Babylon Proposes BABY Inflation Cut and BTC-BABY Co-Staking
Babylon has unveiled a plan to reduce BABY token inflation and introduce a BTC-BABY co-staking system. This move aims to align Bitcoin and BABY holders while curbing supply growth.
The proposal seeks to lower annual inflation from 8% to 5.5%, a reduction of about 30%. This change will slow down the growth of BABY’s supply while keeping participation incentives intact. The new inflation breakdown includes 1% for BTC stakers,2% for BABY stakers,and 2.35% for BTC-BABY co-stakers. The remaining 0.15% will support network security.
Co-staking will allow Bitcoin stakers to earn extra rewards by staking BABY tokens. For every 20,000 BABY staked,one BTC becomes eligible for enhanced returns. this system strengthens the bond between Bitcoin and BABY holders, encouraging deeper network participation.
The testnet launch is set for late September, wiht the mainnet following in October. Babylon believes this shift will ensure long-term sustainability, supported by the $6.38 billion in Bitcoin already staked through its protocol.
Future plans include trustless Bitcoin vaults, which will allow native BTC to interact with decentralized finance applications across chains without bridging or wrapping. Babylon’s tokenomics will evolve with these launches, but the immediate focus is on reducing inflation and integrating BTC and BABY through co-staking.
