In today’s newsletter:
🔎Babylon launch. And what it means for Bitcoin
📊On-chain alpha
😂Crypto meme of the week
🗞️The latest DeFi news
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🔎Babylon goes live on mainnet
Despite ETH’s recent poor performance, many people (including myself) continued to hold some ETH due to the high number of good yield farming opportunities.
Restaking made it possible to earn a high double-digit yield or even triple-digit annual yield on ETH. This obviously made it more attractive as an investment.
Babylon, a Bitcoin Staking protocol, just went live on mainnet today and it might enhance BTC's appeal as an investment in a similar way.
Here's what you need to know about Babylon if you haven't heard of it before:
Babylon enables BTC holders to stake their BTC in order to secure certain Proof-of-Stake blockchains in exchange for a yield
The project has already raised over $70M in funding, which is more than Eigenlayer raised before its mainnet launch
Its points program has also gone live to reward early adopters
Why is Babylon launch such a big deal?
Babylon gives me early Eigenlayer vibes.
While Eigenlayer allows blockchains to borrow security from ETH restakers, Babylon allows blockchains to borrow security from BTC stakers.
Given the huge success of Eigenlayer’s ETH restaking, I expect BTC Staking to also get a lot of traction. BTC has already been in the spotlight for a while.
If my thesis is correct, the launch of Babylon’s BTC Staking will increase the demand for BTC as many people will be interested in farming its airdrop.
Besides this, one more reason why I’m bullish on Babylon is that it already has a large ecosystem full of interesting DeFi applications on day one.
Here’s a short overview of the top ones:
(important note: most of these dApps have a maximum TVL cap that has already been hit, but it will be increased in the next months)
1. Solv Protocol
Solv is building a decentralized Bitcoin Reserve and has recently also introduced its BTC liquid staking solution for Babylon, SolvBTC.BBN.
A few key things to know about it:
Solv is backed by Blockchain Capital and Binance Labs
The protocol currently has $980M in TVL
SolvBTC.BBN, its BTC staking solution, can be minted and used on multiple chains: BNB Chain, Ethereum, Arbitrum, Mantle, Avalanche, Merlin
Airdrop opportunity:
Deposit FBTC or WBTC in exchange for SolvBTC on Solv (or buy it on a DEX on Ethereum L1)
Stake SolvBTC in exchange for SolvBTC.BBN on Solv
(optional #1) deposit SolvBTC.BBN on Fuel, an Ethereum L2
(optional #2) deposit SolvBTC.BBN on Mezo, a Bitcoin ecosystem project
Through this strategy, you can farm up to 3 airdrops at once: Babylon, Solv Protocol, and Fuel/Mezo.
2. pSTAKE Finance
pSTAKE is a fast-growing BTC liquid staking solution built on Babylon.
A few key things to know about it:
pSTAKE is backed by Binance Labs, DeFiance Capital, and Coinbase Ventures
The protocol currently has $5.6M in TVL
Its early users will get boosted points in pSTAKE‘s upcoming points program
Airdrop opportunity:
Deposit BTC using Ledger, Bitget, or OKX Wallet on the pSTAKE platform
By doing this, you can farm Babylon and pSTAKE airdrops at once, while potentially also earning other $PSTAKE token incentives.
In the future, BTC stakers will also get YBTC in return, a pSTAKE-issued yield BTC token on Ethereum, which they will be able to use in DeFi.
3. Babypie
Babypie is the latest SubDAO launched by Magpie, one of the top DeFi projects in the Ethereum ecosystem.
A few key things to know about it:
Babypie is focused on providing liquid staking services for Bitcoin and is built on top of Babylon
The protocol currently has $2.5M in TVL
Its points program is already live, with 8% of Babypie’s token supply being allocated to the first airdrop
Airdrop opportunity:
Register with your BTC & Ethereum addresses on the Babypie website
Deposit BTC and claim mBTC (its liquid staking token) on Ethereum
On top of getting an airdrop, Babypie’s early users will also be allowed to participate in the protocol’s future token sale at 20M FDV.
Besides these protocols, here are a few other honorable mentions:
Persistence One - a PoS network built to enable BTC Cross-Chain Swaps which will be among the first blockchains secured through Babylon
PumpBTC - another fast-growing Babylon liquid staking protocol
Lombard - the protocol behind a cross-chain yield-bearing BTC liquid staking token
I believe that Babylon could easily reach $1 billion in TVL in the next 6-9 months.
Today, Babylon went live on mainnet with a 1000 BTC staking cap. And that cap has been hit in just a few hours.
After ETH restaking, BTC Staking might be the next big DeFi narrative.
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On-chain Alpha🔎
BTC dominance increased by ~50% in the past 2 years
Since the FTX collapse happened, Bitcoin Dominance skyrocketed from 38% to a whopping 56% of the total crypto market cap today.
If this bull market proves to be similar to the previous ones, I believe this is one of the best signs that the best part of it is still ahead of us.
Historically, an altseason starts only after BTC dominance begins decreasing.
So far in this cycle, BTC dominance has only gone up.
Crypto Meme😂
The latest developments in DeFi
Arbitrum DAO approved launching the Stylus Upgrade on mainnet. Stylus will enable developers to write smart contracts using Rust, C, and C++
Clearpool unveiled Ozean, the first blockchain for RWA yield built on Optimism
Sonic Labs (previously Fantom) announced its points program. Up to 30 winning projects can earn Gems by developing innovative apps on the network
Babylon, a Bitcoin staking protocol, has launched on mainnet. It enables staking BTC to secure PoS networks
GammaSwap introduced its token $GS and announced its upcoming LBP starting on Aug. 30 on the Gammaswap website. You can find more details about its LBP here
Zero1 Labs introduced Cypher, an EVM blockchain that unlocks confidential compute for AI-powered dApps. Cypher is expected to launch on testnet in Q4
Drift Protocol introduced BET, the first capital-efficient prediction markets on Solana
Solv Protocol’s SolvBTC.BBN became the first omnichain Bitcoin LST
Metamask introduced MetaMask Card: a Mastercard debit card that enables instant spending directly from your self-custody wallet
INFINIT, the first DeFi Abstraction Layer, was introduced. INFINIT provides a wide range of tools that streamline the development of new dApps
Kamino’s Season 2 Airdrop went live. Eligible participants can claim it for 6 months
Cronos zkEVM has officially launched its alpha mainnet. This is an Ethereum L2 developed by the Crypto.com team using zkSync tech
Tether USDT is launching on Aptos L1
Galxe, a Web3 credentials & rewards platform, launched the alpha mainnet of its L1 blockchain
That’s all for this week!
Until next time,
The DeFi Investor
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