Babylon pioneers a new track for BTC non-custodial staking, leading the transformation of the Bitcoin ecosystem.

Babylon is an innovative Bitcoin staking solution that utilizes cryptographic technology to achieve non-custodial staking of BTC native assets. The staked Bitcoin remains on the Mainnet, with security guaranteed by the Proof of Work mechanism. The entire staking process operates using "extractable one-time signatures" technology, eliminating the need to rely on any third-party bridges or custodial institutions. This highly secure design has gained widespread recognition within the Bitcoin community.

Babylon provides Bitcoin holders with a secure way to earn staking rewards, creating a new track for BTC staking that is expected to fundamentally change the operational model of the Bitcoin ecosystem. At the same time, introducing Bitcoin staking can also address some issues faced by small and medium-sized Proof of Stake chains, such as high inflation rates caused by the need to attract stakers and the large capital thresholds required to establish validation nodes.

The liquidity staking solution for Bitcoin is similar to a demand deposit, where users can deposit and withdraw at any time while earning interest. At the same time, liquidity staking tokens can also generate additional returns in other decentralized finance projects. In contrast, staking on Babylon is more like a time deposit, offering higher returns but not allowing immediate withdrawal after deposit.

This solution can also attract more non-mainnet Bitcoin users to participate, for example, users holding wrapped Bitcoin on Ethereum can also participate in Babylon staking. Essentially, liquid staking can be seen as the project team borrowing users' Bitcoin to stake in Babylon, paying users interest with the staking rewards, while the bonds given to users (i.e., liquid staking tokens) can also be traded.

Currently, most of Babylon's liquid staking tokens are built on the Ethereum network, with plans to support multi-chain in the future. Aside from a few projects that allow users to stake directly to Babylon, most projects adopt a custodial model, where the project party stakes on behalf of the users to Babylon, with liquidity support provided by third-party institutions.

In this emerging field of Bitcoin staking, it is unlikely to see a monopoly pattern similar to that of Ethereum staking. This is because the Bitcoin chain itself does not have native yields and is more akin to a re-staking business. Therefore, projects that enter this field early have the opportunity to quickly capture the market, and investors may also gain substantial returns from rapid growth.