Babylon launches the BABY token today after a short delay from Binance. The token quickly rose 40% to $0.15 due to listing excitement, but airdrop selling and profit-taking caused BABY to drop sharply afterward.
In the past week, Babylon's airdrop has been controversial. At the time of writing, the token's market capital is just under $185 million.
Airdrop and BABY Token Launch
Token staking is a popular way to earn passive income in this field and is developing significantly. Last year, Babylon began offering Bitcoin staking and added on-chain yield shortly after.
Today, Babylon launched the new BABY token, starting trading on Binance.
"Binance is pleased to announce that Babylon (BABY) will be added to Binance Simple Earn, 'Buy Crypto,' Binance Convert, Binance Margin, and Binance Futures," the crypto exchange declared in its announcement.
Binance, the world's largest crypto exchange, was a natural candidate for Babylon's BABY launch. It dominates most crypto airdrops and provides very popular listings. The company had to delay the official launch by a few hours, but everything went smoothly.
BABY was also listed on several other crypto exchanges, including MEXC, which hosted an exclusive BTC Fixed Savings event with an APY of up to 99% to welcome the BABY token listing.
Babylon BABY price chart since launch. Source: CoinGeckoBabylon is a decentralized protocol that allows self-managed Bitcoin staking. It enables stake holders to stake directly on the Bitcoin network to enhance security without giving up control of their assets.
Last week, the project airdropped 600 million tokens before the token launch. This initial airdrop represents 6% of the total BABY token supply, distributed to early users in several categories.
These categories include Phase 1 stakers, NFT Pioneer Pass holders, and contributing developers.
However, immediately after this airdrop, over $21 million worth of Bitcoin was unstaked from the Babylon protocol within 24 hours.
Growing Concerns about Tokenomics
Moreover, its tokenomics show that nearly 66% of the total supply is controlled by insiders or funds. This large allocation raises concerns about the potential concentration and influence insiders might have on the project's future.
However, some community members reject these concerns and support the project. Despite the high insider allocation, access to this allocation is controlled and structured to prevent market abuse.
Compared to recent examples where insiders had early staking rights and sold rewards, like EigenLayer, Babylon deliberately built protective measures into its tokenomics to maintain fairness and avoid token sell-offs.
Investment funds, team, and advisors have no token unlocking rights in Year 1. This prevents early investors from getting ahead of the market and selling tokens during the protocol's most vulnerable development stage.
Most importantly, insider tokens are not allowed to be staked, which is very rare.
Overall, the token's long-term performance will reflect the sustainability of these tokenomics. Babylon's approach to Bitcoin staking has attracted significant attention, but the airdrop and subsequent unstaking activities highlight the dynamic nature of user participation in incentive programs.
