Babylon is a non-custodial Bitcoin staking solution that implements native asset staking of BTC on layer one in a trustless manner through cryptography. By re-staking, it provides security guarantees for other blockchains using POS, generating returns.
Bitcoin staked in Babylon does not leave the mainnet; its security is guaranteed by the PoW mechanism. The staking process operates entirely through a cryptographic method called "Extractable One-Time Signature" (EOTS), without relying on any third-party bridges or custodians. Therefore, it has gained popularity and acceptance within the BTC community, which has high security requirements.
Babylon allows Bitcoin holders to earn staking rewards while ensuring security, opening up the BTC staking track and fundamentally changing the gameplay of the BTC ecosystem. Additionally, the introduction of staking BTC can address issues such as inflation in small to medium-sized POS chains (to persuade everyone to stake, relatively high inflation returns must be offered, such as 10-15% or even 20% tokens for a year of staking) and the difficulty of starting (building validation nodes requires significant capital).

BTC Liquid Staking

Similar to traditional liquidity token solutions for ETH, the BTC liquid staking solution aims to provide a savings account for BTC, allowing for deposits and withdrawals at any time while paying interest. The liquid staking tokens can also be used in other DeFi projects to generate returns (such as providing liquidity, lending, etc.). Staking on Babylon can be seen as a fixed-term deposit, offering high returns but without the ability to withdraw immediately.
It can also attract more non-mainnet BTC users, such as those holding wBTC on Ethereum, who can participate in Babylon staking.
Essentially, liquid staking can be viewed as the project borrowing users' BTC to stake in Babylon, using the staking rewards to pay users' interest, while the bonds given to users (liquid staking tokens) can also be traded.
Currently, most of Babylon's liquid staking tokens are built on Ethereum, with plans to support multiple chains in the future. Except for Lombard, where users stake directly to Babylon, other projects adopt a custodial model, where the project team stakes on behalf of users in Babylon, with liquidity provided by third-party institutions.

pSTAKE

pSTAKE uses institutional custodial liquidity, where users' funds are staked to the Pstake deposit address, with liquidity supported by custodians like Cobo. The project then re-stakes the BTC to Babylon.
yBTC is the official liquid staking token, which has not yet been issued. It is expected to allow users to utilize yBTC to earn returns in other DeFi projects, such as providing liquidity and lending. yBTC will initially be issued on Ethereum and later on other L2s.

Project Progress & Participation Opportunities

The v1 testnet involves depositing and withdrawing sBTC (testnet BTC) on the BTC testnet via pSTAKE. v2 will provide users with the ability to earn staking rewards from Babylon on the mainnet. v3 will mint a liquid staking token called yBTC, allowing users to earn staking rewards while also participating in other DeFi projects with yBTC. v4 will diversify the returns further.
Currently, the product is in the v1 stage, and there is no points program launched yet, which is expected to be introduced alongside the mainnet. Participating in the testnet staking will bring additional points. Currently, v1 has 44,813 users participating, staking 40.65 sBTC.

Lorenzo

Lorenzo has implemented a principal and interest separation business similar to Pendle in its BTC liquidity solution.
Users send BTC to Lorenzo's multi-signature wallet, which is then managed by staking agents (a group of trusted Bitcoin institutions and TradFi giants), and receive stBTC as a staking certificate. Lorenzo then stakes the BTC to Babylon.

After collateralizing Bitcoin liquidity, Lorenzo issues three types of tokens:

1. Liquidity Principal Token (LPT): Represents the tokenized redeemable BTC principal, with stBTC being Lorenzo's official LPT.
2. Yield Accumulation Token (YAT): Represents the right to claim rewards from the staking project at the end of the re-staking period. YAT can be traded and transferred, but cannot be transferred after maturity. Users can claim project rewards based on the YAT they hold. YAT is an ERC-20 token issued through re-staking to staking agents.
3. Staking Proof Token (SPT): After users claim project rewards using YAT, YAT will automatically convert to an equivalent SPT, entering a unified queue and cannot be traded. The sole purpose of SPT is to be destroyed in order when users redeem BTC by burning stBTC. The agentID associated with the destroyed SPT determines which staking agent will redeem the BTC. If there are insufficient SPT in the queue, users must wait for new SPT to enter the queue. Users who generate SPT by claiming YAT can prioritize using their generated SPT to redeem BTC.

Since both LPT and YAT can be traded, anyone holding YAT and LPT can use them to claim rewards and withdraw re-staked BTC.
Tokens like stBTC can be seen as another form of wrapped Bitcoin, and Lorenzo aims to eventually replace wBTC. The value of YAT comes from accrued yield and speculation on future yields, making YAT highly volatile. Trading pairs between stBTC and all YAT will be the base trading pairs. There may also be trading pairs between LPT, YAT, and assets like ETH, BNB, and stablecoins, creating significant arbitrage and investment opportunities for investors.
In lending protocols, borrowers can use LPT and YAT as collateral to borrow any required assets; in return, stakeholders have greater control over their investments and liquidity.

