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Staking BABY on Babylon

BABY staking is a native staking mechanism that secures the Babylon Genesis - the first Bitcoin Secured Network and a Proof of Stake chain. This allows token holders to delegate to a chain validator to accrue inflationary rewards proportional to their stake. Alongside BTC staking on Finality Providers of Babylon Genesis, it contributes to the chain’s security and decentralization.

Benefits of BABY Staking​

By staking BABY tokens, the delegator can:

  • Earn rewards: Receive a portion of the annual inflation allocated to BABY stakers.
  • Secure the network: Contribute to the Babylon Genesis chain's security and decentralization.
  • Fast unbonding: Access a significantly reduced unbonding period of approximately 2 days compared to the typical 21 days in most PoS chains.
  • Governance participation: BABY staking gives stakers voting power in the chain’s governance to help shape the future of the network.

The Staking Process​

When you have acquired BABY and decide to stake your BABY tokens, the general process is as follows:

  1. Submission: You send a BABY staking request through supported wallets.
  2. Confirmation: The system confirms it received your request.
  3. Queuing: Your request joins the queue, waiting for the current epoch to end.
  4. Funds Status: Important: Your funds remain available in your wallet until the epoch ends.

More on the staking mechanism can be found here.

Slashing Conditions​

Like all staking operations, BABY staking carries certain risks that delegators should understand.

  • Staked validators can only be slashed for double signing, which means proposing two different blocks at the same height (considered a severe security violation).
  • When slashing occurs, 5% of the delegated tokens are slashed, while the remaining 95% are returned to the BABY delegator.

Babylon implements several measures to protect BABY delegators:

  • On-chain Records: All slashing events are recorded on-chain and visible through explorers. Validator slashing history is publicly available to inform delegation decisions.
  • Partial Slashing: Calibrated slashing parameters in percentage help protect delegators from catastrophic loss.

More on the slashing conditions can be found here.

Fast Unbonding​

Babylon Genesis employs the Bitcoin Timestamping protocol, which enables a fast unbonding process:

Unbonding Initiation:​

  • Delegator submits an unbonding request transaction.
  • Request is queued for processing at the epoch boundary.
  • At epoch conclusion, the token delegation status changes to "unbonding".

Bitcoin Checkpoint Verification:​

  • The protocol commits a cryptographic hash of the Babylon Genesis chain state to the Bitcoin blockchain.
  • The system monitors the Bitcoin chain for confirmation of the block that contains the checkpoint.
  • Required confirmation depth: 300 Bitcoin blocks (~2 days).

Token Release:​

  • Once Bitcoin confirmations reach the required threshold, tokens are automatically released and returned to the delegator.
  • Released tokens become fully liquid and transferable; there are no more restrictions.

More on fast unbonding process here.

Relationship with Bitcoin Staking​

BABY staking operates alongside Babylon's Bitcoin Staking Protocol. Both mechanisms contribute to securing the Babylon Genesis chain.Staking natively allows Babylon Genesis validators to validate chain information, while BTC staking allows Babylon Genesis Finality Providers to do the same.

This dual-staking model is the foundation of Babylon’s Bitcoin Secured Network model, combining the robustness of Bitcoin with the efficiency of Proof of Stake consensus.

Bitcoin staking delegators earn BABY rewards from a separate annual inflation figure. However, they do not participate in the governance of Babylon Genesis.

More information on governance can be found here.

This overview provides the foundation for understanding BABY staking. The following sections will delve deeper into specific mechanisms, the unique fast unbonding process, and practical guides to getting started with BABY staking.