#baby $BABY I went into Babylon assuming the biggest long-term question would be whether Bitcoin can secure PoS networks at scale.
After digging through the architecture, I found myself thinking about something else entirely.
As more BTC is staked, the protocol's security budget can grow without necessarily increasing demand for BABY itself. The network benefits from more Bitcoin securing it, while the value capture for the governance asset depends on entirely different incentives. That's an unusual economic split.
It's not necessarily a weakness. It may even be the cleanest way to avoid forcing Bitcoin into a governance role it was never designed for.
But it left me with a question I didn't expect to ask:
If the asset providing security and the asset capturing governance value keep drifting onto different economic paths, where does the protocol's long-term alignment actually come from?
@BabylonLabs_io
After digging through the architecture, I found myself thinking about something else entirely.
As more BTC is staked, the protocol's security budget can grow without necessarily increasing demand for BABY itself. The network benefits from more Bitcoin securing it, while the value capture for the governance asset depends on entirely different incentives. That's an unusual economic split.
It's not necessarily a weakness. It may even be the cleanest way to avoid forcing Bitcoin into a governance role it was never designed for.
But it left me with a question I didn't expect to ask:
If the asset providing security and the asset capturing governance value keep drifting onto different economic paths, where does the protocol's long-term alignment actually come from?
@BabylonLabs_io