<p>This article will guide you through everything you need to know to start staking BTC with Babylon ahead of their mainnet launch on 22nd August 2024.</p><p>Join the Bitcoin staking revolution and be one of the first to earn staking rewards from your idle BTC!</p><h2>What is BTC Staking?</h2><p>Babylon extends the concept of Bitcoin, allowing Bitcoin holders to stake their BTC and contribute to the security of PoS networks while earning rewards. Babylon achieves that without bridging BTC to other networks and acts as an intermediary layer between Bitcoin blockchains and Cosmos zones. The staked Bitcoin is secured through advanced cryptographic mechanisms and Bitcoin scripts, making it possible to stake BTC in a way that is safe, slashable, and capable of earning rewards. Babylon Protocol offers features like delegable voting power, on-demand unbonding, and restaking across multiple PoS systems.</p><h3>How will Bitcoin staking with Babylon work at launch?</h3><p>Babylon Bitcoin Staking is being launched in three key phases, each designed to progressively integrate Bitcoin holders with the security needs of Proof-of-Stake networks.</p><ul><li><strong>Phase 1:</strong> Bitcoin Locking - Bitcoin holders lock their BTC in a self-custodial staking script, preparing it for participation in PoS consensus.</li><li><strong>Phase 2:</strong> Bitcoin Staking Activation - The Babylon PoS chain is launched, and delegated Bitcoin begins contributing to the chain's consensus and security through finality providers.</li><li><strong>Phase 3:</strong> Bitcoin Multi-Staking Activation - The protocol evolves into a shared security marketplace, allowing Bitcoin holders to stake the same BTC across multiple PoS systems simultaneously.</li></ul><p>Phase 1 of Babylon's mainnet launch is scheduled for August 22, 2024.</p><h2>A Step by Step Guide to Stake BTC</h2><p>The following steps outline how to stake your BTC with Babylon via the Stake App on Staking Rewards.</p><p><strong>Important to note:</strong></p><p>The initial staking cap for Babylon’s Phase 1 Mainnet launch is&nbsp;<strong>1,000 BTC</strong>. This cap will likely &nbsp;fill very quickly.</p><p>It is recommended that you have Step 1 prepared ahead of time, to be ready for when BTC staking goes live.</p><p>Bitcoin (BTC) staking on Babylon will be activated once the BTC block height passes&nbsp;<strong>857909</strong>. At this exact point, the&nbsp;<strong>“Stake Now”</strong> button will be activated in the Stake App and BTC staking transactions can be submitted.&nbsp;</p><p>The cap will be raised in Phase 2, which is expected to begin 4 weeks after Phase 1 ends.</p><h2>Step 1: Prepare a supported Bitcoin wallet</h2><p>For the Phase 1 mainnet, the Stake App will only support BTC staking via&nbsp;<a href="https://www.okx.com/web3">OKX Wallet</a>. Install the <a href="https://www.okx.com/web3">OKX wallet browser extension</a> and deposit your BTC before proceeding to the next step.</p><p>When setting up and funding your wallet, it is important to:</p><ul><li><strong>not use</strong> a hardware a wallet (such as Ledger), aside from Keystone QR code either directly or through other software wallets</li><li><strong>not use</strong> a wallet that holds any Bitcoin Inscriptions</li><li>choose either&nbsp;<strong>Native Segwit</strong> or&nbsp;<strong>Taproot</strong> address format in your wallet (when switching between the two, you may need to disconnect and connect your wallet again for change to update in the Stake App UI)</li></ul><h2>Step 2:<strong>&nbsp;</strong>Start staking BTC</h2><p>Navigate to the&nbsp;<a href="https://www.stakingrewards.com/stake-app?input=bitcoin&amp;type=babylon-staking">Stake App</a> on Staking Rewards.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Connect_Wallet_7011de4ca9.png" alt="Connect Wallet.png" width="1440" height="886"></p><h2>Step 3: Connect your Bitcoin wallet</h2><p>Connect your wallet. Allow the application access and sign signature request, if you’re visiting the website for the first time.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Wallet_20345fb7b9.png" alt="Wallet.png" width="1440" height="886"></p><h2>Step 4: Choose a provider</h2><p>Select a preferred provider from the available options. Providers with the blue checkmark have all passed our&nbsp;<a href="https://www.stakingrewards.com/vsp">Verified Staking Provider (VSP) program</a>.