Babylon's Bitcoin staking protocol offers a practical solution for Bitcoin holders to stake their BTCs on other systems directly, without the need for third-party custody, bridges, or wrapping. The protocol provides BTC-backed economic security guarantees to consumer systems. It is designed as a generic and modular plug-in, making it compatible with various consumer systems. Babylon's BTC staking protocol is also a primitive that supports the development of further restaking protocols, providing a straightforward and secure way to enhance Bitcoin's functionality in the blockchain ecosystem.

This page provides a full specification of the BTC staking integration, to guide the implementation efforts for consumer systems.

System overview

The consumer integrated with the Babylon BTC staking protocol will have the following architecture.

Within this architecture:

• The Babylon chain integrates with Bitcoin for BTC staking and BTC timestamping protocols. Vigilantes relay information between Babylon and Bitcoin to keep them synchronized.
• BTC stakers delegate their BTC to finality providers of the Babylon chain and consumers.
• Finality providers participate in the finality voting round of their corresponding systems.
• The Babylon chain and a consumer chain exchange information about BTC staking via a relayer program. The relayer can be a standard IBC relayer if the consumer is a Cosmos SDK chain that supports IBC protocol, or a specialised one if the consumer does not support IBC.
• In case the consumer chooses not to trust the Babylon chain, a BTC staking monitor could monitor safety/liveness issues happening in the Babylon chain and raise alarms to the consumer.

Organisation of this specification

Babylon team develops and maintains the blue parts in the above architecture.

Babylon and Bitcoin

To integrate the consumer with the BTC staking protocol, a consumer needs to develop the following software (grey parts in the architecture), specified in each of the following documents:

Modules in the Consumer System

Finality Provider

BTC Staking Relayer

BTC staking monitor (WIP)