In the ever-evolving world of blockchain technologies, interoperability and security are two fundamental pillars to ensure the success and growth of decentralized networks. In this context, the integration between Cosmos Hub and Babylon is opening new horizons, allowing an unprecedented aggregation of security from multiple sources. But what does this integration mean in practical terms and how will it influence the cryptocurrency landscape?
The Cosmos ecosystem has already proven to be a leader in providing security through Proof of Stake (PoS) to its consumer chains.
However, the alliance with Babylon, based on Bitcoin staking technology, could take this security to new levels, directly involving Bitcoin holders in the PoS security process.
Unlocking 21 million Bitcoins to ensure the decentralized economy, Babylon leverages cutting-edge cryptographic technologies like Extractable One-Time Signature (EOTS) to convert security issues such as slashable PoS attacks to spendable Bitcoin UTXOs for burning.
This, along with Bitcoin’s native time-lock, allows Bitcoin holders to stake their Bitcoin and participate in PoS security by simply locking their Bitcoin on the Bitcoin network.
No third parties are involved, and Bitcoins are secure as long as the staker doesn’t attack the PoS chain.
Babylon also implements the most advanced Bitcoin timestamping protocol to enable tight synchronization between Bitcoin and PoS chains, allowing quick unlocking of locked bitcoins.
Babylon’s Bitcoin staking protocol allows consumer chains to purchase economic security from staked Bitcoins and acts as a control plane to facilitate this operation.
Bitcoin holders can securely stake their Bitcoin and choose which PoS chain to stake and earn rewards.
PoS chains and dApps can choose to adopt Bitcoin-backed security and enjoy high security, a healthy economy, and broader adoption. The protocol is modular and can protect any PoS chain. It also allows scalable restaking for Bitcoin holders, simultaneously staking on multiple PoS chains.
Essentially, Babylon will allow Bitcoin holders to stake their BTC on Cosmos Hub’s consumer chains, thus creating a vast security reserve from one of the world’s largest cryptocurrencies.
This will have several positive effects:
1. Cosmos Hub’s consumer chains will have access to hundreds of billions of dollars in potential security from Bitcoin stakers, solidifying their position as one of the safest and most reliable networks in the blockchain landscape.
2. Cosmos Hub will become a major Security Aggregator hub, bringing together not only Bitcoin stakers but also a consolidated set of validators and cutting-edge consumer chains.
This consolidation of security will make the entire Cosmos ecosystem even more resistant to external attacks and security threats.
3. Thanks to Babylon, Bitcoin holders will have the opportunity to actively participate in the security of Cosmos Hub’s consumer chains, earning rewards simply and securely by locking their BTC.
The operation of this integration is supported by CometBFT technology, an extension that will be added to both the Cosmos Hub blockchain and all consumer chains. This will allow Bitcoin stakers to select a Hub validator to stake on, thus adding the power of their BTC to the chosen validator on Cosmos Hub and all associated consumer chains.
Importantly, this does not introduce new trust assumptions. Babylon’s Bitcoin staking protocol does not require bridging and is trustless and self-custodial.
Thanks to Babylon’s Bitcoin staking protocol, no third parties are involved, and Bitcoins are secure as long as the staker does not attack the PoS chain. Each consumer chain will be able to set a security budget for each asset that is reissued through Cosmos Hub.
For example, a consumer chain may decide to allocate 75% of rewards to native token holders, 15% to ATOM security, and 10% to reissued bitcoins. Additionally, consumer chain rewards allocated to Bitcoin restorers will be subject to a small fee that will go to ATOM holders.
In conclusion, the integration between Cosmos Hub and Babylon represents a significant step towards interchain interoperability and security in the world of cryptocurrencies. Through this alliance, Cosmos confirms itself as one of the most advanced and innovative networks, offering users and developers a secure, reliable, and opportunity-rich ecosystem. With Babylon, the future of PoS security opens up new perspectives, actively involving the Bitcoin holder community and creating unprecedented synergies in the world of cryptocurrencies.
