Rewarding BTC Stakers Who Also Stake BABY Fairly

📜 Proposals 🗣️ Text Proposals
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Rewarding BTC Stakers Who Also Stake BABY Fairly

1. Context

The Babylon community and ecosystem projects are concerned that many BTC stakers are simply collecting and selling BABY staking rewards without actively contributing to the Babylon ecosystem. This behaviour does not help accrue value and poses a risk to the sustainability of the ecosystem.

To address this concern and improve fairness, the Babylon protocol should evolve towards the direction in which active BTC stakers receive more rewards than passive BTC stakers.

This post proposes two mechanisms under this direction, where “activity“ is measured through BABY staking:

  1. Multi-staking eligibility cap: when Babylon BTC multi-staking is launched, the amount of BTC allowed to multi-stake (and earn more rewards) could be capped, and BTC stakers compete for quota of this cap through their BABY staking contributions (i.e. providing also validation services instead of participating only in the finality round).

  2. Co-staking rewards: change the annual inflation distribution protocol parameter

    • from: 4% inflation going to BABY stakers and 4% inflation going to BTC stakers,

    • to: 3% inflation going to BABY stakers, 3% inflation going to BTC stakers. On top of this, 2% going to those who stake both BABY and BTC.

In the rest of this post, we will provide more details about these two mechanisms to help the community evaluate them.

The goal of this post is to collect community feedback on:

  1. this direction of rewarding active BTC stakers more fairly, and

  2. each of these two mechanisms.

If the community is supportive, formal signalling governance proposal(s) will be submitted to seek the community’s approval on the implementation and execution plans of these mechanisms.

2. Multi-Staking Eligibility Cap

2.1 Brief introduction to multi-staking

The upcoming Babylon BTC multi-staking launch will allow one bitcoin to be staked and supercharge multiple networks (a.k.a., BSNs, potentially including both Ethereum roll-ups and Cosmos chains). In return, BSNs provide staking rewards to BTC stakers in exchange for the additional validation services (the finality round). BTC stakers are free to decide whether they want to do multi-staking or which chains they want to help secure.

Existing BTC stakes (i.e., those securing Babylon Genesis) can directly multi-stake by spending the existing staking UTXO with a new multi-staking BTC transaction without needing to unbond first.

In short, Babylon BTC multi-staking will allow one bitcoin to actively secure more networks and have more reward streams.

2.2 The Proposal

  • Introduce a three-month initial trial period starting from the launch of multi-staking, during which only 25,000 BTC would be allowed to multi-stake if the proposal passes.

  • Only BTC staked before 1st Sep 2025 will be eligible for this cap. Newer stakes will not be eligible.

  • Each BTC staker with eligible BTC stakes is given a fixed quota of this cap based on their BABY staking contribution. The more BABY they stake, and the longer they stake, the higher quota they get. The mechanism is designed to be a fair reflection of the contributions towards the network security.

  • Of note, BTC single-staking to secure Babylon Genesis continues to be allowed and is not affected.

This way, long-term BTC stakers who contribute to Babylon ecosystem will be rewarded more fairly.

Simply put, BTC stakers who want to participate in multi-staking upon its launch should:

  • stake BTC before 1st Sep 2025, and keep the existing stakes staked.

  • stake BABY to get a share of the quota. The more and longer you stake, the higher staking quota you could get.

2.3 BABY-staking based quota

A BTC staker is identified by the BABY address they registered to collect BABY staking rewards. Each BTC staker/BABY address may have multiple BTC stakes associated with them. A BTC staker is eligible if it has at least one active BTC stake staked before 1st Sep 2025.

The BABY staking contribution of a BTC staker is measured by a simple point system used for calculation purposes only: Starting from the mainnet launch (10th April 2025), each BABY staked per day equals one point. Here “stake“ includes both directly staking to the Babylon Genesis chain, and liquid-staking to one of the Babylon-based liquid staking projects (Cube by Satlayer, Escher, Milkyway).

