Bitcoin isn’t just for HODLing anymore, thanks to Babylon

Apr 15, 2025

Bitcoin is recognized as one of the most secure blockchain platforms available. Now, a new project called Babylon is making waves by tapping into Bitcoin’s rock-solid security. Babylon is a leading Bitcoin staking protocol that launched its own Layer 1 blockchain called Babylon Genesis along with its native token, $BABY, earlier this month. It has emerged as a major player aiming to bring staking to the Bitcoin world.

What is staking?

In the crypto world, staking is the process where token holders lock their tokens as an economic guarantee to help secure the network. In exchange for their staked assets, holders receive a reward, usually in the blockchain's native token.

…But Bitcoin doesn’t offer native staking

Bitcoin does not offer staking rewards because it operates on a different system called Proof-of-Work, which relies on mining to secure the network. This differs from blockchains like Ethereum or Solana, which run on Proof-of-Stake consensus mechanisms, where individuals can stake their tokens to help operate the network and earn rewards in return. Instead of staking, Bitcoin holders often choose to "HODL", a popular term that originated as a typo of "hold" and refers to buying and holding Bitcoin for the long term.

How is Babylon bringing staking to Bitcoin?

Babylon has introduced a way to bring staking to Bitcoin. Users can stake their idle Bitcoin on Babylon to secure and provide liquidity to other Proof-of-Stake (PoS) blockchain networks like Sui, which Babylon calls Bitcoin Secured Networks (BSNs), and generate yield for their users. In other words, Babylon is using Bitcoin’s highly secure blockchain to boost the liquidity and security of proof-of-stake blockchain networks. In return, it gives Bitcoin holders validation rewards from those networks.

Babylon is getting mass adoption

Since the launch of the Genesis chain and the $BABY token, the staking rewards are split 50:50 between Bitcoin stakers and BABY stakers. The Babylon Bitcoin staking protocol went live in August 2024, but since then, it has attracted the largest share of Bitcoin staked, or in crypto-native terms, “total value locked” (TVL), than any other project. Approximately 78% of Bitcoin's total value locked (TVL) is held in Babylon, highlighting its strong adoption and market dominance.

Why does Bitcoin staking matter?

There is an increasing trend to make Bitcoin more useful than just something you hold and store. Unlike Ethereum, where a significant portion of the supply is actively utilized in decentralized apps to earn rewards, most Bitcoin remains in wallets and is not being put to work. Projects like Babylon aim to unlock new use cases for Bitcoin.

In the past two years, many projects have emerged, such as Bitcoin scalability solutions, or Layer 2s, which address Bitcoin's limited smart contract capabilities to allow similar yield-generating applications, such as those on Ethereum and Solana. Bitcoin now has over 80 scalability solutions and more projects building the necessary infrastructure, such as stablecoins, applications, and NFTs, to mention a few examples, enhancing Bitcoin’s technology and deepening liquidity.

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