Users maxed out Babylon’s 1,000 BTC deposit limit within four hours despite the protocol limiting transfers to 0.05 BTC per transaction.
Bitcoin transaction fees have jumped to their highest level since June amid the mainnet launch of Babylon, a Cosmos-based Bitcoin staking protocol.
Babylon commenced its mainnet rollout on Aug. 22, allowing users to deposit Bitcoin for staking to secure Proof of Stake (PoS) networks. Babylon’s initial cap of 1,000 BTC ($61 million) was filled less than three-and-a-half hours after the launch, signposting significant demand for its Bitcoin staking service.
“Self-custodial Bitcoin staking has finally been unlocked,” Babylon tweeted. “The Babylon Bitcoin staking mainnet launch leads to the third native use case for Bitcoin… alongside value storage and simple payments: staking to secure PoS networks and earn rewards.”
Average Bitcoin transaction fees surged as BTC holders raced to secure an allocation, with fees increasing by more than 10 times to $7.68 from $0.74 the day before, according to Ycharts.
Users were limited to 0.05 BTC per transaction in a bid to foster broad participation, contributing to the jump in transaction congestion.
Bitcoin transaction fees. Source: Ycharts.
Babylon’s mainnet rollout
The launch marks the first phase of Babylon’s phased rollout, with users preparing the protocol’s PoS consensus validation mechanism by locking up BTC. While users will not earn staking rewards during the initial phase, depositors will receive points — suggesting that the project plans to airdrop a token to early adopters in the future.
The project will next activate the consensus mechanism alongside the launch of the Babylon PoS chain. The chain will activate Babylon’s Bitcoin timestamping protocol, enabling critical infrastructure for the service in the form of cross-chain synchronization.
The Babylon Bitcoin staking protocol will then evolve into a marketplace for shared security backed by BTC, enabling any PoS system to leverage its consensus layer for security. Users will be able to stake the same BTC across multiple PoS systems simultaneously to stack rewards.
Babylon is currently secured by a six-of-nine multisig wallet. Babylon Labs, the team behind Babylon, holds three of the keys, while the prominent web3 projects AltLayer, CoinSummer Labs, Cubist, Informal Systems, RockX, and Zellic each hold one key.
Bitcoin’s burgeoning staking sector
Several Bitcoin restaking projects have already inked partnerships with Babylon, including Mind Network, Lorenzo, and Bedrock.
However, Babylon isn’t the only project targeting staking use cases for Bitcoin.
The total value locked in Core, a Bitcoin Layer 2 network, has rocketed to rank second among Bitcoin L2s and sidechains by total valued locked (TVL) following the launch of Pell Network, a Bitcoin restaking protocol. Core’s TVL doubled in the past 30 days, following the deployment, with Pell already accounting for 48% of Core’s $314 million TVL to rank as its largest DeFi protocol, according to DeFi Llama.
Pell currently hosts a $328.9 million TVL across 12 chains.
BounceBit also ranks as the seventh-largest network in Bitcoin’s broader ecosystem with $62.1 million since launching on mainnet in May. The network uses a dual-token PoS mechanism secured by both BTC and its native BB token.
The price of BTC is up 1.8% over the past 24 hours, according to The Defiant’s crypto price feeds.
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