Babylon’s Bitcoin Staking Surges with $1.5 Billion in Second Round

Growing interest in DeFi applications on Bitcoin’s blockchain is reflected in Babylon’s successful second staking round.

On October 8, 2024, Babylon, a Bitcoin staking platform, concluded its second staking round with remarkable results, drawing in approximately 24,000 BTC, equivalent to $1.5 billion. This represents a sharp increase from its first staking round, indicating burgeoning interest in decentralized finance (DeFi) applications built on the Bitcoin blockchain.

Babylon's platform, which aims to integrate Bitcoin’s robust security with new decentralized protocols, has rapidly gained traction within the cryptocurrency community. In its second round, deposits surged from around 1,000 BTC to 24,000 BTC in just over an hour. The event, known as "Cap-2," lasted for 10 Bitcoin blocks—a process that took roughly one hour and 23 minutes to complete, with a cap of 500 BTC per transaction.

David Tse, Babylon’s co-founder and a professor of engineering at Stanford University, expressed his surprise at the volume of participation. “The inflows were way beyond our expectations,” Tse remarked in an email to CoinDesk. By 20:03 UTC (4:03 p.m. ET) on the day of the event, Babylon’s staking dashboard revealed that 18,601 BTC had already been staked, with an additional 5,419 BTC in the staking queue, pushing the total to around $1.5 billion.

This success marks a significant shift from Babylon’s inaugural staking round in August 2024, where the limit was set at 1,000 BTC, which was filled in a little over an hour. The second round’s higher cap and swift deposits highlight the growing demand for decentralized applications on the Bitcoin blockchain.

Babylon’s platform is designed to enable proof-of-stake (PoS) chains to tap into Bitcoin’s vast reserves, offering a way to bridge Bitcoin’s traditional role as a store of value with the dynamic possibilities of decentralized finance. By introducing staking to Bitcoin, Babylon seeks to expand the cryptocurrency’s utility into areas typically dominated by networks like Ethereum and Solana.

The platform’s rising prominence is part of a broader trend in the crypto industry, where Bitcoin’s security and reputation are being leveraged to build DeFi ecosystems. The substantial inflows during Babylon’s second round suggest that there is a strong appetite for extending Bitcoin’s capabilities beyond its primary use as a medium of exchange or a store of value.

Babylon’s growing stature within the cryptocurrency space has been bolstered by significant investments. In May 2024, the project secured $70 million in funding, following an earlier round of $18 million in December 2023. These investments underscore the enthusiasm for projects that seek to broaden Bitcoin’s role in the expanding blockchain and DeFi landscapes.

Babylon’s model offers Bitcoin holders an opportunity to stake their BTC in exchange for participating in newer blockchain protocols, effectively creating a bridge between the established security of Bitcoin and the innovative possibilities of decentralized applications. This fusion of traditional and emerging blockchain technologies could open new doors for both Bitcoin investors and the broader crypto community as DeFi continues to evolve.

photo source / Blockonome