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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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Perpetual DEX Hyperliquid to Launch Native Token Following Bullish October

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Hyperliquid, a decentralized perpetuals exchange, is challenging the conventional wisdom that venture capital is essential for success in crypto. Instead, it claims it’s relying on its touted tech and community-first approach.

The DEX’s Hyper Foundation, which oversees development, announced Thursday its token generation event, slated for early Friday at 2:30 AM ET,  alongside an airdrop.

Over the past year, Hyperliquid has expanded from an exchange into a “full financial system,” claiming its liquidity now “rivals” that of “top exchanges,” its foundation said Thursday on X, formerly Twitter. 

In October, Hyperliquid surpassed Jupiter and SynFutures, clocking a record $1.39 billion in daily trading volume, DeFiLlama derivatives data shows. 

“The HYPE genesis event marks a key milestone in the journey, unlocking core functionality at every level of the stack,” it said.

Based on data from Aevo, a derivatives tracking platform, Hyperliquid has a projected valuation of $3 billion. At that valuation, the planned 310 million HYPE tokens allocated for the 31% community airdrop would be worth nearly $1 billion, marking Hyperliquid’s “genesis event” as one of the largest in DeFi, the project claims.

Once launched, the HYPE token will integrate directly into Hyperliquid’s core operations, the project said. Decrypt has reached out to Hyperliquid to learn more.

Beyond traditional governance roles, the token will also provide functionality for staking and transaction fees while enabling direct USDC trading pairs on the platform’s spot market.

What’s different?

Hyperliquid runs on a blockchain designed specifically for high-speed trading and financial applications. The platform uses HyperBFT, a proof-of-stake system that can process transactions almost instantly while maintaining security through network consensus.

The project is currently ranked as the top decentralized exchange for derivatives, posting $1.6 billion in 24-hour volume, according to data from DeFiLllama. Its all-time volume sits at roughly $428 billion.

Hyperliquid said in a blog post on Thursday there would be “no allocations for private investors, centralized exchanges, or market makers,” an approach that departs from how other projects typically allocate during launch, which often includes significant portions reserved for early backers and project leaders. 

“No investors. No paid market makers. No fees to any company. Community first,” Hyperliquid claims on its website. 

Still, roughly 24% of the tokens will be allocated to current and future core contributors of the network, and a further 6% will go towards the “Hyper Foundation budget,” the exchange said.

Edited by Sebastian Sinclair

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Seven Things to Tell Your Crypto-Curious Relatives at Thanksgiving

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It’s turkey time, and you know what that means: mountains of food, lots of reclining, and endless conversations with family members who describe what you do in passing as “computers.”

Well, dear reader, fear not because this year won’t be like the last few Thanksgivings. Crypto isn’t in the depths of a bear market, and your cousin doesn’t think you’re a crook anymore. 

Now crypto is ascending again—and everyone wants financial advice, just like Thanksgiving from three years ago.  

Below is a compiled list of handy talking points for your crypto-curious relatives, covering the industry’s most significant, recent developments. Stick to the facts, avoid shilling meme coins to the elderly, and you’ll be cruising to pie in no time.

Bitcoin just hit an all-time high price—why?

Bitcoin came within a few hundred bucks of the vaunted $100,000 milestone last week, and while the price has retreated a bit recently, it returned above $97,000 earlier Wednesday.

What’s driving the demand that’s pushed Bitcoin’s price record in recent weeks? Institutional and retail investors have expressed optimism that there will soon be a more favorable regulatory climate for digital assets in the U.S.

That’s thanks to the victory of self-proclaimed crypto enthusiast Donald Trump, along with the election of the most pro-crypto Congress to date.

Meanwhile, institutional investors’ forays into spot Bitcoin ETFs have also given traders reason to be optimistic, pumping up the price of Bitcoin over the year. In short, Bitcoin is more “legit” than ever in the eyes of Wall Street and politicians.

ETFs have made crypto investing simpler and safer

Your folks may have heard that BlackRock and Fidelity—which may be managing their pensions—are now involved in Bitcoin. What are these two Wall Street giants doing with crypto? Well, you can explain: They swallowed the orange pill. 

OK, so you probably don’t need to use Crypto Twitter jargon. Still, you can tell them that traditional finance bigwigs now offer exposure to the two largest digital assets, Bitcoin and Ethereum, via exchange-traded funds (ETFs).

Thanks to long-awaited SEC approvals this year, top fund managers who manage different ETFs now let ordinary investors buy shares that track the price of the two via brokerage accounts. Even your technophobic aunt can down the orange pill with a couple of taps on her phone.

Crypto could flourish further under Trump

On the campaign trail this year, Trump made lots of promises about lots of things, including crypto. And while it remains to be seen whether he will live up to many of those commitments, signals are already indicating that he may be holding up the crypto end of the bargain—which could be a massive development for the industry. 

First things first: last week, the president-elect nominated Scott Bessent as his Treasury Secretary. Bessent, a billionaire hedge fund manager, has indicated he’d back Trump’s proposal to establish a Bitcoin federal reserve. The plan would see the U.S. buy billions of dollars’ worth of Bitcoin to diversify its reserves. 

Think of it this way: If your uncle says Bitcoin has no real value, you might soon be able to tell him the U.S. government backs the asset.

