Babylon

DeFi

Bitcoin

Crypto exchange <a href="https://yellow.com/news/thena-joins-binance-airdrops-platform-with-the-token-listing">Binance</a> is entering the decentralised finance (DeFi) sector by launching an <a href="https://www.binance.com/en/support/faq/introduction-to-binance-on-chain-yields-8bd52090da0146d398d10ed389f9dc67?hl=en">On-Chain Yields program</a> on December 9. The world’s largest crypto exchange wants to integrate DeFi opportunities into its centralized ecosystem where Babylon <a href="https://yellow.com/asset/btc">BTC </a>staking will be offered initially. 
Binance wants to make DeFi blockchain protocols more accessible to everyone through the On-Chain Yields program, blurring the boundaries of CeFi and DeFi. 
<h2 id="on-chain-yields-program-to-offer-babylon-btc-staking">On-chain Yields Program To Offer Babylon BTC Staking</h2> 
For this, the crypto exchange is <a href="https://cryptodaily.co.uk/2024/12/binance-bridges-cefi-and-defi-with-babylon-btc-staking-through-on-chain-yields">offering,</a> <a href="https://support.bitrue.com/hc/en-001/articles/40852054270873-Babylon-Bitcoin-Staking-9-Things-You-Need-to-Know">Babylon</a>, the On-Chain Yields program under Binance Earn has been launched. The main agenda of it is to break the technical barriers of DeFi. The Babylon Protocol isn't like other yield farming programs as it is a self-custodial BTC staking protocol that lets Bitcoin holders earn yields from PoS chains by sharing the crypto-economic security of the digital asset. 
This technology eliminates the necessity of a bridge as holders can lock BTC on the Bitcoin network and stake it to any IBC-enabled PoS blockchain to earn yields. The protocol uses its own PoS blockchain called Babylon Chain for cross-chain trading between Bitcoin and PoS blockchains. 
There is a timestamping service in the Bitcoin network with transactions from PoS blockchains checkpointed onto BTC for long-range security. The BTC staking protocol acts as a marketplace which connects PoS blockchains with BTC holders, allowing the following: 
<ul> 
 <li>The PoS blockchains to receive Bitcoin security</li> 
 <li>BTC holders earn yield for providing security.</li> 
</ul> 
<h2 id="shorter-redemption">Shorter Redemption</h2> 
Although the On-Chain Yields program offered by Binance will initially start with Babylon BTC staking it will include other protocols and help crypto users adopt DeFi. 
Crypto traders on Binance can take part in the on-chain protocols and stake coins to earn rewards in points, tokens and other formats. 
The crypto exchange will manage the <a href="https://www.binance.com/en/support/announcement/binance-earn-introduces-on-chain-yields-with-the-launch-of-babylon-btc-staking-589b18e844dc48538c7340353186d939">on-chain protocols </a>integration and operations, giving easy access to on-chain earning to users without complex setups. 
Furthermore, the system will let crypto users on Binance redeem the subscription anytime. So, traders get shorter redemption time than staking directly on-chain. 
<h2 id="how-will-it-work">How will it work?</h2> 
Statistics show that the DeFi sector is taking the crypto world by storm with a $140 billion worth but most crypto users are still steering away from it because of the technical hurdles. At present only $3.5 billion is held by Bitcoin protocols which is a miniscule portion of it, considering its untapped potential 
The On-Chain Yields program of Binance could counter that as it offers 1000 BTC for staking to crypto users. The traders can earn Babylon Points based on their on-chain activity. This seemingly straightforward approach has brought the DeFi opportunities to the most user-friendly centralized platform in the world. 
Usually yield-farming is dominated by crypto-savvy traders who know about bridge protocols, and gas fees and can easily navigate through networks. They know how to leverage on-chain yields which remains a technically complex process for average crypto investors. 
But the Binance system will eradicate that problem as smart contract interaction, gas fees and other technical considerations will be handled by the crypto exchange, which might draw criticism for undermining the ethos of DeFi blockchain. 
Babylon has said that its staking solutions mean crypto users can “say goodbye to the risk of bridging, wrapping, or pegging your bitcoin.” This seems unorthodox to stake a digital asset like BTC which is already part of the Proof of Work (PoW) network and not Proof-of-Stake (PoS). However, Babylon has vindicated it by showing how DeFi primitives can be built on Bitcoin infrastructure. 
Now that Binance is leveraging Babylon BTC staking for its on-chain yields program it is likely to be a massive hit amongst investors and the crypto exchange has a track record of making such things work. 
Binance has further clarified how the rewards will be calculated on its On-chain yields program as it will be based on the protocol the crypto user is interacting with. Hence, initially, the rewards will depend on Babylon BTC staking. The crypto exchange will consolidate and calculate the rewards after deducting the fees and then distribute it to the users. 
Traders will begin to accrue the rewards a day after subscription, starting at 00:00 UTC and users will be able to view the distribution on the Yields page from T+2 day. If a user stakes BTC on T-day, their rewards will accrue from T+1 day and it will be distributed the next day of accruing, that is, T+2 day. 
Crypto users are allowed to redeem assets after subscribing to the On-Chain Yields program instead of directly staking it. In that case, they will receive the assets in their “Earn Wallets” in 72 hours. 
The crypto exchange has announced that the On-Chain Yields program subscription will be available from 06:00 UTC on December 9 with 1000 BTC up for grabs on first-come first serve basis while the maximum and minimum subscription per account will be 5 BTC and 0.05 BTC respectively.

DeFi Goes Mainstream: Binance Rolls Out On-Chain Yields Program

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