Babylon Proposes Inflation Cut and BTC-BABY Co-Staking
Babylon has unveiled a plan to reduce BABY token inflation and introduce a co-staking system linking Bitcoin and BABY. The proposal aims to lower annual inflation from 8% to 5.5%,cutting supply growth by about 30%. This move is designed to align Bitcoin and BABY holders, boosting demand for the native token.
The new inflation breakdown includes 1% for BTC stakers, 2% for BABY stakers, and 2.35% for BTC-BABY co-stakers. an additional 0.15% will support network security. this adjustment reflects Babylon’s shift from initial adoption to long-term sustainability.
Under the co-staking system,for every 20,000 BABY staked,one BTC becomes eligible for extra rewards. Such as,pairing 6 BTC with 50,000 BABY would enhance returns on 2.5 BTC. This design strengthens the bond between Bitcoin and BABY holders, encouraging deeper network participation.
The testnet is set for late September, with the mainnet launch planned for October. Babylon also hints at future adjustments with the introduction of trustless Bitcoin vaults, which will allow BTC to interact with decentralized finance apps across chains without wrapping.
This proposal marks a notable step in Babylon’s tokenomics, aiming to reduce inflation and integrate BTC and BABY through co-staking. For more details, check the forum post.
