The Bitcoin staking frenzy on the Babylon platform caught everyone’s attention on Thursday, with the BTC transaction fee soaring by a staggering 120x all the way to 60 BTC during the staking hours. Soon after the staking process ended, the fees returned to normal hours later.
Babylon is an innovative project that allows Bitcoin holders to leverage the Proof-of-Stake (PoS) mechanism and earn yield by staking their Bitcoins without giving up on their custody. Thus, the platform puts complete security and control in the hands of the Bitcoin holders. “No third-party addresses, bridging, or oracles needed. What happens on Bitcoin, stays on Bitcoin,” noted Babylon Labs.
On Thursday, Babylon Labs successfully completed Phase 1 of its Bitcoin staking while seeing an overwhelming response. Within hours of launch, the project announced reaching their staking cap of 1,000 Bitcoins.
Note that Phase 1 is a locking-only phase with no actual payout to BTC stakers. In the upcoming phase Babylon will launch a Proof-of-Stake chain to secure the BTC locked during Phase 1. Eventually, stakers will be able to earn rewards by using the same stake to secure multiple PoS blockchains.
Solv Protocol had the lion’s share with the successful staking of 250 BTC, delegated to OKX Earn finality providers. This move solidifies SolvBTC.BBN’s position as the leading liquid staking solution for Babylon Labs. Additionally, Solv will cover all gas fees for Babylon’s Cap 1 initiative. During the Pase 1 round, a total of 12,710 stakers participated with 20,610 individual delegations.
Julio Moreno, Head of Research at CryptoQuant, reported that during the Bitcoin staking event on Babylon, the BTC transaction fee surged from 0.5 to 60 BTC per hour. Obviously, this was due to the large rush of transactions as users rushed to stake their BTC on the staking protocol which had a cap of 1,000 Bitcoin.
Each staking transaction required 0.05 Bitcoin, leading to heightened fees as participants hurried to stake. Now that the staking period has ended, both transaction fees and activity have returned to normal levels.
This surge in the BTC transaction fee might have provided some relief to Bitcoin miners although a very short period. Amid this development, the Bitcoin price continues to hold above $60,000 with BTC bulls attempting another 10% gain to $66,000. Market analysts are confident that the Bitcoin rally will continue amid Donald Trump’s crypto backing.
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