Bitcoin staking through Babylon does not earn you Bitcoin, but units of the protocol token BABY. Knowing that before delegating leads to a different decision than expecting a yield on a Bitcoin holding. The protocol currently holds 40,573 Bitcoin, worth roughly $3.34 billion according to DefiLlama's data. A year earlier the figure was $7.14 billion. Bitcoin itself trades at $81,394, or €72,636, on Wednesday evening, a good two percent below the previous day.
This article explains what technically happens in Bitcoin staking, what the yield depends on, which deadlines tie up your holding and how German tax law treats the rewards. Price targets for BABY are not part of it.
Bitcoin staking pays no interest in Bitcoin
Bitcoin staking means locking up Bitcoin as collateral for an external network, which pays a reward in its own token in return. The Bitcoin themselves do not multiply. The Bitcoin protocol has no mechanism that allocates anything to holders for holding; new Bitcoin arise exclusively through mining.
That makes the process fundamentally different from a savings account, even though the terms sound similar. You pos...
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