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BTC-BABY Co-Staking Guide

Before You Start​

Before starting co-staking, make sure you have:

Co-Staking Reward Calculator​

Want to know how much you can earn? Use our calculator to estimate your co-staking rewards:

👉 Jump to Calculator

What is Co-Staking?​

Co-staking allows you to earn extra rewards by staking both Bitcoin (BTC) and BABY tokens simultaneously. The more BABY you stake alongside your BTC, the more co-staking rewards you'll receive.

Key Benefits:

  • Earn additional 2.35% annual inflation rewards on top of regular BTC and BABY staking rewards
  • Maximize your returns by participating in both validation and finality provision
  • Support the Babylon network's security while earning more

Step-by-Step Guide to Co-Staking​

The Simple Flow​

Co-staking requires two simple steps that must use the same BABY address:

┌─────────────────────────────────────────────────────────────┐
│  Step 1: BTC → Finality Provider → ACTIVE                   │
│  ┌──────┐      ┌──────────────┐      ┌────────┐             │
│  │ BTC  │ ───> │ Finality     │ ───> │ ACTIVE │             │
│  │      │      │ Provider     │      │        │             │
│  └──────┘      └──────────────┘      └────────┘             │
│                                                             │
│  Step 2: BABY → Validator → ACTIVE                          │
│  ┌──────┐      ┌──────────┐      ┌────────┐                 │
│  │ BABY │ ───> │ Validator│ ───> │ ACTIVE │                 │
│  │      │      │          │      │        │                 │
│  └──────┘      └──────────┘      └────────┘                 │
│                                                             │
│  ⚠️  CRITICAL: Both must use the SAME BABY address!         │
└─────────────────────────────────────────────────────────────┘
⚠️ CRITICAL WARNING

Wrong Address = Zero Co-Staking Rewards!

If your BTC staking address and BABY staking address are different, you will receive ZERO co-staking rewards. Always ensure both delegations use the exact same BABY address.

Step 1: Stake Bitcoin (BTC)​

  1. Connect Your Wallet
  • Open the Babylon dashboard
  • Click "Connect Wallet" and select your wallet (Keplr, Cosmostation, etc.)
Dashboard Connect WalletDashboard Connect Wallet

  • Make sure you're connected to the Babylon network
  • ⚠️ Remember the BABY address you're using - you'll need the same address for Step 2!
  1. Choose a Finality Provider
  • Navigate to the BTC Staking section
BTC-Staking SectionBTC-Staking Section
  • Select an active Finality Provider from the available list
Choose Finality ProviderChoose Finality Provider
  • Consider factors like commission rate, uptime, and reputation
  1. Create a BTC Delegation
  • Specify the amount of BTC you want to stake
Enter BTC AmountEnter BTC Amount
  • Click "Preview"
Preview BTC StakingPreview BTC Staking
  • Complete the EOI (Expression of Interest) process
EOI ProcessEOI Process
  • Click "Stake BTC" and broadcast your BTC staking transaction.
Verified DelegationVerified Delegation
  1. Wait for Activation
  • Your delegation will move through these stages: PENDING → VERIFIED → ACTIVE
Activity StatusActivity Status
  • Monitor the status in the dashboard
  • Once ACTIVE, your BTC is providing security to the network and earning rewards

Step 2: Stake BABY Tokens​

Next, stake BABY tokens to CometBFT validators using the SAME BABY address as Step 1.

  1. Ensure Same Wallet Connection
  • Make sure you're still connected with the same wallet from Step 1
  • Verify the BABY address matches the one used for BTC staking
  • ⚠️ CRITICAL: The address must be EXACTLY the same!
  1. Choose a Validator
  • Navigate to the BABY Staking section in the dashboard
BABY Staking SectionBABY Staking Section
  • Select a CometBFT validator from the validator list
Validator SelectionValidator Selection
  • Consider commission rate, performance, and uptime
  1. Delegate BABY Tokens
  • Enter the amount of BABY you want to stake
Enter BABY AmountEnter BABY Amount
  • Click "Preview"
BABY Staking PreviewBABY Staking Preview
  • Review and confirm the delegation transaction
Review and ConfirmReview and Confirm
  1. Verify Your Delegation
  • Check that your BABY delegation is active in the dashboard
Review and ConfirmReview and Confirm

Step 3: Understand Co-Staking Rewards​

Co-staking rewards are calculated based on a weighted formula that considers both your BTC and BABY stakes.

The Formula​

For each co-staker, the weight is calculated as:

w = min(B_BABY / R, B_BTC)

Where:

  • B_BABY = Amount of BABY you have staked
  • B_BTC = Amount of BTC you have staked to active FPs
  • R = Co-staking factor = 20,000

This means: Every 20,000 BABY staked makes 1 BTC eligible for co-staking rewards.

Important: The weight can be any decimal value - you don't need at least 1 BTC or 20,000 BABY to earn rewards! Even small amounts will earn proportional rewards.

