Babylon is a modular protocol designed to extend Bitcoin’s security guarantees to Proof-of-Stake (PoS) networks through native Bitcoin staking. It enables Bitcoin holders to stake their BTC directly—without bridging or wrapping—by locking them in self-custodial Taproot scripts. The Babylon architecture consists of two layers:

• The Bitcoin Layer, where BTC staking occurs via on-chain scripts using BIP341
• The Babylon Genesis Chain, a Cosmos SDK-based chain that acts as a coordination and finality hub, validating checkpoints, enforcing slashing, and managing validator elections

This design allows PoS chains to anchor their finality and security to Bitcoin while providing BTC stakers with yield and preserving self-custody. The protocol includes fast unbonding through Bitcoin timestamping, reducing withdrawal time from 21 days to approximately 50 hours.

Babylon enforces slashing conditions for finality providers and delegators that act maliciously. The protocol is modular, allowing external chains to integrate via “Bitcoin Supercharged Networks” (BSNs) for timestamping and finality.

BABY is the native token of the Babylon Genesis Chain. It supports core operations on the chain and coordinates activities across the Babylon protocol. Its key uses include:

• Staking: BABY is staked to secure the Babylon Genesis Chain. Delegators assign BABY to validators, who produce blocks and validate Bitcoin checkpoint proofs. Staking follows an epoch-based execution model using the custom x/epoching module.

• Governance: BABY holders vote on on-chain proposals related to protocol changes, parameter updates, software upgrades, and whitelisting of smart contract deployers. Proposals require a minimum deposit of 50,000 BABY and follow a 3-day voting period.

• Gas Payments: BABY is used to pay for transaction fees on the Babylon Genesis Chain.

• Incentives: BABY rewards are distributed to both BABY and BTC stakers. Token inflation is set at 8% annually, split evenly between the two staking groups.

During the protocol’s permissioned phase, smart contract deployments are limited to governance-approved whitelisted accounts. BABY also plays a central role in incentivising correct validator and finality provider behaviour and in enforcing penalties through Bitcoin-level slashing mechanisms.

Babylon Labs, the core development team behind the Babylon protocol, was co-founded by:

• Professor David Tse, a professor at Stanford University, known for his research in networks, consensus mechanisms, and distributed systems

• Dr. Mingchao “Fisher” Yu, a cryptography specialist and the Chief Technology Officer (CTO) of Babylon, who leads the protocol's technical design and architecture

Together, they introduced the concept of native Bitcoin staking as a solution to improve economic security in PoS networks without requiring token wrapping or bridging. Under their leadership, Babylon Labs has grown into a global team of engineers, protocol researchers, and Cosmos SDK developers.