Babylon

FOMO

Bitcoin

Cosmos

Babylon Labs, a new project for non-custodial staking, is preparing for its Cap-2 event for Bitcoin (BTC) deposits. The project has already held one similar event, leading to higher transaction fees.&nbsp;
Babylon Labs scheduled its Cap-2 staking event for October 9. However, due to faster block production, the target block will be reached on October 8. Babylon Labs has already started the last hours of the countdown, expected at 07:00 UTC.&nbsp;
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">
 ⏳ The countdown is on! ⏳
 Get ready to stake your BTC— We’re about 6 hours away from the Cap-2 launch!
 ⏰ Estimated start time: 7PM UTC
 — Babylon (@babylonlabs_io) <a href="https://twitter.com/babylonlabs_io/status/1843636479118962808?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">October 8, 2024</a>
</blockquote>
<script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
After that, users will have exactly 10 blocks to make their deposits. Before the event, BTC fees remained low at $1.19, with even lower baseline values around $0.84. The Bitcoin network is not too busy after the usage of Ordinals and Runes slowed down. 
The late Babylon Labs event lifted fees 10 times, to above $7. However, the fee rally is small compared to previous BTC congestion times, as the leading coin is now held closely with fewer active transactions.
The creation of FOMO means the drive to deposit BTC for passive earnings may boost transaction fees temporarily. The previous staking <a href="https://www.cryptopolitan.com/babylon-labs-creates-btc-fee-frenzy/" rel="noopener noreferrer nofollow">session</a> at the end of August also created an uptick in fees. The staking session is set to start at block 864790, in fewer than 50 <a href="https://www.blockchain.com/explorer" rel="noopener noreferrer nofollow" target="_blank">blocks</a> from the time of writing.&nbsp;
There will be no cap to staking, but Babylon Labs will accept transactions included until block 864799. This time, the minimal transaction is 0.005 BTC, but the maximal cap will be lifted up to 500 BTC. The current Cap-2 event happens at a similar price range compared to the August 26 staking round. BTC was in the $62,000 range during both events.
If the transaction misses the final block, it will have to be unbounded for a fee of 0.00032 BTC. Depositing BTC within the correct blocks will also assign points to some of the depositors, with regional restrictions.
<h3 id="span-style-font-weight-400-babylon-labs-wants-to-offer-secure-liquid-staking-span">Babylon Labs wants to offer secure liquid staking</h3>
Babylon Labs aims to offer native BTC re-staking to tap the liquidity of the underlying coin and secure an L2 ecosystem. The mechanism is similar to liquid staking on Ethereum or Solana, but using the native Bitcoin chain. Delegated BTC is used to vote on protocol finality. Malicious actors who are discovered will have the staked BTC slashed from their holdings.&nbsp;
The previous lockup event was capped at 1,000 bitcoins, which are still held in the protocol. The staking mechanism requires a finality provider, listing multiple hubs that will hold a fraction of the delegated BTC.&nbsp;
Depositors remain in control of their assets, but finality providers are key in storing a larger stake. They are similar to Eigen’s Actively Validated Services, which receive a delegated ETH stake. Finality providers will use the delegated BTC to produce blocks and ensure on-chain finality.&nbsp;
<figure id="attachment_597927" aria-describedby="caption-attachment-597927" style="width: 100%" class="wp-caption aligncenter"><img fetchpriority="high" decoding="async" class="wp-image-597927 size-full" src="https://www.cryptopolitan.com/wp-content/uploads/2024/10/BabylonProvidersOct82024.png" alt="The top 10 recipients of BTC delegation have already established their stakes on the Babylon Labs chain." width="596" height="385" srcset="https://www.cryptopolitan.com/wp-content/uploads/2024/10/BabylonProvidersOct82024.png 596w, https://www.cryptopolitan.com/wp-content/uploads/2024/10/BabylonProvidersOct82024-300x194.png 300w" sizes="(max-width: 596px) 100vw, 596px">
 <figcaption id="caption-attachment-597927" class="wp-caption-text">
 The top 10 recipients of BTC delegation have already established their stakes on the Babylon Labs chain. | Source: <a href="https://dune.com/queries/4009669/6750428" rel="noopener noreferrer nofollow" target="_blank">Dune Analytics</a>
 </figcaption>
</figure>
During the first staking event, a total of <a href="https://dune.com/queries/4009563/6750255" rel="noopener noreferrer nofollow" target="_blank">18,187</a> depositors spread a total of 1,000 BTC among all participating finality providers. Most of the deposits landed with the top 5 <a href="https://btcstaking.babylonlabs.io/" rel="noopener noreferrer nofollow" target="_blank">providers</a>. All the BTC staked are not really wrapped, bridged or sent to a third party.&nbsp;
Instead, users issue a transaction that locks the BTC on their side and can only unlock the assets after paying the unbounding fee. All staked BTC is protected by a timelock script until the user pays the unbounding fee. The BTC does not actually leave the user’s wallet, but the locked coins will be subtracted from the final balance.&nbsp;
Staked BTC that are outside the predetermined 10 blocks will not accrue points for eventual token farming. The number of points for a whole BTC will increase from 3,125 to 10,000, to be used in an eventual airdrop.
Bitcoin’s L2 development is slower and at an earlier stage compared to Ethereum. Babylon Labs aims to create a similar ecosystem of L2, data availability layers, and oracles, with no centralized coordinator. The first round of Bitcoin staking has already produced several apps, including a version of the Cosmos Hub, ANKR, as well as several specialized wallets.
Bitcoin staking is considered a Web3 activity. Self-custodial or plain BTC wallets are not eligible, but only Web3-enabled wallets. Those include Bitget, Binance’s app, imToken, Keystone, OKX Wallet, OneKey and Tomo.
–
Cryptopolitan reporting by Hristina Vasileva.

Babylon Labs may increase Bitcoin (BTC) fees with its second delegating session

Table of Contents

Cryptopolitan_News

Other articles published on Oct 8, 2024

Last Chance to Buy These Altcoins Before They Explode – Expert Predicts 500x Gains by Q4

Dugaan Sosok Satoshi Nakamoto Semakin Kuat Mengarah ke Nick Szabo

Animoca Brands is the most active investor for Q3 with 21 projects

Waterfall Network Partners with InfStones to Facilitate Node Deployment

Vitalik Buterin donates 100 ETH to support Tornado Cash developers in their legal fight

Ex-FTX exec ‘not worried’ about reporting to prison on Oct. 11

Join our free newsletter for daily crypto updates!