Optimal Ratio Visualization​

The best ratio for maximizing co-staking rewards is 20,000 BABY per 1 BTC:

BTC StakedOptimal BABYCo-Staking WeightEfficiency
0.1 BTC2,000 BABY0.1 BTC-equivalent100% ✅
0.5 BTC10,000 BABY0.5 BTC-equivalent100% ✅
1 BTC20,000 BABY1 BTC-equivalent100% ✅
1 BTC10,000 BABY0.5 BTC-equivalent50% ⚠️
1 BTC40,000 BABY1 BTC-equivalent100% ✅ (excess BABY)
6 BTC120,000 BABY6 BTC-equivalent100% ✅

Reward Distribution​

Your co-staking reward is calculated as:

Your Reward = Total Co-Staking Pool × (Your Weight / Total Weight of All Co-Stakers)

The total co-staking pool is 2.35% of annual inflation.

Step 4: Monitor Your Rewards​

  1. Check Your Co-Staking Status
  • Verify that both your BTC and BABY stakes are active
  1. Calculate Your Expected Rewards
  1. Withdraw Rewards

✅ One-Click Withdrawal! Co-staking rewards are automatically included when you withdraw BTC staking rewards.

Easiest way: Click the "Rewards" button in the dashboard!

Review and ConfirmReview and Confirm
  • Automatically withdraws:
  • ✅ BTC staking rewards
  • ✅ Co-staking rewards
  • One click to claim all related rewards!

Important Notes​

Requirements​

✅ Must have active BTC delegations to Finality Providers
✅ Must have active BABY delegations to CometBFT validators
✅ Must use the same BABY address for both BTC and BABY staking
✅ BTC delegations must be ACTIVE (not just VERIFIED)

Limitations​

⚠️ Commission cannot be charged on co-staking rewards due to Cosmos SDK limitations
⚠️ Rewards are proportional - more co-stakers means smaller individual rewards
⚠️ Optimal ratio - You need 20,000 BABY per BTC to maximize rewards

Common Misconceptions​

❌ Myth: "I need at least 1 BTC or 20,000 BABY to earn co-staking rewards"
✅ Reality: Any amount of BTC and BABY will earn rewards proportionally.
For example:

  • 0.1 BTC + 1,000 BABY = 0.05 BTC-equivalent weight
  • 0.5 BTC + 5,000 BABY = 0.25 BTC-equivalent weight
  • 0.01 BTC + 200 BABY = 0.01 BTC-equivalent weight

The formula works for any amounts - there's no minimum threshold!

❌ Myth: "If I delegate BABY to multiple validators, my co-staking rewards are calculated separately for each validator"
✅ Reality: All your BABY delegations are summed together for co-staking reward calculation, regardless of how many validators you delegate to.

How it works:

  • The system calculates your total BABY staked across all validators
  • All BABY delegations from the same address are combined
  • The co-staking weight formula uses your total BABY amount, not per-validator amounts

Example:

  • Alice has 1 BTC staked to a Finality Provider
  • Alice delegates BABY to 3 different validators:
  • 5,000 BABY to Validator A
  • 8,000 BABY to Validator B
  • 7,000 BABY to Validator C
  • Total BABY staked: 5,000 + 8,000 + 7,000 = 20,000 BABY
  • Co-staking weight: min(20,000 / 20,000, 1) = 1.0 BTC-equivalent ✅

Key Points:

  • ✅ You can delegate to multiple validators - all BABY counts toward co-staking
  • ✅ The system sums all your BABY delegations automatically
  • ✅ As long as all delegations use the same BABY address as your BTC staking, they all count
  • ✅ Diversifying across validators doesn't reduce your co-staking rewards

Tips for Maximizing Rewards​

  1. Balance Your Stakes: Aim for a ratio close to 20,000 BABY per BTC
  2. Monitor Network Participation: More co-stakers means rewards are shared more
  3. Keep Both Active: Ensure both BTC and BABY delegations remain active
  4. Use Same Address: Critical for eligibility

Co-Staking Reward Calculator​

Use the calculator below to estimate your co-staking rewards based on your current stakes.

Calculate Your Co-Staking Rewards

Data source: https://babylon-archive.nodes.guru/babylon/costaking/v1/current_rewards

Summary​

Co-staking is a powerful way to maximize your rewards on Babylon by participating in both Bitcoin staking and BABY staking simultaneously. Remember:

  1. ✅ Stake BTC to active Finality Providers
  2. ✅ Stake BABY to CometBFT validators
  3. ✅ Use the same BABY address for both (Critical!)
  4. ✅ Aim for ~20,000 BABY per BTC for optimal rewards
  5. ✅ Monitor and withdraw rewards regularly
  6. ✅ Click "Withdraw" in BTC Staking section to claim all rewards (including co-staking)

Start co-staking today and earn extra rewards while supporting the Babylon network!