I spent more time looking at Babylon's unbonding queue than I expected.
Most of the conversation around $BABY @BabylonLabs_io focuses on "Bitcoin staking is finally here." What doesn't get nearly as much attention is the exit.
Babylon lets you stake BTC without handing it to a custodian, which is a big part of the appeal. The flip side is that leaving isn't instant. The unbonding period is built into the design, so for a while your BTC is unlocked from staking but not yet spendable.
I get the reasoning. That's the tradeoff for building around Bitcoin's scripting model instead of wrapping BTC or relying on a trusted intermediary. I don't see it as a design flaw.
What I do think gets overlooked is how people size positions. It's easy to assume you'll be able to react if market conditions change. Then you remember your exit has a fixed delay, and that changes the liquidity profile #baby more than many people seem to account for.
My guess is most people only really appreciate that friction after they've already staked.
I'm curious whether that changes behavior over time. As more people go through a full staking cycle, do position sizes become more conservative, or does the yield end up outweighing the liquidity tradeoff anyway?
Most of the conversation around $BABY @BabylonLabs_io focuses on "Bitcoin staking is finally here." What doesn't get nearly as much attention is the exit.
Babylon lets you stake BTC without handing it to a custodian, which is a big part of the appeal. The flip side is that leaving isn't instant. The unbonding period is built into the design, so for a while your BTC is unlocked from staking but not yet spendable.
I get the reasoning. That's the tradeoff for building around Bitcoin's scripting model instead of wrapping BTC or relying on a trusted intermediary. I don't see it as a design flaw.
What I do think gets overlooked is how people size positions. It's easy to assume you'll be able to react if market conditions change. Then you remember your exit has a fixed delay, and that changes the liquidity profile #baby more than many people seem to account for.
My guess is most people only really appreciate that friction after they've already staked.
I'm curious whether that changes behavior over time. As more people go through a full staking cycle, do position sizes become more conservative, or does the yield end up outweighing the liquidity tradeoff anyway?