A programmatic snapshot can be taken 2 weeks before the multi-staking launch to compute the final points of every eligible BTC staker and the total points across them. Each eligible BTC staker’s multi-stake quota (in % terms) is equal to the ratio between their points to the total points.

If an eligible BTC staker is given a higher quota than their total eligible BTC stake, the excess will be shared with other eligible BTC stakers proportionally.

For example, assume both Alice and Bob staked 1000 BABY for 100 days until the snapshot date. Then their final points are both 100K. Assume the total points across all eligible BTC stakers are 100M, then both Alice and Bob have a fixed percentage of the quota - 0.1%, or 25 BTC.

Assume Alice has 2 eligible stakes with a value of 10 BTC and 5 BTC, respectively, Then Alice can multi-stake both. The excess 25-10-5=10 BTC quota will be shared with other eligible BTC stakers.

Assume Bob has 3 eligible stakes with a value of 12 BTC, 10 BTC, 8 BTC, respectively. Bob can surely multi-stake 12+10=22 BTC. He might potentially also be able to multi-stake his 8 BTC if there is enough free quota from other participants like Alice.

The whole process and the above logic will be fair, transparent and automated (self-executing).

3. Co-Staking Rewards

Currently, BABY has an annual inflation of 8%. 4% is shared by all BABY stakers, and 4% is shared by all BTC stakers.

With this co-staking proposal:

  • 3% is shared by all BABY stakers

  • 3% is shared by all BTC stakers

  • on top of the above, 2% is shared by those who staked both BABY and BTC

Below is the proposed mechanism to distribute this 2%.

For each unit time, let X be the amount of BTC a co-staker has staked, let Y be the amount of BABY this co-staker has staked. Then the weight of this co-staker is computed as X * Y^a, where parameter a affects the optimal staking ratio between BTC and BABY.

Let R be the actual inflation from the 2% during this unit time. The portion of R this co-staker will get is proportional to its weight w.r.t. the total weights across all co-stakers.

4. Final Remark

The goal of this post is to collect community feedback on:

  1. this direction of rewarding active BTC stakers more fairly, and

  2. each of these two proposals.

This will guide Babylon Labs, the software development team behind the Babylon system, as well as other developers that want to contribute, on the developments.

All numbers are tentative and can change.

Submitted by: [Fisher Yu/Babylon Labs]
Date: [2025-08-01]
Contact: [[email protected]]

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Hi @baby_fisherman

Great ideas! We certainly don’t want to repeat what happened to Celestia.

I am in favour of 3 month initial trial period idea.

As for second I would go even more in favour of both stakers:

2% BTC stakers

2% BABY stakers

4% BOTH stakers

I still fear that any staking model is mostly opportunity for many to be selling rewards. And I don’t know what could be done to prevent the high percentage of people that sell rewards. Do we have that data maybe?

Maybe different time period locking mechanism would work?

Or what if certain ammount of BABY staked like Tiers+Time locks (example >1000, >10000, >100000….+ 30 days, 90 days, 360 days….) could increase any potential value to rewards revenue from 8% staking pool. That was maybe >1000 BABY staked but locked for 360 days could equal >10000 staked for 90 days(this is just random numbers) I wouldn’t want to overcomplicate things and definitely not make it wrong for larger stakers just so that everyone has a choce to increase your score=share of rewards.

Those who restake keep the score to others it resets.

Problem is usually with whales staking, that masively sell their staking rewards and pose a long term risk to like you very well said sustainibility to the ecosystem.

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Hi SasoLithops, thanks a lot for your well elaborated suggestions!

Quick question first: which aspect(s) of Celestia you don’t want us to repeat? Celestia has taken many actions. Are you referring to that they allow investors to stake locked tokens and sell staking rewards? On this regard, Babylon foundation has already banned investors and team members from BABY staking for the first year.

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The story they had with Polychain capital. They were masively selling staking rewards and Celestia Foundation had to buy back their entire staked TIA tokens (more then 43M).

