Babylon proposes BTC-BABY co-staking to lower inflation
Babylon has proposed cutting BABY inflation and launching BTC-BABY co-staking, a system designed to align Bitcoin and BABY holders while reducing supply growth.
- The proposal aims to cut inflation from 8% to 5.5%.
- BTC-BABY co-staking aligns Bitcoin and BABY holders.
- Testnet in September, mainnet launch in October.
Babylon has put forward a governance proposal that would cut BABY inflation and introduce a co-staking system linking Bitcoin with the network’s native token.
According to the Sept. 29 forum post , the plan aims to lower annual inflation from 8% to 5.5%, reducing supply growth by approximately 30%. At the same time, a co-staking mechanism would allow Bitcoin ( BTC ) stakers to boost their rewards by also staking BABY, thereby strengthening demand for the native token.
Inflation adjustment for sustainability
Under the proposal, annual inflation would fall from the current 8%, which is evenly split between Bitcoin and BABY stakers, to a new breakdown of 1% for BTC stakers, 2% for BABY stakers, and 2.35% reserved for BTC-BABY co-stakers. Another 0.15% would be shared between validators and finality providers to maintain network security.
This adjustment brings overall inflation down to 5.5% per year, slowing the growth of BABY’s supply while preserving incentives for participation. Babylon said the shift reflects a move from bootstrapping adoption to ensuring long-term sustainability, supported by the $6.38 billion in Bitcoin already staked through its protocol.
Co-staking to align holders
The proposed co-staking system ties Bitcoin staking more closely to BABY. For every 20,000 BABY staked, one BTC becomes eligible for extra rewards. A user pairing 6 BTC with 50,000 BABY would earn enhanced returns on 2.5 BTC, while staking 6 BTC with 150,000 BABY would make the entire position eligible.
Babylon said this design strengthens alignment between Bitcoin holders and BABY stakers, giving both groups a direct incentive to participate more deeply in the network. The team expects the mechanism to go live on testnet in late September, with mainnet deployment planned for October.
The proposal also sets the stage for further adjustments once trustless Bitcoin vaults are introduced. These vaults, still in development, will allow native BTC to interact with decentralized finance applications across chains without bridging or wrapping.
Babylon said its tokenomics will evolve alongside these launches, but the immediate step is to reduce inflation and integrate BTC and BABY through co-staking.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
IoTeX launches the world's first on-chain identity solution ioID designed specifically for smart devices
ioID is revolutionizing identity management for smart devices, allowing DePIN to authenticate devices, protect data, and unlock next-generation application scenarios within a user-owned ecosystem compatible with any blockchain.
Mars Morning News | Last week, global listed companies made a net purchase of $13.4 million in BTC, while Strategy did not buy any Bitcoin last week
Expectations for a Federal Reserve interest rate cut in December have risen, with Bitcoin briefly surpassing $89,000 and the Nasdaq surging 2.69%. There are internal disagreements within the Fed regarding rate cuts, causing a strong reaction in the cryptocurrency market. Summary generated by Mars AI. This summary is generated by the Mars AI model and its accuracy and completeness are still being iteratively updated.
The covert battle in the crypto industry escalates: 40% of job seekers are North Korean agents?
North Korean agents have infiltrated 15%-20% of crypto companies, and 30%-40% of job applications in the crypto industry may come from North Korean operatives. They act as proxies through remote work, using malware and social engineering to steal funds and manipulate infrastructure. North Korean hackers have stolen over $3 billion in cryptocurrency to fund nuclear weapons programs. Summary generated by Mars AI. This summary is generated by the Mars AI model, and its accuracy and completeness are still being iteratively improved.
Which targets are Wall Street short sellers eyeing? Goldman Sachs reveals the short-selling undercurrents amid the AI wave
Data shows that short selling in the US stock market has reached a five-year high. However, investors are not recklessly challenging AI giants; instead, they are targeting so-called "pseudo-beneficiaries"—companies that have surged on the AI concept but lack core competitiveness.