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Providers_98900d008a.png" alt="Providers.png" width="1441" height="987"></p><h2>Step 5: Determine the transaction fee</h2><p>Keep the current network fee or prioritize your delegation by increasing the transaction fee.</p><p><strong>Reminder:</strong> The cap for Phase 1 is likely to fill up very quickly (around 20 - 40 mins). The higher you set your fee, the higher the likelihood your BTC will be staked to the next block, before the cap is filled.&nbsp;</p><p>If your stake arrives after the cap is filled, then it will be in the “overflow” status and you will need to unbond and withdraw your BTC.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Transaction_Fee_b17a400653.png" alt="Transaction Fee.png" width="1441" height="987"></p><h2>Step 6: Enter the BTC amount</h2><p>Input the number of BTC you want to stake. Select or switch the address format in your wallet. During Babylon Phase 1, you have the option to stake between&nbsp;<strong>0.005</strong> and&nbsp;<strong>0.05</strong> BTC per transaction.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Stake_06655ec269.png" alt="Stake.png" width="1440" height="1067"></p><h2>Step 7: Stake BTC</h2><p>Finalize the staking process by clicking&nbsp;<strong>“Stake”</strong> and confirm the transaction in your wallet.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Stake_413f5f0d23.png" alt="Stake.png" width="1440" height="987"></p><h2>Step 8: Complete the process</h2><p>Congratulations you have successfully staked your BTC to Babylon. You can now track your staked position via the&nbsp;<a href="https://www.stakingrewards.com/terminal">Staking Terminal</a>.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Congrats_6a8d71f7f9.png" alt="Congrats.png" width="1440" height="987"></p><h2>How to Choose a Finality Provider?</h2><p>Bitcoin stakers are effectively delegating their BTC to a Finality Provder (FP). When a Bitcoin holder enters into a staking contract, they lock their assets into a self-custodian vault and designate to a preferred FP. This provider will be responsible for validating transactions and securing the Babylon PoS chain, and in return, the staker can earn rewards for their participation.</p><p>Staking your BTC with a dependable and high-performing provider is crucial. To facilitate this, we introduced our Staking Rewards&nbsp;<a href="https://www.stakingrewards.com/vsp">Verified Staking Provider (VSP) </a>program in June 2022. The initiative helps you conduct your due diligence on a potential validators, assessing factors like security protocols, on-chain reliability, provider infrastructure, and ecosystem contributions.</p><p>There are top 30 Finality Providers that are already part of the VSP program. They are indicated with the blue checkmark in the <a href="https://www.stakingrewards.com/stake-app?input=bitcoin">Bitcoin Stake App</a>, or on the <a href="https://www.stakingrewards.com/asset/bitcoin#section-stake-BTC">Bitcoin asset profile</a>.</p><p>When choosing a provider to delegate to, consider alternative metrics relatable to Cosmos-based network providers, such as:</p><ul><li><strong>Performance:</strong> Select providers with the highest possible uptime, ideally 99% or above, and a consistent track record.</li><li><strong>Number of Users:</strong> The number of delegators can influence your choice of providers. More delegators typically reflect positively on the validator's reputation.</li><li><strong>Commission:</strong> Providers charge fees. A high commission rate reduces your rewards, while a low rate may impact the validator's profitability and long-term viability.</li><li><strong>Validators Self-Staked Balance:</strong> A provider with a high amount of staked tokens likely has more incentive to continue operating their services as they have more to lose than those with low self-staked balances.</li><li><strong>Network Share:</strong> Delegating to the most popular providers can increase centralization risks. Conversely, smaller validators may face profitability challenges, potentially leading to service discontinuation. Supporting smaller validators can help decentralize the network, but requires regular monitoring to ensure they remain active.</li><li><strong>Current Status:</strong> Verify the provider’s status on the Staking Rewards asset page or confirm their activity using blockchain explorers.