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Yeah we are aware of it, so Babylon Foundation disallowed investors and team members from staking at all in year-1.

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Hey @baby_fisherman , it’s Ohad from Escher Finance again.

I really appreciate the post — you’re raising an important and timely point. Reducing inflation and APR is a great start, and it will likely ease some short-term pressure. But I worry it won’t be enough on its own. The deeper challenge is structural: the current setup doesn’t create meaningful incentives to hold or engage with BABY beyond farming and selling.

After speaking with nearly every BTC LST provider, the general sentiment is that they see this as “free money.” They’re getting access to an amazing product, but they’re not being charged for it — or at least not enough to reflect the value.

Reducing inflation and, in turn, APR might lower some of the selling pressure, but it doesn’t actually address the incentive structure. It won’t stop the sell pressure or change the fundamental behavior. A more effective solution could be something like multi-staking — giving users more value if they hold BABY while staking BTC. If they don’t see any value in BABY, then they’ll never care to hold or stake more of it — it becomes a one-way extraction.

At Escher, we believe that the only sustainable path is for the token to have real utility in a working DeFi ecosystem. Right now, BABY lacks that. For example, users can’t even borrow against their BABY — so they have no choice but to sell it. Introducing vaults, lending options, and other use cases could greatly strengthen the token’s value.

Another solution could be to introduce fees tied to utility. For instance, BTC stakers could be required to stake a minimum amount of BABY, or pay a small monthly fee in BTC that’s used to buy BABY as a commission. Yes, they might still earn BABY as a reward — but having to pay something to use the product reinforces its value.

Even a small fee — say 0.01% to 0.1% — on the $5B+ in BTC value could be used to buy and burn BABY, which would have a massive long-term impact.

In other words, value can be created through usage and cost — not just inflationary rewards.

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Hi BabyFisherman,

Caliber supports this proposal. The co-staking rewards proposal seems like a good move to us that helps align better the interest of both BABY & BTC stakers!

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Hi Ohad, Thanks a lot!

Appreciated your intel about BTC LSTs. Yes I am aware of it. This is why I would like to propose to give BTC stakers who also stake BABY more rewards than those who don’t. Not just reduce inflati

One of the proposals in the post is to only allow BTC stakers who have staked BABY to do multi-staking for a few months, does it fall into your description?

For example, users can’t even borrow against their BABY — so they have no choice but to sell it. Introducing vaults, lending options, and other use cases could greatly strengthen the token’s value.

Agreed. This is mainly due to that Babylon Genesis only has CosmWasm smart contract. So we are working hard on adding EVM! I believe Escher is working on BABY lending, right? That will be a key to activate BABY DeFi utility.

BTC stakers could be required to stake a minimum amount of BABY

This seems an extreme version of the second proposal in the post, where only co-stakers and BABY stakers get the staking rewards, while someone who only stake BTC gets nothing. This makes sense. But for now, we should give BTC-only-stakers something, because it will take institutional stakers some time to approve BABY staking.

pay a small monthly fee in BTC that’s used to buy BABY as a commission

Indeed, this model makes a lot of sense for our trustless Bitcoin vault based products (Escher will be a great collaborator)! For staking it might be a bit fetched because 1) paying commission in BTC has technical difficulty due to the lack of trustless BTC bridge and 2) net reward = actual reward - fee, so reducing the actual reward may achieve similar result with zero engineering effort.

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Thanks for the response! @baby_fisherman

It could be nice, but it doesn’t really solve the problem—in some scenarios it could even make price discovery worse. I still need to run some numbers on it to see what the situation really is.

We’re working on this across several use cases—the most interesting is looping BTC with BABY to create a direct correlation between them. In the meantime, we suggested to the Babylon team that we deploy on an Ethereum lending market. That could be a cheaper on-ramp for new users ahead of the EVM launch. Once a lending market exists on Babylon, it’ll likely be more expensive (you’ll need to incentivize liquidity across multiple assets). If we launch now, we can attract users and liquidity, then migrate once the product proves itself. Just my opinion.

