Why pSTAKE is Building BTC Liquid Staking on Babylon

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Find out why pSTAKE has decided to build a Bitcoin liquid staking solution on Babylon to bring yield to BTC holders.

pSTAKE is venturing into the Bitcoin industry with an innovative and secure BTC liquid staking solution. This groundbreaking solution will finally bring native yields to all BTC holders, a major feat that hasn’t been accomplished before.

Our first step will see pSTAKE collaborating with Babylon, a security-sharing protocol, to unlock liquidity for the potential 21 million BTC supply and provide a yield to all holders.

The liquid staking solution we’re building on top of Babylon’s protocol will allow users to deposit BTC into pSTAKE and instantly earn a secure yield on their holdings while retaining the asset’s liquidity through liquid staking.

pSTAKE is bringing a liquid staking solution to Bitcoin to provide holders with a yield. 

pSTAKE’s liquid staking solution for Bitcoin will come through a collaboration with Babylon, a newly emerging security-sharing protocol. This strategic collaboration leverages the strengths of both pSTAKE and Babylon to bring a unique and innovative solution to the Bitcoin industry. 

Let’s dive into why pSTAKE has decided to build on the Babylon Protocol and bring yield to BTC holders through liquid staking.

Building on Babylon: Using Security-Sharing to Provide the First Source of Staking Yield for BTC Holders. 

Babylon is a revolutionary Bitcoin staking protocol that enables users to stake BTC and earn an altcoin yield without the need for a third-party custodian or bridging protocol. This ambitious security-sharing initiative is set to redefine how proof-of-stake blockchains achieve security by tapping into the untapped liquidity locked in Bitcoin. 

The innovation allows Bitcoin holders to stake BTC through a non-custodial route to gain the rights to validate PoS chains and earn an altcoin staking yield on the chains it secures. Effectively, it allows PoS chains to bolster their security by utilizing idle BTC to share security from Bitcoin’s battle-tested proof-of-work mechanism. 

Its infrastructure leverages Bitcoin scripts and cryptographic techniques to provide a secure avenue to enable Bitcoin staking across traditional PoS chains. For example, it utilizes the time-locking feature built into the Bitcoin network to turn BTC into a slashable asset through UTXO burning, helping to disincentivize malicious activities from those staking.

In addition to trustless staking, Baylon adheres to the concept of “Your Bitcoin, Your Rules” by allowing stakers to easily unbond its stake at any moment, allowing instant redemptions of BTC through its checkpointing feature.

We’re building our Bitcoin liquid staking solution on top of this Bitcoin security-sharing protocol to bring the first yield to BTC holders. Most importantly, the Babylon protocol is entirely secure, living up to the high-security standards we hold ourselves accountable to at pSTAKE. 

The Case for Babylon in Shared Security world

But why is the concept of shared security heating up, and how can it provide a yield to BTC holders?

Emerging proof-of-stake chains often face a challenge in attracting the economic security (deposited native assets – the stake) required to build a secure blockchain, and attract new users. However, this challenge can be overcome by leveraging the security from established blockchains, such as Bitcoin, through the innovative functionality of Babylon’s protocol.

Shared security plays a crucial role in bringing socially trusted, high-market-cap assets to the blockchain systems that require additional security. It does so by creating a unique two-sided marketplace, with PoS chains consuming security and established blockchains supplying that security. In this context, Babylon acts as the facilitator of this innovative marketplace.

With Babylon’s protocol, users can stake their BTC, which is then used to secure PoS ecosystems. The protocol is entirely modular and can be seamlessly integrated into any PoS chain to provide security. Each PoS chain can opt into this Bitcoin-backed security and allocate the rewards it wants to pay for that security. This not only enhances the security of these ecosystems but also provides native staking rewards to BTC holders.

In essence, this solution offers a reliable source of yield while making BTC a more active asset. You see, Bitcoin isn’t an active asset. Its $1.4 trillion market cap sits idle as users wait for capital appreciation. Babylon aims to use this vast reservoir of unutilized value to share security from the Bitcoin network and secure PoS ecosystems and provide yield to stakers. 

pSTAKE’s Liquid Staking Solution for Bitcoin yield. 

So, how do we plan to integrate Babylon’s groundbreaking features into a liquid staking solution?

Our BTC liquid staking solution will allow users to deposit BTC into pSTAKE to mint a liquid staking token that represents their staked BTC and earns a yield. This token can be used elsewhere in the DeFi/BTCfi world, providing additional opportunities to generate yield on their BTC holdings, and can be swapped back into BTC at any time.

The solution unlocks liquidity for BTC holders who would otherwise have kept BTC stored on an exchange or locked away in cold storage. Instead, BTC holders will soon be able to securely liquid-stake their BTC through pSTAKE and earn a yield while retaining the liquidity of their assets. Essentially, this means that you can earn a passive income on your BTC holdings without sacrificing its liquidity, providing a win-win situation for BTC holders. 

Once deposits open on Babylon, BTC deposited into pSTAKE will be staked on the Babylon Protocol to earn a yield in the form of PoS tokens distributed through liquid staked BTC. 

With pSTAKE’s Bitcoin liquid staking solution, BTC holders can liquid-stake their assets and earn a yield via Babylon, all while maintaining liquidity. 

Overall, pSTAKE’s Bitcoin liquid staking solution will mark a milestone in Bitcoin’s history, providing a safe, secure route to earn a native yield while retaining BTC liquidity. 

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