Introduction
Babylon is a platform designed to enhance the security of Proof-of-Stake (PoS) chains by leveraging Bitcoin’s idle capital. It achieves this by allowing Bitcoin holders to stake their Bitcoins without the need for wrapping, bridging, or third-party custody, ensuring security and trustlessness. The core feature of Babylon is its Bitcoin Staking Protocol, which uses advanced cryptographic techniques to make Bitcoin UTXOs slashable in the event of a PoS attack, thereby integrating Bitcoin’s security with PoS chains.
Babylon also employs a Bitcoin Timestamping Protocol that synchronizes PoS chains with the Bitcoin network, facilitating fast unbonding of staked Bitcoins. This enables a two-sided market where Bitcoin holders can earn yields by staking on various PoS chains, and PoS chains can enhance their security by utilizing Bitcoin-backed staking.
Prior art
What is rBTC and its use case
Users can deposit BTC on the StaFi Protocol without any limitations based on their capacity. The deposited BTC is subsequently staked by StaFi’s MPC staking account.
Converting rewards from BTC staking into BTC is essential for establishing the exchange rate between rBTC and BTC. However, since rewards are stored on the BBN chain, converting them into BTC requires wrapped BTC on the BBN Chain.
Users who deposit BTC on StaFi will receive an equivalent amount of rBTC (rToken StaFi equivalent) to the value they staked. rBTC is an rebase token. Subsequently, users can freely trade rBTC (rToken equivalent) or provide liquidity (LP) to earn additional yield.
Why choose rBTC
Babylon is a leading project in the BTC staking field and a significant market narrative. The release of rBTC can help StaFi expand its influence.
Currently, Babylon is still in development and has only launched on the testnet. So the release of rBTC doesn’t require actual incentives; it just needs to coordinate with Babylon for related scoring and marketing plans.
Finally, rBTC will serve as a crucial real-world use case for the BTC LSD Stack.