📝How Does Babylon’s Bitcoin Staking Design Work?

Babylon's Bitcoin Staking Design employs innovative protocols to extend Bitcoin's security to the decentralized world, focusing on trustless and self-custodian staking mechanisms. The key components include Bitcoin timestamping, which sends verifiable timestamps of data to Bitcoin, and Bitcoin staking, allowing Bitcoin to be staked trustlessly in decentralized systems.

In the event of a secret key leak, the only permitted action is to send the staked Bitcoin to a predefined burn address, ensuring security through a combination of a public EOTS key and a jury system. This system requires the coordination of multiple signatures for a slashing transaction (they do not burn Bitcoin - they allow others to claim it in a double-sign) to execute, specifically the leaked secret key and a jury's private key, which pre-signs this transaction.

To address trust and security concerns, the design includes mechanisms for emulating covenants through a jury system, utilizing a multi-signature setup to mitigate the risk of malicious actions by jury members.