What is PumpBTC (Governance token) (PUMP)?

Deep Dive

1. Purpose & Value Proposition

PumpBTC solves Bitcoin’s limited utility in DeFi by letting users stake wrapped BTC (like WBTC) to earn rewards through Babylon – a Bitcoin staking protocol. It consolidates fragmented BTC derivatives markets into a unified yield-generating system (CoinMarketCap). Unlike traditional bridges, PumpBTC never directly holds user assets, instead relying on licensed custodians like Cobo MPC to manage BTC deposits securely.

2. Technology & Workflow

The protocol operates on EVM chains (Ethereum, BSC) with plans for Berachain and Base integration. When users stake wrapped BTC:
- The custodians delegate equivalent native BTC to Babylon’s Finality Providers
- Users receive pumpBTC tokens representing their stake + accrued yields
- Instant unstakes draw from pending deposits (with a 3% fee), while standard unstakes take ~10 days

3. Governance & Tokenomics

PUMP serves as both a governance token and receipt for staked BTC. Key mechanics:
- Supply: 1B total, 285M circulating (as of August 2025)
- Utility: Votes on protocol upgrades, fee adjustments, and chain expansions
- Yield Sharing: Rewards from Babylon staking auto-compound into pumpBTC balances

Conclusion

PumpBTC reimagines Bitcoin’s role in DeFi by combining institutional-grade custody with cross-chain yield automation. Its success hinges on balancing liquidity needs with Babylon’s staking cycles – can it sustain instant redemptions during volatile markets while scaling to new chains?