Spent the afternoon digging into the co-staking numbers on Babylon instead of the marketing lines. @BabylonLabs_io
The dual-staking model is clear. Bitcoin goes to the Finality Providers. BABY goes to the regular CometBFT validators. To unlock the extra co-staking rewards you have to use the exact same BABY address for both sides.
The weight formula is simple and hard-coded: every 20,000 BABY makes one Bitcoin eligible for the co-staking pool. That pool takes 2.35 percent of the current roughly 5.5 percent annual inflation. The rest is split one percent to pure Bitcoin stakers and two percent to pure BABY stakers.
On paper it creates shared skin in the game. In practice the whole BABY token is still valued around 45 to 55 million dollars while the Bitcoin sitting in the staking vaults is measured in the billions. The asset that is supposed to give Bitcoin stakers deeper skin is worth less than one percent of the capital it is meant to secure.
Grabbed a glass of water and sat with that gap a bit longer. The design is elegant. The economic weight is still almost entirely on the Bitcoin side.
Still chewing on whether the co-staking rewards will ever pull enough BABY into the same addresses, or if Bitcoin just keeps carrying almost everything by itself.
#baby $BABY
The dual-staking model is clear. Bitcoin goes to the Finality Providers. BABY goes to the regular CometBFT validators. To unlock the extra co-staking rewards you have to use the exact same BABY address for both sides.
The weight formula is simple and hard-coded: every 20,000 BABY makes one Bitcoin eligible for the co-staking pool. That pool takes 2.35 percent of the current roughly 5.5 percent annual inflation. The rest is split one percent to pure Bitcoin stakers and two percent to pure BABY stakers.
On paper it creates shared skin in the game. In practice the whole BABY token is still valued around 45 to 55 million dollars while the Bitcoin sitting in the staking vaults is measured in the billions. The asset that is supposed to give Bitcoin stakers deeper skin is worth less than one percent of the capital it is meant to secure.
Grabbed a glass of water and sat with that gap a bit longer. The design is elegant. The economic weight is still almost entirely on the Bitcoin side.
Still chewing on whether the co-staking rewards will ever pull enough BABY into the same addresses, or if Bitcoin just keeps carrying almost everything by itself.
#baby $BABY