Babylon’s core business uses BTC for settlement—so what exactly is the BABY token for?
I’ve been thinking about a question: Babylon’s TVL has already broken $6 billion. It’s the leader in the BTC staking sector—so shouldn’t its token, BABY, be extremely valuable?
After going through the whitepaper and community discussions, though, I realized I was thinking about it the wrong way.
Babylon’s core business—Bitcoin timestamping and finality verification—doesn’t use BABY to pay the gas fees at all. When BTC stakers lock their BTC, they pay the native BTC network fees on Bitcoin. When PoS chains purchase the security service, they pay either in BTC or in the native token of that PoS chain.
This creates an awkward problem: Babylon’s most essential commercial activity doesn’t actually require using its own native token as the settlement medium. For the institutions and chains that truly use Babylon’s services, BABY is optional.
So what is BABY really for? Governance voting? Incentivizing validators? These are indeed use cases—but the issue is that the token demand generated by these purposes doesn’t match Babylon’s real business scale at all.
Someone might say, “A Finality Provider must stake BABY to get the right to delegate BTC.” But even with this hybrid staking mechanism, a Finality Provider’s demand for BABY is basically one-time—you stake once and that’s enough. You don’t need to keep buying it. That makes it hard to support long-term buy pressure.@BabylonLabs_io
BABY’s current narrative relies heavily on concept speculation rather than on real business capture. In a system where all business is settled using BTC, how much value can a purely governance token retain once the tide goes out?
Babylon’s technology is definitely cutting-edge, but “technically impressive” and “valuable token” are two different things. Valuations built on technology still ultimately need to be sustained through real token consumption. If the protocol’s most fundamental value flows never go through its own token, then what exactly anchors the token’s value?
When one day BABY actually finds an irreplaceable position in Babylon’s economic model, I’ll reassess its value again. For now, I can only say: the technology is great—but as for BABY’s role, I still don’t fully understand it.
#baby $BABY
I’ve been thinking about a question: Babylon’s TVL has already broken $6 billion. It’s the leader in the BTC staking sector—so shouldn’t its token, BABY, be extremely valuable?
After going through the whitepaper and community discussions, though, I realized I was thinking about it the wrong way.
Babylon’s core business—Bitcoin timestamping and finality verification—doesn’t use BABY to pay the gas fees at all. When BTC stakers lock their BTC, they pay the native BTC network fees on Bitcoin. When PoS chains purchase the security service, they pay either in BTC or in the native token of that PoS chain.
This creates an awkward problem: Babylon’s most essential commercial activity doesn’t actually require using its own native token as the settlement medium. For the institutions and chains that truly use Babylon’s services, BABY is optional.
So what is BABY really for? Governance voting? Incentivizing validators? These are indeed use cases—but the issue is that the token demand generated by these purposes doesn’t match Babylon’s real business scale at all.
Someone might say, “A Finality Provider must stake BABY to get the right to delegate BTC.” But even with this hybrid staking mechanism, a Finality Provider’s demand for BABY is basically one-time—you stake once and that’s enough. You don’t need to keep buying it. That makes it hard to support long-term buy pressure.@BabylonLabs_io
BABY’s current narrative relies heavily on concept speculation rather than on real business capture. In a system where all business is settled using BTC, how much value can a purely governance token retain once the tide goes out?
Babylon’s technology is definitely cutting-edge, but “technically impressive” and “valuable token” are two different things. Valuations built on technology still ultimately need to be sustained through real token consumption. If the protocol’s most fundamental value flows never go through its own token, then what exactly anchors the token’s value?
When one day BABY actually finds an irreplaceable position in Babylon’s economic model, I’ll reassess its value again. For now, I can only say: the technology is great—but as for BABY’s role, I still don’t fully understand it.
#baby $BABY