Babylon is the hottest project in the BTC ecosystem, similar to EigenLayer, which has ecological projects like EtherFi, Puffer, and Renzo.
SatLayer is a protocol built around the Babylon ecosystem and is the officially designated Restaking collaboration protocol by Babylon. @satlayer
Through SatLayer, Bitcoin staked in Babylon can be restaked, providing Bitcoin-native security guarantees for other protocols or Dapps, serving as a "Bitcoin Validation Service" (BVS).
SatLayer currently supports various mainstream Babylon LST protocols, including Solv, Lombard, uniBTC, Lorenzo, pStake, pumpBTC, and FBTC, and supports Ethereum network, BNB Smart Chain, BitLayer, and more for these assets.
Additionally, the BTC currently staked has multiple layers of rewards. For example, by staking Solv protocol's SolvBTC.BNN, you can earn points from the Solv protocol, Sats (which are reward points provided by SatLayer), and Babylon's staking points. Depositors of UniBTC can earn not only Sats² through a single LST deposit but also uniBTC diamonds and Babylon rewards.
Staking address: https://tinyurl.com/ryxs-sl-dev
Babylon and SatLayer
Babylon is a Bitcoin staking protocol that cleverly utilizes Bitcoin's existing scripting language and UTXO model to implement collateral contract functionality. Users can achieve secure BTC Staking without transferring Bitcoin out of their addresses. Babylon employs on-chain staking scripts and EOTS encryption mechanisms for self-custodied Bitcoin staking and yield generation, which can perform trustless forfeiture of native Bitcoin in the event of double signing on a PoS chain.
However, Babylon can only prevent double signing by validators. Due to the limitations of Bitcoin's scripting language, it cannot extend forfeiture functionality to address other forms of misconduct. SatLayer builds upon Babylon's "forfeitable security" guarantees, allowing developers to define arbitrary forfeiture conditions in smart contracts. These smart contracts are deployed on SatLayer's Babylon CosmWasm smart contract chain, which is a Turing-complete execution layer. This approach allows for a broader and more flexible range of forfeiture conditions for various misconducts. By doing so, SatLayer significantly expands the security scope that Bitcoin can offer, unlocking its full potential as a reward-generating asset.
SatLayer enhances Babylon's capabilities by providing the following advantages:
● Enhanced Security: With programmable forfeiture, SatLayer can prevent a wider range of misconduct, making BVS more secure.
● Expanded Use Cases: The introduction of BVS allows for the construction of various protocols utilizing Bitcoin's security in Dapps.
● Improved Capital Efficiency: Restaked Bitcoin in Babylon can be used to secure other protocols, thereby increasing capital efficiency.
Bitcoin Validation Service (BVS)
Through SatLayer, BVS can specify the conditions under which operators will be forfeited and pay operators based on off-chain calculations. SatLayer enables various existing dApp and protocol categories to be protected by Bitcoin collateral. This approach allows such applications to easily leverage the security guarantees supported by Bitcoin and addresses the cold start problem of relying on the protocol's own utility tokens for underlying security.
This expansion has broad applications:
● Lending protocols can use restaked collateral as an insurance fund to manage bad liquidations.
● Data availability protocols can ensure that nodes actually possess the data they claim to store.
● Sequencers can guarantee activity and censorship resistance.
● Native Bitcoin DEXs can use restaked collateral for secure transaction settlement on the Bitcoin chain.
● Bitcoin-backed stablecoins.
● Cross-chain bridges can facilitate seamless interoperability between Bitcoin L2/sidechains and other L1 ecosystems.
Overall, SatLayer expands the functionality of Babylon, transforming it from a basic staking protocol into a more versatile security platform. This expansion can be widely applied to various ecological applications of BTC, promoting the prosperous development of the ecosystem.
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