What Does Babylon Phase-1 Launch Mean?

Author: Fisher Yu, CTO of Babylon Labs, commentary on Babylon Phase-1 Launch.

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Babylon Bitcoin staking Phase-1 has just wrapped up.

What excites you the most?

“$6B TVL!” You may say.

Yes, I am also super excited about it. I am equally humbled by it, too, as well as the team.

But, TVL is not the only name of the game. As the CTO, I know that BTC staking infrastructure is still young and not widely supported. Many BTC holders (especially institutions) were not able to stake. Thus, $6B is indeed far away from the true potential of Bitcoin staking.

What is the significance of Phase-1, then?

Hope. More precisely, the hope of bringing the crypto world closer to the broader world. Let me elaborate.

There are three universes: the mainstream universe, the Bitcoin universe, and the altcoin universe.

Most crypto innovations and activities happen in the altcoin universe. However, altcoin universe’s growth is bottlenecked by capital, security, liquidity, users, and adoption.

The Bitcoin universe has them all. Also, Bitcoin is spearheading the adoption of crypto in the mainstream universe, which is way bigger than the crypto one and can bring in unimaginable opportunities.

However, the connection between the Bitcoin universe and the altcoin universe is very weak, meaning that whatever benefits Bitcoin gets by merging with the mainstream universe cannot be easily channeled to the altcoin universe.

Babylon aims to be the answer. By building native use cases of Bitcoin that can empower the altcoin universe, it:

1. establishes the very much needed connection between the Bitcoin universe and the altcoin universe for capital, security, liquidity, users, and adoption.
2. gives the mainstream universe more reasons to adopt Bitcoin.

 Our Phase-1 launch signalled that the Bitcoin universe and the mainstream universe is ready to embrace the altcoin universe. As shown in the graph below, The Phase-1 stakers occupy a wide spectrum, from small Bitcoin holders to big Bitcoin holders. They comprise both retailer stakers and institutional (including traditional ones) stakers. This indicates a potential consensus in entering the altcoin universe.

This is what excited me the most.

What’s next?

• Phase-1 has successfully bootstrapped one side of the channel (the Bitcoin and mainstream universes).
• In Phase-2, the channel itself, i.e., the Babylon chain, will be launched.
• Then in Phase-3, the other side of the channel (altcoin universe that adopts Bitcoin staking) will be launched.

Hopefully, Babylon will become the busiest and strongest channel in the world.

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