The Nomic DAO Foundation has introduced stBTC, a Bitcoin token representing liquid staked BTC (LST), which functions using Babylon’s Bitcoin staking method. Users can now utilize their existing Bitcoins to bolster security for other blockchains and reap incentives in the form of alternative digital currencies.
How Does the Staking Protocol Function?
With Babylon’s Bitcoin staking process, users can place their Bitcoins as stake directly on the Bitcoin blockchain. To do this, users need to initiate a Babylon staking transaction, which contains an output that becomes accessible for slashing if a validator needs to be penalized. In contrast, if no penalties are imposed, users can retrieve their BTC after a certain duration.
Nomic and Babylon work together smoothly. When users deposit their nBTC into Nomic’s Bitcoin staking pool to generate stBTC, the system moves the corresponding BTC funds to a staking address in Babylon. This process guarantees that users’ Bitcoin is utilized for securing consumer chains and empowers validators selected by the governance.
The new initiative grants exclusive perks to its participants. By depositing their nBTC into the staking pool, they become eligible to generate stBTC. Rewards in diverse ecosystem tokens are up for grabs, dispensed by networks that opt for securing Bitcoin through staking.
With the introduction of the new project, users now have the flexibility to offload or trade their stBTC instantly due to its fully liquid nature. Furthermore, users can choose to destroy the new token in exchange for nBTC through the unbonding process. However, please note that the unbonding period may last up to 7 days, though it could be quicker under certain circumstances.
Testnet and Dual-Stake Security
At present, the project is being put through its paces in a dedicated test network, where users have the opportunity to try out its features and advantages prior to the main network launch. This testing phase makes use of the most recent Bitcoin staking testnet from Babylon, which incorporates Signet BTC. By depositing Signet BTC into Nomic, users can acquire testnet nBTC and subsequently stake it for stBTC at the address stbtc-testnet.nomic.io.
Moving forward, Nomic intends to be among the initial proof-of-stake networks to integrate Babylon’s Bitcoin staking feature, thereby enhancing Nomic’s security through both staked NOM and BTC via Babylon. By staking their Bitcoin with Babylon on Nomic, users will receive returns in both NOM and nBTC tokens, which can be exchanged for BTC – a distinctive advantage only offered by Nomic. According to the official announcement, this is how Nomic plans to differentiate itself.
After the launch of Babylon’s mainnet, there will be a proposition for enhancing Bitcoin stake security through governance.
The Collaboration Is Bullish for NOM
Nomic’s latest update has caused excitement among investors about its native token. With over 10,000 followers on X platform, Jonabel Belz – an avid supporter of the foundation – praised the project and voiced her confidence in NOM. Her message read: “I’m really bullish about these two Cosmos projects collaborating. Keep investing in $NOM.”
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2024-04-10 13:00