Yes, we’re reading the whitepaper now and exploring what we can build on top of it.

To be precise, I’m talking specifically about BTC LSTs. With strong institutional onboarding, you can offer the best BTC-native DeFi product—not just simple “stake BTC and stop.” Your product moved beyond basic staking a while ago; the main value in BTC DeFi is putting BTC to work. Of course, users who benefit should pay a fee. The core equation should be:

net reward = BABY rewards + DeFi yield − fees(BABY payment/BTC payment)

That model is much more effective.

If you want I am happy to jump over for a call on that

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Hi @baby_fisherman

“Rewarding BTC stakers who also stake baby fairly” is not really the problem that needs to be solved. The real problem is how to incentivize stakers like myself to not immediately sell Baby which devalues the coin and which may, if not stopped, put the coin in a death spiral and kill the project. The proposal in it’s current form I don’t believe solves this problem. Personally, I will now stake both baby and BTC which will temporarily stop the coin devaluing, but then I will proceed to liquidate the baby yield on both Baby and btc stakes for btc and the spiral will continue .

This project is being sold as “earn a yield on your BTC”. Stacks(stx) has the same marketing but the yield on staked BTC on stx is effectively in BTC where the yield on staked BTC on Babylon is in Baby, a coin with unlimited supply and high inflation which means it will devalue. The only way for me to achieve a BTC yield on the Babylon network is to immediately liquidate Baby for BTC. It’s quite clear that the vast majority of people are doing this .

To solve this problem I believe you need to take a leaf out of btc’s playbook. In order to maintain your yield as a miner you have to continually invest part of your yield to buy more miners. A similar mechanism can be used on the Babylon network with the following rules.

Staked BTC holders earn 3.5% in baby IF AND ONLY IF they stake an amount of 10% of the BTC value in Baby. To be clear if 1 BTC is Staked then 0.1 BTC worth of baby needs to be staked. Staked baby earns a further 0.5%. If a staker fails to maintain this ratio his yield is forfeited until such time as the BTC/baby ratio meets the requirements. In order to determine the amount of Baby to stake the BTC/baby exchange rate can change every epoch or once again to copy BTC the BTC/baby rate changes every 2 weeks to smooth volatility. This mechanism creates a “soft peg” of baby/BTC. If BTC goes up in order to earn a yield you need to invest/stake more Baby. If BTC goes down you need less Baby. It’s a similar mechanism to bitcoin difficulty adjustments . There will now be situations where the FP doesn’t distribute baby because the staking requirements have not been met. 50% of that undistributed baby should be given to the FP (this will incentivize more fp) and the other 50% should be burnt (a deflationary mechanism). Over time the percentage burnt should increase and the percentage given to the FP decrease. I believe this is way easier to implement than the auction method of burning baby as in the other proposal to introduce deflation

While I am on this rant. I don’t understand the point of not capping the supply. How can you earn a BTC yield ( a coin with a capped supply) by issuing the rewards with a coin with an uncapped supply. Just work out what the Baby supply would be in 10 years time given the proposed inflation rate and cap it at that number. I know the rationale of having an uncapped supply is supposedly to maintain low fees, but the same can be achieved by reducing fees overtime as a function of the average number of transactions If the fee is now 0.1 baby for a transaction the fee can be 0.01 if the transaction volume increases 10x , it seems counter intuitive to try achieve this with an unlimited coin supply. There are other ways to maintain low fees other than with an unlimited coin supply.

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Hi @Lf8888888 thank you so much for your deep thoughts! Your care about the project is highly appreciated!

I believe this is way easier to implement than the auction method of burning baby as in the other proposal to introduce deflation

Just a small clarification on this: the auction-based deflation is about BSN rewards, not the BABY reward itself.

