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Native BTC Staking Is Coming to Bitcoin Layer-2 Networks, Babylon Says

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Staking Bitcoin is fast becoming a reality—a functionality once the sole privilege of proof-of-stake crypto networks.

Thanks to Babylon, HODLers can already lock up their BTC, which will soon be used to secure and earn yield from multiple staking-based blockchains at a time. While this has enormous implications for the entire crypto economy, its consequences may be most strongly felt in an ecosystem that’s just getting started: Bitcoin layer-2 networks.

“Bitcoin L2s [are] definitely a very important part of our customers,” said David Tse, co-founder of Babylon, in an interview with Decrypt. “Bitcoin staking becomes a mechanism where the L2s can get security from Bitcoin.”

Since the rise of Bitcoin’s Ordinals protocol in early 2023, developer activity and experimentation on Bitcoin have seen a stark revival. In particular, after Robin Linus unveiled the computational framework “BitVM” last October, a flurry of new models for decentralized Bitcoin layers have come onto the scene.

The term “Bitcoin L2” is thrown around loosely, but is generally understood as a system that builds “on top of Bitcoin.” It either complements Bitcoin, inherits its decentralization and security, or uses BTC as a currency—or some combination of the three.

Babylon adjusts that understanding to include being secured by BTC the asset—not just the network.

“Bitcoin L2 is a very important source of demand for us,” said Tse. “They want to get liquidity from Bitcoin, [and] they want to get security from the most secure chain in the world.”

The co-founder said he’s already in conversation with Build On Bitcoin (BOB), a hybrid Ethereum and Bitcoin L2, to potentially introduce Bitcoin staking to the network.

To clarify, Babylon’s Bitcoin staking functionality does not require a “wrapped” or bridged version of BTC on a separate blockchain. All staked coins are locked up on layer-1, and are fully controlled by their owners’ Bitcoin private keys.

Earlier this month, Babylon launched Phase 1 of its staking mainnet, opening the floodgates for users to lock up their BTC for future staking. At first, the team capped their system to hold up to 1,000 BTC, which was well under the demand that Babylon had already accrued for their product.

This triggered an on-chain race and fee war among users to see their staking deposits processed first, which spiked the Bitcoin network’s transaction fees far higher than even the team expected.

“The 1,000 Bitcoin cap is very much for security reasons,” Tse said. “We expect as the cap increases, the competition in terms of the gas war will be lower.”

Compared to altcoin chains, the co-founder said that accessing Bitcoin staking will be much easier. Unlike Ethereum, Babylon’s delegated staking model lets validators handle the technical burden of running the network and providing security.
Furthermore, whereas Ethereum requires at least 32 ETH ($80,800) to solo stake, Babylon imposes no such minimums aside from the cost to process the transaction.

After that, a user’s Bitcoin will be able to generate them what Babylon calls safe yield—potentially across multiple blockchains at once. The only risk involved would be slashing risk at a protocol level, if the validator you trust with your stake behaves dishonestly.

Theoretically, a protocol like Babylon could put to work hundreds of billions of dollars in BTC that is currently idle, bolstering its current role as a store of value asset.

When asked whether BTC staking could pose a competitive threat to the value of altcoins that once held this functionality over BTC, Tse provided a more optimistic outlook. He said Babylon could save proof-of-stake chains from needing to rapidly dilute their native assets to keep their systems secure, by securing their networks using BTC capital instead.

“It is very expensive to attract people to buy the native asset in order to provide staking,” he explained. “They end up paying a very high yield. Therefore, it is very unhealthy for the tokens of these projects.”

Tse predicts a future where staking on Bitcoin is as popular as it is on Ethereum, where about 28% of the circulating supply is currently staked. However, that staked capital would still be unlocked through liquid staking tokens with which stakers can still access other emerging Bitcoin applications, like lending, borrowing, and trading.

“I think that is why staking is such a fundamental use case of an asset,” he concluded, “and that is why we’re excited about giving this to the biggest asset.”

Edited by Ryan Ozawa

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Magic Eden Token Airdrop Date Set as Pre-Market Value Hits $562 Million

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The ME Foundation will launch its Solana-based ecosystem token—ME, which is aligned with leading NFT marketplace Magic Eden—on December 10, a representative told Decrypt.

The airdrop, which traders anticipate may be worth more than $500 million based on pre-market trading prices, will reward users of Magic Eden’s Bitcoin exchange and cross-chain NFT marketplace. The token will be claimable exclusively through the Magic Eden Wallet app.

Specifics regarding the conversion of Magic Eden Diamonds, the platform’s existing rewards program, to the ME token have not been revealed. However, the spokesperson said that allocations are expected to be based on factors such as “organic” trading activity, cross-chain trading, and “loyalty” or historical use of eligible platforms.

While users will not find out their allocations until December 10, they will be able to check their eligibility for the airdrop in the days before the claim using a tool that will be released by the ME Foundation.

When the claim officially opens on December 10, 12.5% of the total 1 billion ME supply (125 million tokens) will be immediately unlocked and offered to eligible Magic Eden users to claim. An additional 22.5% of the supply, or 225 million ME tokens, will be set aside to incentivize future use of ME Foundation protocols and related platforms.