Project Progress & Participation Opportunities

Lorenzo's mainnet will launch in two phases (Lorenzo Phase One and Lorenzo Phase Two).
Lorenzo Phase One primarily tests minting stBTC from BTC and exchanging stBTC for BTC.
Lorenzo Phase Two introduces staking agents to decentralize the management of users' staked BTC and issue liquidity re-staking tokens supported by BTC. Staking agents can issue YAT to represent users' staking rewards. When users claim project rewards using YAT, YAT will automatically convert to an equivalent SPT, determining which staking agent redeems the BTC.
Participating in pre-launch staking can earn rewards and points: https://app.lorenzo-protocol.xyz/staking

Lombard

Lombard is more decentralized, with user funds staked directly to Babylon rather than relying on trusted third parties for liquidity. The overall architecture consists of users, Bitcoin nodes, backend, and a Consortium (used to manage the staking process, a decentralized state machine that achieves consensus using the Raft algorithm).
The staking process of Lombard is managed by a decentralized Consortium. Users send native BTC to the Consortium's address, and once the backend detects a deposit at this address from the Bitcoin node, it triggers the deposit notarization process with the Consortium. The Consortium verifies the transaction, validates the deposit, then stakes the BTC to Babylon and mints LBTC equivalent to the amount staked by the user.

The Role of LBTC

LBTC is Lombard's liquid staking token, allowing holders to earn native rewards through Babylon. LBTC is exchanged at a 1:1 ratio with BTC, can be cross-chain, and is DeFi compatible, usable as collateral for lending protocols, perp DEX, etc. The first phase of LBTC will be issued on Ethereum, with plans to expand to multiple chains.

Project Progress & Participation Opportunities

Lombard is currently in the first phase and operates in Private Beta mode on the Ethereum mainnet. Eligible participants can stake native BTC and mint LBTC. It is worth noting that Lombard currently only allows staking, not withdrawals, and users should keep an eye on updates on X.
The second phase will begin in a few weeks and will open LBTC to the public while maintaining deposit limits. The LBTC waitlist will manage LBTC demand and provide a mechanism to reward early participants with exclusive access and benefits over time.
LBTC waitlist: https://lombard.finance/#LBTC_waitlist

Solv

Solv tokenizes staking yields and restaking yields (integrated with Babylon) from BTC Layer 2 and DeFi yields from ETH Layer 2 into SolvBTC. SolvBTC integrates seamlessly with other protocols, delivering Bitcoin liquidity into various application protocols. Solv currently supports Ethereum, BNB, ARB, and Merlin.
Solv adopts a decentralized asset management architecture, including built-in security guards, price oracles, and liquidity strategy-based tokens, establishing trustless process standards through smart contracts.
Solv also uses a custodial model, with off-chain funds held by reputable custodians.

The Role of solvBTC.BBN

solvBTC.BBN is Solv's official liquid staking token, which will be integrated with various DeFi protocols.
Its roles include:

1. DEX: Provides instant liquidity and high yield opportunities for solvBTC.BBN holders without KYC.
2. Lending Protocols: Allows solvBTC.BBN holders to stake tokens for additional yields while enabling borrowers to achieve leveraged yield positions.
3. Yield Trading Protocols: Enables users to trade future yields of BBN, manage yield volatility, and optimize returns.

Project Progress & Participation Opportunities

Since its launch in April, SolvBTC has attracted over 12,000 BTC staked across Merlin Chain, Arbitrum, and BNB Chain, with 20,000 users participating.
Total points (XP) are composed of three parts: base points, accelerated points, and referral points. Total points are the sum of the three types of points.

Base Points

Base points are earned by depositing funds into Solv Vaults. The more users deposit, the more base points they earn. Additionally, the longer the deposit holding time, the more base points are accumulated. Base points = (points per dollar deposited) × (holding time). Points are updated daily. Daily snapshots record the value of collateralized funds in the Vaults. Note: SolvBTC purchased from the secondary market does not generate any points.

Accelerated Points

The unlocking condition for the acceleration card is to invite three real investment users, with no limit on the amount. Ultimately, your point total = (base points) x (acceleration card coefficient). There are two types of acceleration cards:

1. XP Boost: Can be obtained after reaching a certain investment threshold; the larger the amount, the greater the multiplier. Everyone can see their acceleration and the amount needed to reach the next stage along with the corresponding acceleration coefficient, allowing for self-exploration with significant marginal benefits.
2. Event XP Boost: Obtained by participating in events, valid for 7 days, and multiple can be stacked. In mid-April, the system will display acceleration cards and the obtained acceleration coefficients in your card pack. A new round of acceleration card airdrop activities will be held in the future.

Referral Points

Users can earn 10% of the basic points (Basic XP) of their referrals after bringing in new users, which does not affect the total score of the referrals; there is no limit, and the more real users brought in, the more can be earned.

Bedrock

Bedrock, as a liquid staking mechanism, was initially developed for the Eigenlayer ecosystem and has gradually evolved into the largest staking entry on IOTX, achieving nearly 200 million TVL in both ETH and IOTX ecosystems.
Recently, they have developed the BTC liquid staking protocol UniBTC with the commission and technical support of Babylon, allowing Ethereum users to stake wBTC to Babylon. UniBTC is currently found on Ethereum.