I agree with you that the current inflation is high. So I am thinking about something like the following:

  1. total inflation reduced from 8% to 6%
  2. BTC stakers gets 1.5%, BABY stakers get 1.5%
  3. Co-stakers get extra 3%

While it is a great idea to tie the amount of co-staked BABY to the BTC and BABY price, this requires a price oracle which may introduce unwanted attack vector. I will discuss with the team and see what can we do.

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Hi

Thanks for getting back to me, I am also available on Whatsapp at +27832750616 where I am usually more responsive.

I need to understand the attack vector you are talking about because I can’t visualize it. Bottom line you are offering a reward that has no value unless you convert it to something that does by selling it. I don’t know if you are old enough but when I was a kid, you could go to the gaming arcades , give money and get rewarded for winning in tokens. Every single kid would convert the tokens back to cash because the tokens had no value outside the ecosystem. This is exactly why people are selling baby. You have to peg it to something that has value hence my a suggestion to peg it to btc by making it a requirement to earn further yield. To take it back to the gaming scenario, if kids had to present 10% of the tokens in order to play again in the future they would not convert all their winnings. those tokens would now have value because new adopters would need gaming tokens in order to be able to play at the arcade. So if you have a requirement of baby staking as a function of btc value staked you create value for baby using the same economic incentive.I think you see this too.

With respect to the btc/baby oracle, please read the stx white paper.

Btc/stx pair is placed on chain and the chain is the oracle. Here is the relevant section:

"Like PoW, PoX is permissionless: Anyone can be a Stacks miner, as long as they are willing
to spend BTC. Also, any STX holder can lock their STX (called “stacking”) to participate in
PoX consensus, and earn Bitcoin rewards for doing useful work for the system, i.e., for being a
signatory for the decentralized Bitcoin peg. In keeping with Bitcoin ethos, Stackers are
rewarded for their positive contributions to the system and inhibited by economic disincentives
from behaving poorly (but unlike in bonded Proof of Stake systems, they are not “slashed”).
Finally, the nature of PoX consensus is such that the price ratio between BTC and STX is
continually recorded and available on-chain, serving as an on-chain Bitcoin price oracle. This is
valuable for the decentralized peg, removing the need for an external oracle, as described in the
companion paper about the peg.

I can see how an attack vector can be introduced if you rely on an external oracle, but not if you rely on one on chain.
With a btc/baby on chain oracle stakers would only liquidate baby if there was an arbitrage opportunity and the market price for baby was higher than the on chain oracle. Bottom line a btc/baby on chain oracle coupled with a yield being achievable if and only if you stake baby as a set percentage of the value of btc you create value for baby by pegging it to btc.

I am sorry to say dual staking without a pegging mechanism doesn’t create value for baby it is just an administrative hurdle. To the arcade game analogy it’s like saying I can only liquidate half my tokens at the arcade - that is an administrative hurdle- I will give it to my friend to liquidate the other half. The only reason for me not to liquidate my tokens is because I want to play again at the arcade some time in the future. Similarly I want to earn yield on my btc and the only way I can do that is to stake baby. If I happen to get other tokens in addition to baby I will liquidate those but not my baby token. I will only liquidate baby when it appreciates disproportionately to btc or I will liquidate baby when I close my btc staking position

Another note. Keeping btc/baby as an on chain oracle that changes after 2 weeks (however many epochs that might be) is analogous to Bitcoin difficulty adjustments. If the market price for baby is less than the on chain oracle price, I am going to be buying baby on market as it is “easier” for me to stake more btc immediately by buying on market as opposed to waiting for more baby rewards.

I am pretty convinced this mechanism works. But maybe there is an attack vector that I am missing.

I really think you have a great project, but I have seen many great projects fail because the tokenomics don’t work . A fundamental part of tokenomics is to give the token value outside of converting it to usd. Bitcoin does this by linking the token value to the cost of electricity required to make a new coin.

I am happy to workshop this further with you and your team because I would hate to see this project fail because of tokenomics. All the other stuff you have right.

