As Bitcoin continues to solidify its place as the world’s most secure blockchain, innovative projects like Babylon are pushing the boundaries of what’s possible beyond simply holding the asset.

This week, Babylon co-founder David Tse returned to Coinage to discuss Babylon’s latest developments, including the highly anticipated launch of Bitcoin staking, which saw a flurry of activity that spiked transaction fees on the Bitcoin network as users scrambled to participate.

The milestone represents a significant leap for Bitcoin beyond its traditional use case as a store of value. Babylon’s test launch, which capped Bitcoin staking at 1000 BTC, sparked excitement and led to transaction fees spiking 100x as users vied for early participation.

“It’s the first time Bitcoin can be used for staking in a trustless way,” Tse told Coinage in a new interview. “A lot of people wanted to be part of this historical event.”

For those unfamiliar with staking, Tse highlighted its importance in securing decentralized networks. While Ethereum has popularized proof-of-stake in the blockchain world, Babylon’s vision is to extend Bitcoin's security to other chains in a trustless manner, meaning users don’t need to rely on third-party custodians to manage their assets.

By staking, users essentially lock up their crypto, in order to earn a yield on top of it. For proof-of-stake networks like Ethereum, staking has been around since 2022. But for Bitcoin, it hasn't been possible until now. Considering how much money has poured into Bitcoin since the approval of the Bitcoin ETFs, the opportunity for Babylon has only gotten juicier.

"When we started educating folks about the idea of Bitcoin staking last year, a lot of people [told] us Bitcoin holders are very conservative. They'll never do anything else on the Bitcoin [network] rather than hold it," Tse said. "But our experience and our interaction with the community in the past years, I think, have shown otherwise."

Babylon’s staking launch arrives at a critical moment for Bitcoin. As institutional interest in Bitcoin continues to grow, spurred on by Bitcoin ETFs and increasing mainstream adoption, Babylon’s approach offers Bitcoin holders a new way to earn yield on their holdings without the need for centralized intermediaries. In a world where many Bitcoin ETFs offer little more than passive exposure to price movements, Babylon is unlocking Bitcoin’s potential to participate in securing proof-of-stake networks.

“There’s no yield on Bitcoin held in ETFs,” Tse pointed out. “We’re creating a new use case for Bitcoin that generates yield in a trustless manner.”

The surge in demand for Babylon’s staking protocol, despite the relatively small cap and participation limits, suggests Bitcoiners are hungry for more ways to leverage their holdings beyond simply holding. Tse and his team kept individual staking amounts small —0.05 BTC maximum per wallet — to encourage broader participation and allow more users to experience the system. About 20,000 unique Bitcoin addresses participated, reinforcing the idea that Bitcoin holders might not be as conservative as some might think.