Project Progress & Participation Opportunities

Users can hold uniBTC to earn Bedrock rewards and Babylon points. It is important to note that uniBTC cannot be unstaked at this time, but it can be directly sold, as it can be exchanged with WBTC at a 1:1 ratio.

Master Protocol

Master Protocol is a yield aggregation platform that aggregates BTC ecosystem projects such as Bouncebit (stBBTC), Babylon, BitLayer, etc., allowing users to stake or trade through the platform.

The two main products of Master Protocol are:

1. Master Yield Market: Provides yield trading opportunities, aggregates Bitcoin ecosystem assets, packages them as MSY, and splits them into MPT (principal) and MYT (interest) for user trading.
2. LST Protocol on Botanix Spiderchain: A liquid staking protocol that enhances Bitcoin's liquidity and yield. It has not yet been launched and will collaborate with Botanix in the future.

Master Yield Market

The basic function of Master Yield Market is to aggregate Bitcoin ecosystem assets, package them as MSY, and split them into MPT and MYT for user trading. Its principle is similar to the Pendle protocol:
• MPT (Master Principal Token): Represents the principal; purchasing MPT can lock in profits from the underlying assets in advance, equivalent to fixed-income products. Whales or institutions would prefer such low-risk products. The purchased funds will move to the LST protocol and BTC L2.
• MYT (Master Yield Token): Represents interest; MYT has a low unit price but can enhance capital utilization, equivalent to leveraging expected returns, which retail investors would prefer, leading to price volatility.

Points Program

Master Yield Pass is an incentive program launched by Master Protocol, with a total of 10,000, which were minted for free on June 24 on Base. Currently, all NFTs have been minted for free. The rights after staking Master Yield Pass include:

1. Earning points from the Trading Pool and Referral Pool, redeemable for future token airdrops.
2. Platform fee dividends: Assuming total trading volume reaches $200 million and platform fees reach the million-dollar level, each NFT can earn over $100 in dividends. (For comparison, the yield trading platform Pendle on Ethereum has accumulated trading volumes in the tens of billions of dollars.)
3. Future rights: Such as whitelist qualifications for NFTs/events/IDOs, etc.

Chakra

Chakra is a ZK-driven shared modular Bitcoin settlement layer that provides unified settlement services for all Layer 2 networks, building an aggregated liquidity and interoperability network to release Bitcoin liquidity into the entire chain ecosystem.
Funds on the Bitcoin network will be managed by the MPC solution provided by Cobo, and then staked to Babylon to earn staking rewards. After transaction retrieval and verification, tlBTC will serve as the staking certificate, allowing staked users to mint.

The Role of tlBTC

tlBTC corresponds 1:1 with the amount of BTC staked on the Bitcoin network. tlBTC has three types of uses:

1. As a staking certificate, allowing users to enjoy the underlying Babylon staking rewards while holding it.
2. As a liquidity asset, enabling users to invest it into the DeFi ecosystem (Dex, Lending, Stablecoin) for additional returns.
3. As a native asset for cross-chain settlement, utilizing Bitcoin's good liquidity and stability to achieve efficient, low-latency, and low-slippage settlements.

Project Progress

Recently, Chakra has launched multiple joint testnets with Babylon, consistently ranking first in three Cap phases. In the latest Testnet-4 Cap 3, Chakra ranked first as Babylon's Finality Provider, with a total confirmed TVL of 258.401 sBTC (accounting for 36% of Babylon's total TVL), and received a total of 171,142 staking delegations (accounting for 37% of Babylon's total staking delegations).

Chakra has launched a points system on the testnet, where staking 0.0005 sBTC per day earns 1 point, and inviting others can earn 10% of the invited person's point earnings. The testnet supports both self-custody staking and MPC staking, with both methods earning points.

In Conclusion

Babylon's BTC staking is also about to launch, and the changes brought by BTC staking to the BTC ecosystem are significant.
BTC staking, like ETH's DeFi, will first enhance the overall yield of assets. Currently, the market size for BTC earning exceeds $10 billion, with yields ranging from 0.01% to 1.25%. In contrast, staking rewards for PoS blockchains often range from 5% to 20%, making staking BTC for other PoS chains potentially yield dozens of times more than traditional BTC earning. Even though some in the BTC community prefer to hold their coins without movement, the increase in returns is tangible. Users can earn returns from using BTC, which spills over to BTC L2 and other ecosystems, initiating a positive feedback loop.
Of course, BTC staking led by Babylon cannot be compared to ETH staking, as the BTC chain itself does not have native yields and is more similar to the restaking business of Eigenlayer. The related ecosystem will also resemble the LRT protocol under Eigenlayer.
Therefore, the monopolistic pattern presented in ETH staking is unlikely to occur in BTC staking, and the motivation for exchanges to enter the market is also weaker, as scale effects do not lead to more stable profits. Early projects in the BTC staking field have opportunities for land grabbing, and investors can easily achieve high returns from rapid growth.