Babylon Plans to Introduce BTC-BABY Mechanism: Aiming for De-Inflation and Ecosystem Balance
Babylon is making a strategic move to strengthen its long-term position by combining the de-inflation of BABY tokens with the implementation of a BTC-BABY co-staking model. This is an effort to create a more sustainable balance between supply and demand on the network while also expanding its connection to the Bitcoin community.
-De-Inflation – A Necessary Step for Long-Term Value
According to the latest governance proposal, BABY’s annual inflation rate will be reduced from 8% to 5.5%, which means a reduction in supply growth of approximately 30%. This will help limit selling pressure from staking rewards while increasing scarcity – a core element to protect value for long-term holders.
-BTC-BABY – a bridge between Bitcoin and the Babylon ecosystem
The highlight of the plan is BTC-BABY staking, a co-staking mechanism that allows Bitcoin investors to increase their profits by incorporating BABY. This model not only encourages participation from the Bitcoin community but also directly increases the demand for Babylon's native token.
The new reward structure is distributed as follows:
1% for BTC stakers.
2% for BABY stakers.
2.35% for BTC-BABY co-staking participants.
0.15% for validators and infrastructure providers to maintain network security.
Roadmap: September Testnet – October Mainnet
Babylon plans to test this mechanism on the testnet in September, before officially launching the mainnet in October. This is considered an important testing step to verify the performance of BTC-BABY as well as the actual impact on the reward distribution system.
-Implications for the ecosystem
By simultaneously reducing inflation and engaging BTC holders, Babylon is shaping a hybrid staking model to:
Reduce selling pressure from high inflation rewards.
Increase incentives to hold BABY long-term.
Attract capital flow from Bitcoin into the network.
Maintain network security thanks to a transparent reward mechanism.
👉 The BTC-BABY proposal shows that Babylon not only adjusts the inflation policy but also builds a sustainable bridge between Bitcoin's long-standing storage value and BABY network utility - a strategic step in the next phase of development.
