the end of the first half of the year. The new testnet (bbn-test-4) will focus on the security of staked Bitcoins by testing user interactions with the BTC Signet test network. The Babylon team plans to launch this new testnet towards the end of May 2024. The team is closely monitoring updates and feedback from the community to ensure the robustness and security of the network before the mainnet launch.

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.

Do not hesitate to ask questions in our Telegram chat or contact our team directly on X or LinkedIn. We are always open to communication.

Web: https://p2p.org

Twitter: @p2pvalidator

Telegram: https://t.me/P2Pstaking

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Kamil Jakub Natil

Now Available: Our new Staking Portfolio Dashboard

<h3 id></h3>As one of the leading staking providers in the market, we frequently receive feedback from our clients about the need for a more comprehensive staking portfolio dashboard. They expressed the necessity for a tool that effectively tracks and monitors their staking metrics. That’s why we are excited to announce the launch of the Ethereum Staking Dashboard, a tool crafted to enhance how you track and analyse your Ethereum staking.This innovative dashboard is designed to provide users with a detailed view of crucial staking metrics for the entire portfolio, demonstrating P2P’s commitment to advancing blockchain technology through strategic innovation.Our team has worked hard to create a product that not only offers an exceptional user experience but also provides a broad set of features tailored for Ethereum stakers. Uncover the benefits that make our dashboard exceptional:<ol><li>Support of Any Delegator Address:<ul><li>Ability to track data for the entire Ethereum community.</li></ul></li><li>Support of Multiple Addresses:<ul><li>Ability to create your personal account and track several deposit addresses</li></ul></li><li>Detailed Rewards Data:<ul><li>Fetch detailed rewards data for the tax office or any other purposes.</li></ul></li><li>Ability to View Public Staking Data:<ul><li>View and share public staking data for any address.</li></ul></li><li>Track All Figures in Tokens and USD:<ul><li>Monitor your staking figures in both tokens and USD for better financial oversight.</li></ul></li><li>Daily Rewards Statistics by Different Reward Types:<ul><li>Access detailed daily rewards statistics, categorised by reward types.</li></ul></li><li>Comprehensive Performance Metrics:<ul><li>Compare your portfolio's performance against the network with key metrics such as extracted rewards, participation rate, attestation correctness, missed blocks, % of MEV blocks, and others.</li></ul></li><li>Detailed MEV Rewards Statistics:<ul><li>Gain insights into detailed MEV rewards data.</li></ul></li><li>Detailed Lifetime Data for Any Validator:<ul><li>Track the performance history and detailed lifetime data for any validator.</li></ul></li></ol>Ethereum Staking Dashboard: Open Insights for AllEthereum Staking Portfolio Dashboard is open to all, providing comprehensive staking insights in a user-friendly manner. Try it yourself: <a href="https://app.p2p.org/dashboard?ref=p2p.org">https://app.p2p.org/dashboard</a>The Future of Staking Analytics: Expanding HorizonsWe're committed to expanding our platform to include data from a diverse range of cutting-edge blockchain networks, ensuring that our users have access to the most comprehensive and up-to-date staking insights. In the coming months, keep an eye out for the integration of data from EigenLayer, Solana, Polkadot, and Cosmos Hub.Unleash the Potential of Staking Data with Staking Data API Ready to take your staking applications and research to the next level? With our Staking Data API, you can fetch all of the staking data from a wide range of leading networks, including Ethereum, Polkadot, Solana, Cosmos Hub, Polygon, Sui, Kusama, Vara, and Moonbeam. Visit our <a href="https://p2p.org/products/staking-data-api?ref=p2p.org">Staking Data API</a> to explore the endless possibilities and unlock the full potential of staking data.

Richard Bagshaw

from p2p validator

Polkadot, Staking Polkadot Dynamic Fees

We have exciting news that will boost your staking returns!From June 1st to June 30th, we’re launching a special promotion to reduce fees to an incredible 0.5% for a select group of our validators in the Polkadot network. With our dynamic fee structure, you can enjoy better returns and a more rewarding staking experience.What’s New:<ul><li>Dynamic Fee Structure: We’re temporarily lowering the fees to 0.5% for a subset of our validators. This subset changes approximately monthly, so you can always access <a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> validators with reduced costs.</li><li>Better Returns: With lower fees during this promo period, you can earn more from your staking.</li><li>Monthly Rotating Low-Fee Validators: A new set of <a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> validators will be chosen monthly. This ensures you can always stake with low-fee validators, regardless of when you start staking.</li><li>Fair and Transparent: We’re all about transparency. The rotation of low-fee validators will be clear and balanced, and each <a href="http://p2p.org/?ref=p2p.org">r</a>otation will be announced on <a href="http://p2p.org/?ref=p2p.org">P2P.org</a> communities on Telegram and Twitter. Stay tuned!</li></ul>How It Works:<ul><li>From June 1st to June 30th, take advantage of the 0.5% fee with these validators:</li></ul><div class="kg-card kg-callout-card kg-callout-card-blue"><div class="kg-callout-emoji">💡</div><div class="kg-callout-text">13uW7auWPX9WAtqwkBx7yagb78PLcv8FAcPZEVCovbXoNJK4 12ud6X3HTfWmV6rYZxiFo6f6QEDc1FF74k91vF76AmCDMT4j 145Vw57NN3Y4tqFNidLTmkhaMLD4HPoRtU91vioXrKcTcirS</div></div><ul><li>At the start of each month, we’ll announce the new validators with reduced fees for the next period. The current validators’ fees will then return to our standard rate (4.5% as of May 2024).</li></ul>Remember, this reduced fee is a special promotion and not permanent. Make sure to take advantage of it while it lasts!We’re thrilled about these changes and believe they’ll make a significant difference for you. Thank you for being part of the <a href="http://p2p.org/?ref=p2p.org">P2P.ORG</a> community and for your continued support.If you have any questions or want to discuss this further, our support team is here to help.Happy Staking!<h1 id="about-p2p-validator">About P2P Validator</h1><a href="https://p2p.org/?ref=p2p.org">P2P Validator</a> 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 Polkadot/Kusama network since the beginning.<hr>Do not hesitate to ask questions in our <a href="https://t.me/P2Pstaking?ref=p2p.org">Telegram</a> chat or contact Alex via <a href="mailto:[email protected]">[email protected]</a>. We are always open to communication.<hr>Web: <a href="https://p2p.org/?ref=p2p.org">https://p2p.org</a>Stake DOT with us: <a href="https://p2p.org/polkadot?ref=p2p.org">https://p2p.org/polkadot</a>Twitter: <a href="https://twitter.com/p2pvalidator?ref=p2p.org">@p2pvalidator</a>Telegram: <a href="https://t.me/P2Pstaking?ref=p2p.org">https://t.me/P2Pstaking</a>

Kamil Jakub Natil

from p2p validator