- Babylon community proposes joint BTC-BABY staking and inflation reduction.
- Inflation reduced from 8% to 5.5% annually.
- Increased incentives for BTC holders to stake BABY tokens.
Babylon’s Bitcoin staking protocol community announced a proposal on September 29 to adjust BABY token economics, aiming to cut inflation and introduce BTC-BABY joint staking.
This adjustment, reducing inflation from 8% to 5.5%, alters token distribution, incentivizing BTC and BABY co-staking, and impacts Bitcoin’s DeFi role.
Babylon Plans Inflation Cut from 8% to 5.5%
Babylon Protocol’s latest proposal, crafted by its community, aims at drastically realigning BABY token economics. Through reduced inflation and the introduction of BTC-BABY joint staking, stakers stand to receive greater rewards. David Tse, Babylon’s founder, articulated the proposal’s significance, especially its focus on making Bitcoin more productive.
The new proposal allocates inflation differently, now rewarding BTC and BABY stakers with targeted distributions of 1% and 2% respectively. Additionally, co-stakers of BTC and BABY will enjoy a 2.35% inflation allocation. This move intends to foster deeper network participation, underscoring an enhanced protocol security posture.
“This proposal seeks to get support from the Babylon community regarding adjusting BABY tokenomics, including reducing inflation and introducing BTC-BABY co-staking. Babylon is about building native use cases for Bitcoin. It makes Bitcoin productive, trustlessly.” — David Tse, Founder, Babylon Chain
BABY and BTC Joint Staking: Enhancing Protocol Engagement
Did you know? Babylon becomes the first protocol to utilize Bitcoin’s script and vaults for cryptographic slashing and rewards without bridges.
Bitcoin (BTC) recently reached a price of $112,190.55, as reported by CoinMarketCap. The cryptocurrency holds a market capitalization of $2.24 trillion, representing a 57.78% dominance in the market. Over the past 24 hours, BTC’s trading volume shifted by 32.02% to $33.30 billion. With a current circulating supply of 19.93 million coins, BTC’s overall performance shows a varied trend across recent months.
Coincu’s research team posits that the proposal may lead to significant financial outcomes, encouraging BTC liquidity while reinforcing protocol security. By targeting co-staking benefits, these utilities ensure Bitcoin’s active economic contribution within decentralized frameworks, potentially affecting ecosystem-wide regulations.
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Source: https://coincu.com/news/babylon-reduces-inflation-new-program/