ABCDE: Why did we invest in Babylon?

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DLC.Link
2 months ago
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Babylon will greatly enhance the ecological value of Bitcoin and cultivate a safer and larger POS economy.

Babylon is the leading project in the Bitcoin ecosystem and the largest Staking infrastructure in Bitcoin. It will unlock the income value of 21 million Bitcoins and expand the security of Bitcoin to protect more POS decentralized worlds.

1.Babylon unlocks the Staking and security value of Bitcoin

The current market value of BTC exceeds 700 billion US dollars, but due to problems such as Bitcoin not supporting smart contracts and difficulty in expansion, the value has not been unlocked for a long time. Babylon proposes a new way to scale Bitcoin by extracting security from the Bitcoin chain and sharing it with various Proof-of-Stake (PoS) chains such as Cosmos, Binance Smart Chain, Polkadot, Polygon, etc., thus providing BTC Staking providers bring yields while ensuring the security of the POS chain.

Babylon’s vision is to extend the security of Bitcoin to protect the decentralized world. By leveraging three aspects of Bitcoin—its timestamping service, block space, and asset value—Babylon is able to deliver Bitcoin’s security to numerous Proof-of-Stake (PoS) chains, creating a more robust, unified ecosystem .

Babylons Bitcoin staking protocol adopts a remote staking method and overcomes the lack of smart contracts through cryptography, consensus protocol innovation and optimized use of the Bitcoin script language. Babylons staking protocol allows Bitcoin holders to credibly stake Bitcoin without the need to bridge to the PoS chain, and provides the chain with complete slashable security guarantees. Babylon’s innovative protocol eliminates the need for bridging, encapsulation, and custody of staked Bitcoins.

A key aspect of Babylon is its BTC timestamping protocol. It timestamps events from other blockchains onto Bitcoin, allowing those events to enjoy Bitcoin timestamps just like Bitcoin transactions. This effectively borrows the security of Bitcoin as a timestamp server. The BTC timestamp protocol achieves rapid equity unbundling, composable trust, and reduced security costs to maximize the liquidity of Bitcoin holders. The protocol is designed as a modular plug-in that can be used on a variety of different PoS consensus algorithms and provides a basis on which the reset protocol can be built.

ABCDE: Why did we invest in Babylon?

2. Babylon’s trustless Staking mechanism

Babylon enables users to achieve safe staking without transferring Bitcoins out of their own addresses.

Thus, Bitcoin holders can keep their Bitcoins in their own self-custody vaults. Funds can only be withdrawn from the vault under two circumstances:

1. Unlocking: Stakers can retrieve their stake using their private key.

2. Default: If the pledger violates the agreement, the funds will be deducted from the automatic liquidation of the vault.

In both cases, no third party is involved, and there is no other way to spend money from the vault.

Babylon is designed to implement Staking and Slash technology mechanisms that do not involve third parties. First, Babylon’s staking mechanism is implemented by locking Bitcoin on the Bitcoin chain (the address is called a “Staking address”) rather than transferring it to the PoS chain. Bitcoins on this address will be locked for verification on the PoS chain. During the verification process, the Bitcoin on the Staking address will be considered collateral to ensure the honest behavior of the verifier. If a validator breaks the rules, their collateral will be slashed. This means that Bitcoin holders can obtain the benefits of the PoS chain without exposing their assets to the PoS chain.

Secondly, Babylon’s Slash technology mechanism is implemented by using advanced cryptography, consensus protocol innovation and optimized Bitcoin scripting language. Specifically, Babylon uses a technology called Accountability Assertion, which allows penalties to be sent back to the Bitcoin chain after a violation is discovered on the PoS chain, and slashing operations to be performed on the Bitcoin chain. This design avoids the risk and complexity of needing to involve third parties while maintaining security and reliability.

Finally, Babylon’s system architecture is based on a three-layer structure, in which the Babylon chain serves as the control plane, allowing interaction between Bitcoin and the data plane (i.e., PoS chain). This design allows Babylon to achieve interoperability and network effects between PoS chains and Bitcoin without involving third parties. For example, Babylon can solve cross-PoS chain transactions based on the final status of the two PoS chains on the Babylon chain.

