Bitcoin holders stake $1.4 billion in Babylon's latest round

Babylon, a Bitcoin (CRYPTO:BTC) staking protocol, secured 23,000 BTC worth $1.4 billion during its second staking round on Tuesday. 

The round attracted significantly more Bitcoin than the initial staking event and avoided the network fee surges seen earlier.

Babylon co-founder and Stanford professor David Tse stated the Cap-2 round exceeded expectations, with Bitcoin holders locking in substantial amounts. 

Unlike the first round in August, where network fees spiked to $132 per transaction, Tuesday’s event saw more manageable fees, peaking at just $2.37. 

Tse credited the smoother experience to updated parameters for the staking process.

During the first staking event, Bitcoin transactions were limited to 0.5 BTC, and the cap on the total amount staked was 1,000 BTC, creating a competitive atmosphere that drove fees up. 

This time, users could stake an unlimited amount of Bitcoin within a 10-block window, though individual transactions were capped at 500 BTC, easing network congestion.

The project aims to build a two-sided marketplace using Bitcoin’s reserves. 

Users lock up their Bitcoin to earn rewards, while proof-of-stake networks leverage that capital to enhance their security.

Babylon’s long-term goal is to develop its own proof-of-stake network called Babylon Chain, which will serve as a coordination layer, enabling locked Bitcoin to secure other blockchain networks.

Babylon’s developers highlighted that they delayed the second staking round to improve security. 

“The first round was small for security reasons,” Tse explained, noting that they ran a bounty program to test the protocol’s resilience. 

The success of this second round points to more staking opportunities in the future.

Babylon also raised $70 million in funding in May, led by Paradigm, with additional support from Galaxy and Polychain Capital. 

This follows their earlier $18 million Series A round, solidifying the project's financial backing for further development.

At the time of writing, the Bitcoin price was $62,206.47.