Regards
Laurie

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Based on everyone’s feedback, plus the invention of trustless Bitcoin vault, I created a new proposal.

This will be the first critical change to BABY tokenomics towards the goal of “higher adoption leads to more value accrued to BABY”. So I would like to share it under this thread for a more informal discussion. Once there is consensus, I will create a separate formal forum post for on-chain voting.

The Context

Babylon is building native use cases for Bitcoin. It makes Bitcoin productive, trustlessly.

Babylon Bitcoin staking / multi-staking is the first such use case, allowing native Bitcoin to provide proof-of-stake security to any blockchains and roll-ups and earn staking rewards. There is no wrapping or bridging needed.

The recent invention, trustless Bitcoin vaults, is even more significant: They allow native Bitcoin to participate in any smart contract DeFi on any blockchains and roll-ups. Again, without any bridging or wrapping.

This “any blockchains and roll-ups” property means that Babylon protocols can be (and should be) deployed everywhere, not just on the Babylon Genesis chain. This will maximize the adoption of Babylon protocols, maximize the value and impact that Babylon protocols could generate for Bitcoin and the crypto economy, and create a Bitcoin-charged crypto economy. In return, BABY will capture a portion of the value created.

To realize this strategic direction, the BABY tokenomics should be upgraded, so that:

  • its inflation is used to incentivize active co* ntributions to the Babylon ecosystem,
  • as the adoption of Babylon protocols increases, the inflation should reduce,
  • as the adoption of Babylon protocols increases, the value captured by BABY should increase accordingly.

The Proposed Upgrade to BABY Tokenomics

Currently, BABY has an annual inflation of 8%, where 4% is staking reward for BABY stakers and the remaining 4% is staking reward for BTC stakers. The purpose is to bootstrap the adoption of Bitcoin staking. This goal has been very successfully achieved with nearly $6B Bitcoin staked as of writing.

This, together with the testnet-readiness of Bitcoin multi-staking and the invention of trustless Bitcoin vaults, indicates that it is time to prepare the BABY tokenomics for the next chapter.

As the first step of this evolution, we propose to reduce the inflation from 8% p.a. to 6% p.a., where:

  • 1% goes to BTC stakers, finality providers can charge commission.
  • 2% goes to BABY stakers, CometBFT validators can charge commission.
  • 2.8% extra goes to BTC stakers who also stake BABY, serving as the co-staking reward. Every 20000 BABY staked makes 1 staked BTC eligible for the co-staking reward.
    Due to Cosmos SDK’s limitation, finality providers and CometBFT validators cannot charge commission from this reward, which results in the two items below.
  • 0.067% goes to active FPs based on their delegation size.
  • 0.133% goes to active CometBFT validators based on their delegation size.

Once the trustless Bitcoin vault protocol becomes ready, the tokenomics should be revisited and adjusted again to bootstrap its adoption.

The inflation reduction and the new split in the above proposal are self-explanatory. The only part needs further specification is the co-staking reward mechanism.

The Co-Staking Reward Mechanism

The high level goal is to encourage BTC stakers to also stake BABY. The more BABY they stake, the more co-staking reward they will get. Recall that each BTC stake is associated with a BABY address to receive the staking rewards. We can thus use BABY address to identify each co-staker.

Let C be the co-staking reward during a unit time (e.g. one Babylon Genesis block). Let B_BABY be the amount of BABY a co-staker stakes. Let B_BTC be the amount of BTC this co-staker stakes to active FP(s). Then the weight of this co-staker is:


w = min(B_BABY / R, B_BTC),

where R = 20000 is a co-staking factor.

Let the total weight across all co-stakers be W, then the reward each co-staker will get is C * w / W.

This mechanism effectively means that every 20K BABY a BTC staker stakes will make 1 of its staked BTC eligible for co-staking reward.

