The post Bitcoin Fees Skyrocket After Babylon Launches Native BTC Staking appeared on BitcoinEthereumNews.com.

Wondering why your Bitcoin transaction cost $100 this morning instead of pennies? Look no further than Babylon Labs, the team that just unlocked native staking capabilities for BTC. On Thursday at 11:38 UTC, Babylon announced the launch of the first phase of its Bitcoin staking mainnet, opening the floodgates for users to lock up their coins via self-custodial staking. Within 90 minutes, the median cost per Bitcoin transaction skyrocketed from $0.26 at block 857905 to a peak of $132 per transaction at block 857911, according to on-chain data from mempool.space. “With Babylon’s protocol, stake your Bitcoin directly on any [proof-of-stake] system and earn yield while maintaining total control,” wrote Babylon to Twitter on Thursday. “No third-party addresses, bridging, or oracles needed.” Babylon clarified that its staking system is still in Phase 1—a “locking-only phase” with no actual payouts to BTC stakers. In future phases, Babylon will launch a proof-of-stake (POS) chain secured by the coins locked during Phase 1, and eventually allow stakers to earn rewards by using the same stake to secure multiple POS blockchains. That incentive alone triggered an avalanche of inflows into Babylon, having reached its maximum staking total value locked (TVL) of 1,000 BTC ($60.7 million) within hours. That included funds from 12,710 stakers and 20,610 individual delegations. Being first in line required users to have their staking deposit transaction processed by Bitcoin miners before others could. Getting your transactions prioritized requires paying more money per transaction, thus inspiring a fee bidding war on Thursday that sent costs through the roof. CryptoQuant confirmed to Decrypt that Babylon was behind the fee spike, using on-chain evidence. “The sudden spike in total fees, from 0.3 Bitcoin to 9.6 Bitcoin [($18,090 to $579,000)] in an hour, is a result of transactions related to the launch of the Babylon protocol,”…

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Filed under: News - @ August 23, 2024 8:25 pm