Nomic and Babylon Shake Up DeFi with stBTC

Nomic and Babylon Shake Up DeFi with stBTC

Apr 10 Tech Standard

Nomic, a familiar name in the crypto market, is making waves with the launch of stBTC. This Bitcoin Liquid Staking Token, created by Babylon (a Cosmos chain project focused on Bitcoin staking), has the potential to revolutionize decentralized finance (DeFi).

Both Nomic and Babylon are actively involved in both the Bitcoin and Cosmos ecosystems. Their collaboration is groundbreaking for both projects and advances the integration of Bitcoin into DeFi. Babylon's innovative staking protocol, built on the Bitcoin blockchain, utilizes cutting-edge cryptography to ensure the security of staked BTC. Users can stake their BTC and earn rewards while maintaining the flexibility to withdraw their holdings anytime without penalty. By locking up nBTC using Nomic's Babylon BTC staking pool, users can mint stBTC. This process instantly transfers the locked funds to a Babylon staking UTXO, further securing other chains within the ecosystem. Users can then hold onto their stBTC to generate rewards in the form of any ecosystem token, similar to the Cosmos ICSDS.

stBTC's public release is imminent, following a successful testnet run. Notably, stBTC remains fully liquid while staked, allowing for easy transfer or exchange at any time. Burning stBTC unlocks the equivalent nBTC for the user, though a waiting period of up to seven days may apply. It's important to remember that despite the innovative technology and economic benefits, some inherent risks may still exist.

Currently, stBTC operates on its own unique testnet environment. This testnet, which combines Babylon's testnet with Nomic's latest Bitcoin staking features, allows users to deposit Signet BTC into Nomic for testnet nBTC, which can then be staked for stBTC. Looking ahead, Babylon's Bitcoin staking solution positions Nomic as a prime candidate to be the first PoS chain to implement it. This integration would add an extra layer of security to Nomic's network, safeguarding both staked NOM and BTC chains through Babylon. Additionally, users would benefit from the combined earning potential of wBTC and NOM incentives.


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