The ME token has jumped up to $4.50 in pre-market trading via Whales Market, though trading volume has subsided since additional token details were announced on Monday. At that price, the ME airdrop would reward users with over $562 million on claim day. Coinbase’s pre-market trading platform puts the price lower at $3.41, however.

Magic Eden started as a Solana NFT marketplace, but has since grown to become the leading Bitcoin Runes and NFT exchange while maintaining the highest market share among all NFT marketplaces in the last six months according to data from Tiexo.

Edited by Andrew Hayward

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Justin Sun Goes Bananas: Snags Controversial “Comedian” Artwork for $6.4 Million

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What’s worth millions, taped to a wall, and destined to rot? Hint: It’s art you can’t hang for long.

Maurizio Cattelan’s infamous duct-taped banana art piece, Comedian, fetched an eye-popping $6.24 million, including fees, at Sotheby’s contemporary art auction in New York on Wednesday night.

The sale saw six bidders battle it out before Jen Hua, deputy chairman of Sotheby’s and chairman of Sotheby’s China, placed the winning bid on Tron founder Justin Sun’s behalf. 

The artwork shattered its $1.5 million pre-sale estimate and became its place as one of the most expensive—and controversial—art pieces (or should we say fruit) ever.

Sotheby’s accepted crypto payments for this sale as the market is seeing new heights following Donald Trump’s re-election, with Bitcoin (BTC) soaring to $97,000 on Wednesday.

The crypto entrepreneur, Sun, claimed the artwork in a heated five-minute bidding war that involved six other participants. 

“This is not just an artwork; it represents a cultural phenomenon that bridges the worlds of art, memes, and the cryptocurrency community,” Sun wrote on X, sharing his “banana” experience. 

He announced plans to eat the banana in the coming days as part of what he described as “honoring its place in both art history and popular culture.”

The artwork comprises a real banana affixed to a wall with duct tape, accompanied by a certificate of authenticity and instructions for replacing the fruit as it inevitably decays. 

During the heated auction, Sotheby’s auctioneer Oliver Barker quipped, “These are the words I never thought I’d say, ‘$5 million for a banana.’”

The banana’s rise to infamy in the art scene began in 2019 when one sold for $120,000 at Art Basel. The work became a viral sensation after performance artist David Datuna ate the banana, dubbing his act “Hungry Artist.”

Since then, Comedian has sparked conversations about the absurdity and subjectivity of art valuation.

Justin Sun founded the blockchain platform Tron in 2017. In December 2021, he stepped down as CEO of the Tron Foundation, claiming he had transferred control of the project to Tron DAO, a non-profit decentralized autonomous organization.

Edited by Sebastian Sinclair

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McDonald’s Reveals Doodles Collab for Coffee and Collectibles

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The golden arches are getting a pastel makeover for the holiday season.

Fast food giant McDonald’s and Web3-native brand Doodles revealed a collaboration Thursday, featuring custom cups that showcase the Ethereum NFT collection’s colorful, hand drawn style. On top of that, customers can unlock digital collectibles and content, as well as access co-branded physical merchandise.

Dubbed the “GM Spread Joy” campaign, the marketing initiative is being billed as an immersive experience that pays homage to the Crypto Twitter mantra. Available to customers in the U.S., the promotion can be accessed at participating stores among McDonald’s 13,500 restaurants.

The limited-edition cups, emblazoned with pinks and blues amid holiday-themed tableaus, allow customers to access a “pack ripping” experience, McDonald’s said in a press release.

Dovetailing with Doodles’ digital avatars, they contain accessories and apparel for Doodles characters, among other goodies, like access to music videos and Doodles’ animated series. In addition to the original Ethereum NFT collection, Doodles has launched an avatar creation “Stoodio” app on Ethereum layer-2 network Base, where the digital items can be used.

Outside the U.S., where NFT projects haven’t faced intense regulatory scrutiny, the burger chain has used NFTs to promote its purple icon Grimace and launched a metaverse game called My Happy Place. What’s more, McDonald’s tapped The Sandbox, an Ethereum-based metaverse game, to pay tribute to its chicken nuggets.

McDonald’s collaboration with Doodles may represent its biggest step into the NFT space since its American division unveiled McRib-inspired NFTs in 2021. Effectively, McDonald’s was an early adopter of using digital assets as a way to reward customers and cultivate brand loyalty.

Earlier this year, Doodles teamed up with the sportswear powerhouse Adidas, introducing virtual swag packs that let buyers claim exclusive physical apparel. As Doodles’ Chief Brand Officer, some collectibles paid homage to a song created with musician Pharrell Williams.

As part of its holiday promotion, McDonald’s customers can access a track produced by Williams called “Good Mornin,” sung by artist Marley Bleu. Williams, who once worked at McDonald’s, was inspired by internet culture and “viral ‘GM’ memes,” McDonald’s said.

Comprising 10,000 generative profile pictures (PFPs), Doodles features art by Scott “Burnt Toast” Martin. The collection is currently valued at 20,296 ETH ($64 million), according to CoinGecko, with the cheapest NFT from the collection listed for 2 ETH ($6,300) on secondary markets.

Known as the collection’s floor price, the figure climbed as high as 2.7 ETH ($8,500) earlier this week after McDonald’s teased the collaboration on Twitter (aka X).

Edited by Andrew Hayward

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