Binance enters Bitcoin DeFi sector with Babylon Labs BTC staking offering

Binance Earn has added on-chain passive income, starting with Bitcoin staking in Babylon Labs. The non-custodial staking is unique in the crypto space as it will tap valuable BTC for long-term holding and yield.

Binance Earn’s staking and passive income service will integrate on-chain income from Babylon Labs. The integration is the first stage of On-Chain Yield for Binance Earn, which may expand to additional products and chains.

The new on-chain reward mechanism will be listed under Binance’s High Yield tab and will come with a warning.

The difference for end users is that they will be able to use their Binance account directly to participate in multiple protocols offering on-chain yields. Binance Earn will save them from holding multiple wallets and staking accounts.

However, in some cases, the Binance account wallet will not support a particular airdrop. In that case, a user still needs to share a self-custodial wallet address to receive the specific rewards.

The earning service will open on December 9 with a 1,000 BTC cap. Each user will be limited to a stake between 0.5 BTC and 5 BTC. Binance will also release more details for on-chain yield from next week.

On-chain yield will tap multiple projects requiring direct participation. However, users will only access their Binance accounts and may be able to earn points, tokens, or other rewards. Binance may also offer an immediate schedule for redeeming the earnings.

In the case of Babylon Labs, BTC staking is done in exchange for points. The points themselves have no market value at the moment and are accumulated in anticipation of a future airdrop.

Binance Earn warns that its on-chain yield products are riskier than usual and do not guarantee a positive market value. Binance Earn has not set out the details of handling point allocations or airdrops.

Babylon Labs prepares for its Cap-3 event

Outside of Binance Earn, Babylon Labs is preparing for its third staking event, Cap-3. The event will arrive a few days after BTC broke the $100K mark for the first time, driving additional enthusiasm for the leading crypto coin.

Holders of BTC wallets can join the lockup session, directly locking a predetermined amount of coins. The coins never leave the wallet, but they cannot be unstaked without incurring additional fees.

Babylon Labs has already run two lockup sessions for a timed duration and with a 500 BTC limit for whales. The initial sessions were short, lasting just 10 BTC blocks.

Cap-3 will be open for 1,000 BTC blocks, which is roughly one week. The session will have a minimum of 0.005 BTC and an increased maximum of 5,000 BTC. Unbounding BTC that is locked before or after the cap event will have a fee of 0.00032 BTC. Releasing coins will also incur the same fee.

The event will start awarding points based on the BTC locked in each block. For the first 300 blocks, Babylon Labs will award 100,000 points per block. For the remaining 700 blocks, the allocation will be 21,000 points. The point allocations may not be eligible for an airdrop for jurisdictions outside the USA.

The Binance Earn Babylon staking will open a day before the actual on-chain event. Babylon Labs will start its session on December 10, at 11 AM UTC, with enough time for Binance to join on behalf of its depositors.

Babylon Labs boosts BTC DeFi Sector

Babylon Labs has goals of creating a DeFi ecosystem on Bitcoin using derivative tokens that tap the growing value without selling the coins.

The Bitcoin DeFi summer did not materialize, as most BTC staking products were still niche. However, Babylon Labs is fast becoming the most widely adopted tool for tapping BTC value.

The total value locked in BTC-based products reached a peak at $3.79B. Of that value, Babylon Labs carries $2.38B based on its two previous lockup rounds.

Babylon Labs is among the first to offer direct on-chain, non-custodial staking, immediately surpassing the value of Ethereum-based protocols using wrapped BTC. The project aims to continue creating liquidity and building its own DeFi ecosystem.

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