The Babylon community proposed to drop the inflation rate of the BABY Token by about 30% and introduce a BTC-BABY joint stake function.

PANews reported on September 29 that the community of the Bitcoin staking protocol Babylon recently released a new proposal to “drop inflation and introduce joint staking,” aiming to adjust the BABY tokenomics, including reducing inflation and introducing BTC-BABY joint staking. The proposal suggests reducing the inflation rate by about 30%, from 8% per year to 5.5% per year, with the following specific allocations: ① 1% allocated to Bitcoin (BTC) stakers, and finality providers may collect a Commission; ② 2% allocated to BABY stakers, and CometBFT validators can collect a Commission. ③ An additional 2.35% allocated to BTC stakers who stake both BTC and BABY as a joint staking reward, with every 20,000 BABY staked making 1 staked BTC eligible for the joint staking reward. ④ Due to limitations of the Cosmos SDK, finality providers and CometBFT validators cannot collect a Commission from the joint staking rewards; to compensate for this limitation, 0.075% is allocated to active finality providers based on the delegation size, and 0.075% is allocated to active CometBFT validators based on the delegation size. Once a trustless Bitcoin custody protocol is ready, the tokenomics should be re-examined and adjusted to promote the adoption of the protocol. In addition, the proposal suggests introducing BTC-BABY joint staking functionality to encourage BTC stakers to also stake BABY and actively provide security for validation and finality; the more BABY staked, the more joint staking rewards earned.