Pair that with Trump’s plans to unwind the SEC’s aggressive crypto crackdown completely, plus his oath to get the Republican-controlled House and Senate to approve laws that would firmly legalize most crypto activity swiftly, and it’s no wonder crypto has exploded in recent weeks. Experts say the market still has much, much higher to climb in the coming months, too.

Elon Musk’s D.O.G.E. is a real thing

The world’s richest man, Elon Musk, now has a role in Trump’s government: The Tesla CEO will lead the Department of Governmental Efficiency (D.O.G.E.) with billionaire Vivek Ramaswamy to supposedly clear up the bureaucracy. 

What’s that got to do with crypto, though? Well, the new department’s acronym matches the ticker of Dogecoin, the original and most meme coin. That’s probably not a coincidence.

Elon Musk has for years spoken—and tweeted—about how it’s his favorite coin. This earned him the “Dogefather” title on Twitter, now called X, after he acquired the platform. While we can’t be 100% sure of the naming origins, Trump is selling a DOGE-themed t-shirt featuring himself, Musk, and a Shiba Inu—the mascot of Dogecoin.

Anyone can create a coin—and millions are trading

Don’t want to decide between Bitcoin or Ethereum? If you’d instead launch your own token, you can now do it much more efficiently than ever.

One of the most significant innovations from the most recent crypto cycle has been the creation of token launchpads, or platforms that allow anyone to near-instantly create a token with a few clicks and for a few cents worth of crypto.

The most notable launchpad, Pump.fun, a Solana-based platform, has given rise to some of the most memorable tokens from this cycle. Nearly four million tokens have been created on Pump.fun this year, ranging from animal tokens that have provided early traders with significant riches to those launched by crypto-curious celebrities like musician Iggy Azalea. 

It’s getting easier to handle crypto

Crypto’s adoption barriers keep getting knocked down. Consumers now have a wide breadth of mobile app options to buy, sell, and interact with a variety of platforms.

Plus, the rise in smart wallets, which drastically simplify the onboarding process, is making it easier to get those previously intimidated by the technical complexities of crypto to participate on-chain. 

With the launch of Ethereum and Bitcoin ETFs, those looking to gain crypto exposure have more traditional financial options. That option didn’t exist in the U.S. last Thanksgiving.

Tread carefully: Scams are still abundant

Are you looking to dive head-first into crypto? Not so fast—you’ll first want to get your sea legs. 

The crypto industry is rife with scams, and a seemingly innocuous link to an airdrop could lead you to a wallet drainer: Say goodbye to all your coins! 

Even if you manage to keep your crypto out of scammers’ grips, there’s no guarantee you’ll be able to keep your holdings from going to zero. Not many people make money trading crypto, and much fewer are getting rich off of it. Up to 80% of day traders lose money over time, according to a report published in The Journal of Finance.

It’s still incredibly easy to lose your shirt in crypto, whether by clicking a malicious link or betting on highly volatile coins. For newcomers, you’re probably best suited to sticking to the most significant coins via apps like Coinbase, Robinhood, Cash App, or buying into ETFs. 

Want to go deeper? Be very careful—you’ll be thankful in the long run.

Written by Sander Lutz, Elizabeth Napolitano, Mat Di Salvo, and Logan Hitchcock

Edited by Sebastian Sinclair

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Chill Guy Meme Coin Pumps Another 50% as Creator Fights Back

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From TikTok trends to crypto wallets, the “Chill Guy” meme has become an internet phenomenon, turning a laid-back cartoon dog into the face of a million-dollar market cap crypto.

Since its November 15 launch, the Chill Guy meme coin ($CHILLGUY) ballooned from a $10 million market cap to over $461 million, driven by the widespread popularity of the Chill Guy character—a relaxed anthropomorphic dog in a grey sweater, blue jeans, and red sneakers.

The Solana-based meme coin has increased in value by 50% over the last 24 hours alone, trading just shy of $0.50, per CoinGecko data. The token’s rise reflects the ongoing craze around meme coins, which continue to defy market norms with their volatile yet lucrative returns.

CHILLGUY features an anthropomorphic brown dog sporting a grey sweater, rolled-up jeans, and red sneakers, captivating audiences with its laid-back demeanor and has become a cultural phenomenon. 

Frequently paired with humorous captions on platforms like TikTok, the character embodies a carefree attitude, resonating particularly with Gen Z audiences.

However, the coin’s ascent has not been without controversy. Behind the meme coin’s success lies growing tension as the meme’s creator, Philip Banks, pushes back against what he calls unauthorized exploitation of his work.

“Just putting it out there, Chill Guy has been copyrighted. Like, legally. I’ll be issuing takedowns on for-profit related things over the next few days,” Banks tweeted last week. 

While Banks clarified that casual use by brands or individuals isn’t his target—“I just ask for credit. Or Xboxes.”—he noted unauthorized merchandise and shitcoins are crossing the line.

Despite these concerns, early adopters of CHILLGUY have seen massive returns, with one trader turning a $1,000 investment into over $1 million within days.

It isn’t the first time meme coins have demonstrated their ability to convert internet phenomena into financial windfalls. 

Recently, the Peanut the Squirrel (PNUT) token—inspired by the viral story of Peanut, a pet squirrel euthanized by New York authorities—reached a $1 billion market cap within two weeks, while the First Convicted Raccoon (FRED) coin climbed 383% in a day.

Edited by Sebastian Sinclair

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