Bitcoin staking protocol Babylon raised approximately 23,000 BTC during its second staking round on Tuesday. This is a much larger amount than in the first wave, and Bitcoin fees did not skyrocket this time, resulting in a much smoother experience for network users.
Babylon co-founder and Stanford University professor David Tse, who helped launch the staking startup’s mainnet six weeks ago, told Decrypt that the round, called Cap-2, “went pretty well.” Ta. He said in an interview Tuesday that users delegating $1.4 billion in Bitcoin to the protocol was “certainly beyond expectations.”
Babylon has built a two-sided market rooted in Bitcoin reserves. On the one hand, users will one day be able to lock up their Bitcoin in exchange for rewards, and on the other hand, proof-of-stake networks will be able to leverage that capital to provide security.
The project is focused on building out the supply side of Babylon before integrating with various rollups and networks, and previously discussed the potential for networks like Ethereum and Solana to benefit from Bitcoin staking. It suggested that there was. And while Tuesday’s staking round saw a huge amount of Bitcoin being delegated, the process proved to be much more orderly than the initial lockup in August.
By limiting the Bitcoin staking amount to 1,000 BTC, the median cost per Bitcoin transaction jumped to $132 during the first staking round. This time, the median cost per Bitcoin transaction only rose to $2.37, avoiding a network-wide headache for Bitcoin users.
The difference is believed to be due to “updated parameters” that the protocol’s developer, Babylon Institute, set for Tuesday’s intake. Instead of limiting the number of Bitcoins that can be staked, Babylon’s developers have moved to a so-called “period-based” approach.
During the 10-block window starting at 864790 on Tuesday, users could stake an unlimited amount of Bitcoin, but were limited to 500 BTC per transaction. Previously, users were limited to staking 0.5 BTC per transaction, with an overall limit of 1,000 BTC for the first staking round.
The parameters of Babylon’s first staking round created a situation where speed was critical and people paid a premium to participate, Luxor Mining CEO Nick Hansen told Decrypt. spoke.
“When space is limited and everyone is competing to get into that space, time becomes a higher priority for trading,” Hansen said in an interview. “The only way to speed up trading is to increase fees.”
Tse said parameters were changed ahead of Tuesday’s staking round to expand access to the protocol, adding that there will likely be similar opportunities in the future. He explained that the delay between the first and second staking rounds was technical in nature.
“The first (round) was very small, mainly for safety reasons,” he said. “We wanted to make sure our protocols were secure, but we had a bounty program in place to get people to attack the system.”
Babylon announced in late May that it had closed a $70 million funding round led by Paradigm, with participation from Galaxy and Polychain Capital. This funding round follows an $18 million Series A funding round late last year.
Although the project is still in its early stages, Babylon will eventually build its own proof-of-stake network called Babylon Chain, Tse said. The network will act as a major “coordination layer”, allowing others to use locked Bitcoin to secure other chains, he added.
Edited by Andrew Hayward
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