To sum up, Babylon achieves Staking and Slash technology mechanisms that do not involve third parties by using advanced cryptography, consensus protocol innovation and optimized Bitcoin scripting language, and a system architecture based on a three-layer structure.

So Babylon can be implemented without smart contracts or forking Bitcoin:

-Trustless staking: no bridging or escrow

-Quickly unbundle pledged Bitcoins to achieve high liquidity

-Slashable security of POS chain

In February of this year, Babylon has implemented BTC timestamping testnet (Babylon testnet first step: use BTC timestamping in Cosmos to reduce the original 21-day staking period to 1 day)

BTC staking poc was implemented in July this year, and BTC staking testnet will be launched in Q4

In Q1–2 of 2024, Babylon will be launched on Mainnet, and Data Availability will be launched in Q3–4 of 2024.

In Q1–2, 2025, Babylon will launch BTC Liquidity MarketPlace

3. Expand the application territory of Bitcoin

Business models can consider both vertical and horizontal aspects:

  • The vertical direction can empower the entire BTC ecosystem such as BTC rollup or BTC middleware, allowing Bitcoin to be used on the second and middle layers;

  • Laterally, BTC can be pledged in different POS chains to expand the possibilities of BTC, so that Bitcoin can generate income in other POS chains;

ABCDE: Why did we invest in Babylon?

While expanding the application landscape of Bitcoin, Babylon will capture the following values:

- Babylon will collect part of the staker rewards from stakers

- The fees collected by Babylon will be distributed to the node operator and babylons treasury

- More stakers can boost Babylon’s token value

4. Hard-core scientific research and technical team:

The genesis of Babylon stems from a research paper on the security of Bitcoin, an original scientific research effort co-authored by co-founders David Tse, Fisher Yu, EigenLayer founder Sreeram Kannan, and other co-authors.

David Tse【co-founder】

Tse received the University of Waterloo in 1989BS in Systems Design Engineering, 1991 MS in Electrical Engineering from MIT, 1994in Electrical Engineering from MITPh.D. As a postdoc, he wasATT Bell Labsof a staff member.

TseResearch at Stanford University focuses onInformation theory and itsWireless communicationmachine learning, energy andcomputational biologyapplications in other fields. Won the 2017Claude E. Shannon Award. Elected to the United States in 2018Academician of National Academy of Engineering

Mingchao (Fisher) Yu 【Founding CTO】

Holds a PhD in Telecommunications from The Australian National University, developing theories and algorithms in network information theory and coding, with a special focus on wireless communications.

In addition, the team also has a consulting team including Co-Founder Sunny Aggarwal of Osmosis lab, Sreeram Kannan, founder of eigenlayer, etc.

5. Looking forward to Babylon’s future Bitcoin ecosystem:

Babylon is also extending Bitcoin’s security to Bitcoin’s Data Availability layer and Bitcoin’s Layer 2.

Bitcoin DA Protocol: Babylon is developing a Bitcoin DA protocol that leverages Bitcoin’s limited block space to perform critical tasks, such as providing a censorship-proof layer to the proof-of-stake chain. As the most secure and censorship-resistant storage space in the world, Bitcoin’s block space becomes a valuable resource to protect the decentralized world from censorship.

Babylon Layer2: babylon can be used as an intermediate layer between bitcoin rollup and bitcoin, and as an intermediate layer for temporary store data before bitcoin inscription. This layer2 can greatly empower the entire ecosystem:

- Protect the security of layer2 through babylon

- Greatly reduce gas costs on the second floor

- Layer2 can generate a large number of Bitcoin applications

- Carrying the overflowing user traffic of Bitcoin layer and increasing the huge Bitcoin ecological user base.

In summary, Babylon, as the leading project of the Bitcoin ecosystem, will expand an ecological world centered on Bitcoin, unlock the staking value of Bitcoin with a market value of 700 billion US dollars, and turn Bitcoin into a more extensive interest-bearing asset, providing a new platform for Bitcoin. Coin holders provide income. At the same time, Babylon greatly enhances the ecological value of Bitcoin, vertically expands the second-layer and middle-layer applications of Bitcoin, horizontally expands the revenue value of Bitcoin in various POS chains, and cultivates a safer and larger POS economy.

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