</li></ul><h2>How are Rewards Generated from Staking Bitcoin?</h2><p>Ultimately, Bitcoin stakers will earn rewards for securing PoS chains denominated in networks' tokens. However, this will be enabled in the third phase of the Babylon Bitcoin Staking. During Phase 1 there are no direct staking rewards since no active PoS chain exists yet. Instead, a point system is used to measure and track each staker's activities via their public key.</p><p>Under this system, 3,125 Babylon points are allocated per Bitcoin block, distributed proportionally among all active stakes within that block. Only active stakes earn points, while statuses like overflow, unbonding, and withdrawn do not receive any points. Both the staker and the finality provider earn points, with the finality provider's share determined by their commission rate. This points allocation is specifically tied to the initial cap and may be adjusted as Phase 1 progresses.</p><h2>BTC Staking Details</h2><ul><li>Phase 1 staking cap:&nbsp;<strong>1,000 BTC</strong></li><li>Minimum amount required for staking:&nbsp;<strong>0.005 BTC</strong></li><li>Maximum staking amount:&nbsp;<strong>0.05 BTC</strong></li><li>Unbonding time:<strong>&nbsp;7 days in Phase 1</strong></li><li>Maximum staking time:<strong>&nbsp;64,000 Bitcoin blocks (~15 months)</strong></li><li>Babylon points issuance:&nbsp;<strong>3,125</strong> per Bitcoin block</li></ul><h2>Where to buy BTC?</h2><p>You can acquire BTC tokens on centralized cryptocurrency exchanges. Always do your own research when selecting a reputable cryptocurrency exchange. For optimal security, it’s advisable not to leave your tokens on an exchange, but to transfer them to your non-custodial or cold/hardware wallet after purchasing. You can buy BTC here:</p><ul><li><a href="https://accounts.binance.com/register?ref=38719582">Binance</a></li></ul><h2>Track your staking portfolio</h2><p>Track your position using the&nbsp;<a href="https://www.stakingrewards.com/terminal">Staking Terminal</a>. To learn more about the data points please read more in the&nbsp;<strong>FAQ</strong> section on the&nbsp;<a href="https://www.stakingrewards.com/asset/bitcoin">BTC Asset Page</a>.</p><h2>How to Unstake BTC?</h2><p>To unstake your BTC follow the the steps below:</p><h3>Step 1:<strong>&nbsp;</strong>Go to the Staking Terminal</h3><p>Visit the&nbsp;<a href="https://www.stakingrewards.com/terminal">Staking Terminal</a> to view your staking positions.</p><h3>Step 2: Connect your Bitcoin wallet</h3><p>Connect the wallet you staked with previously.</p><h3>Step 3: Manage delegations</h3><p>Navigate to the&nbsp;<strong>“My Holdings”</strong> tab to view your staked positions.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Staking_Terminal_1a6964439a.png" alt="Staking Terminal.png" width="1361" height="1363"></p><h3>Step 4: Unbond BTC</h3><p>Click on position details and select&nbsp;<strong>“Unbond”</strong>. Confirm the transaction in your wallet.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Unbonding_943ef28ab4.png" alt="Unbonding.png" width="1360" height="1363"></p><h3>Step 5: Withdraw BTC</h3><p>Once the unbonding period ends, you can withdraw your BTC.</p><p><img src="https://tidy-ball-c49dc59f59.media.strapiapp.com/Withdrawal_83101c3c96.png" alt="Withdrawal.png" width="1360" height="1075"></p><h2>Conclusion</h2><p>Staking Bitcoin with Babylon is a revolutionary way to enhance the security of Proof-of-Stake networks while allowing BTC holders to earn rewards without bridging their assets.</p><p>Congratulations on taking this significant step! You're not only maximizing your investment returns but also playing a role in decentralizing and securing PoS networks.</p><p>Don't keep this opportunity to yourself! Share this tutorial with your friends and help them start staking too! Together, we can build a stronger, more decentralized future for the Babylon.</p><p>Lastly, don’t forget to check out the&nbsp;<a href="https://www.stakingrewards.com/asset/bitcoin">BTC Asset Page</a> for more insights into staking BTC, and drop us a&nbsp;<a href="mailto:content@stakingrewards.com">message</a> if you find this tutorial useful. Happy staking!</p>

How to Stake Bitcoin with Babylon: A step by step guide to stake BTC

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