Babylon Launches Bitcoin Staking, New Opportunities For BTC Holders

Babylon slides Bitcoin staking (Photo; Doc. Cryptoviet)

JAKARTA - Babylon, a blockchain technology platform, launched the first phase of the Mainnet staking Bitcoin on August 22. This move not only offers new benefits to Bitcoin holders, but also opens up opportunities for them to optimize their assets through Proof of Stake (PoS)-based staking systems. Thus, Bitcoin now serves not only as a store of value or a means of payment, but also as an instrument that plays an active role in securing PoS networks and gets rewards.

Babylon introduced a protocol that allows Bitcoin holders to lock their BTCs through self-custodial smart contracts. That is, Bitcoin holders remain in full control of their assets without the need to rely on intermediaries. This is the first time Bitcoins have been used in this kind of staking mechanism, which was previously more commonly applied to other cryptocurrencies such as Ethereum.

According to Crypto News, according to data released by Babylon, the platform has attracted more than 12,720 stakers and 20,610 staking delegates since its launch. This figure shows the high enthusiasm of the crypto community for this innovation. With this initiative, the Bitcoin function was expanded from what was originally just a means of storeing value or payment tools, becoming an instrument that plays an active role in securing PoS networks and getting rewards.

Staking allows Bitcoin holders to lock their assets for a certain period of time using a secure and non-intermediate Babylon staking script. In the PoS system, validators are selected to create new blocks and confirm transactions based on the number of coins they hold and are ready to "stake" as collateral. This process gives validators the voice power in influencing PoS network consensus.

Bitcoin stakers have two options in using their voting power: they can set up their own finality providers to directly take advantage of their voice power, or delegate their voice power to a more experienced third-party finality provider. The second option allows stakers to stay in touch without having to get directly involved in the complexity of the PoS system.

To maintain system integrity, the Babylon protocol applies a slashing' mechanism that can punish the finality providers who are trying to damage the PoS system. If an dishonest action occurs or an attempt to disrupt the network, BTC delegated to them could be partially or completely confiscated. This mechanism serves as a deterrent for harmful actions, both from stakers and finality providers, thus encouraging honest behavior in the network.