For example, Alice has staked 6 BTC with 3 stakes (1, 2, 3), and has staked 50K BABY. Then the weight of Alice will be min(6, 50K / 20000) = 2.5.

For another example, Bob has also staked 6 BTC with 3 stakes (1, 2, 3), and has staked 150K BABY. Then the weight of Bob will be min (6, 150K / 20000) = 6.

Timeline

  • testnet-ready by late Sep 2025
  • mainnet-ready by late Oct 2025
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Hi Lf8888888,

Thanks again for your deep thoughts and also the Stacks reference, and sorry for the late reply. I have been working with the team to figure out what kind of “peg-in” can be implemented safely and in a short-time frame (as we need to reduce inflation asap).

It turns out that adding an on-chain internal price oracle will be time-consuming, so a more realistic version is to tie the BTC staking rewards with “how many” BABY you stake, not “how much $”. The associated parameter can be regularly reviewed and changed to reflect the price change.

I have uploaded the details as a reply. Please check it out and let me know your thoughts. Thank you so much!

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Other than stx there is no other token that offers a yield in anything other than the token itself. Stx yield is in btc which has value and sbtc yield is in sbtc which is pegged to btc.

Earning baby as a yield on btc only has value if I immediately liquidate baby for btc.

The new proposal is to require additional baby staked in order to get more rewards on the btc stake. I am not convinced that this will work it doesn’t create a peg. If you look at this from a retail perspective. If every time I go to the shop to buy milk I get 10 vouchers that are worth less daily , I then need to leave 5 vouchers with the shop owner to get 10 vouchers again for milk - so what? There is no reason for me to keep the vouchers unless the vouchers give me the same amount of milk now as in the future,this is especially true if the shop owner keeps on devaluing the vouchers by having an unlimited supply of vouchers he can print. If the vouchers will always give me the same discount on the milk and I need to stake some vouchers with the store owner to get more vouchers and further discount, then I will keep the vouchers . It’s not about how many vouchers I get it’s about the value the vouchers represent

If the peg is difficult. Work out what tye total supply given the current inflation rate would be in 10year time. Increase max supply to that number and cap the supply.

I don’t understand why the baby/btc peg is difficult. You need an initial rate which you hardcode as the starting point. There are a billion API that can give you the btc/usd rate and the baby/usd as a trivial exercise you call those every 4096 epoch and update the rate. Over and above that there are amm formula specifically designed to determine the rate of a pair. If you are concerned of the attack vector of compromising an api, choose 10 api’s , call 5 of them at random, discard the highest and lowest and do the average of the other 3. For an attack vector to succeed you need to compromise at least 5 of the API . You can do that while waiting to code a proper oracle and it’s much easier than what you are suggesting.

I really think you must not rush into a decision. Give yourself time and cap the supply by increasing the coin supply to what it would be in 10years time. You absolutely cannot have a btc yield (which had a capped supply) in a token that has no native value (unless you create a peg) and an unlimited supply.

This auction process that you are going to create to burn baby is way more difficult than capping the supply. This stuff is all interlinked. You have to create a peg of baby to btc in value not in number otherwise you are trading paper for more paper.

Looking at it purely from my view as an investor.

  1. Do I think this is a good idea. Absolutely
  2. will I invest my btc which has value to back the idea. Yes if I am incentivized wrt the risk
  3. Am I currently incentived. Only if I liquidated my baby for btc to get a btc yield.
  4. How long will I keep staking my btc? As long as my btc yield I can achieve by liquidating baby for btc is above the yield I can get in btc by staking sbtc
  5. Will I hold baby . Not unless it has value linked to the coin that carries the risk

I can’t see how you can do this without a VALUE peg. “How many baby do I stake’“ does not create a peg. The only way to create a peg is by linking the values

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Love this! Incredible idea for the future and sustainability of Babylon!

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Build long term growth around protocols for the leading innovations in BTCFi!

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Welcome Hexx! So happy to see you in the forums good sir

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Happy to see you too Marten :eye: