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Nomic DAO unveils liquid staking for BTC while Thesis announces the Bitcoin \u201cEconomic Layer.\u201d<\/p>\n
After years of scant development on top of the Bitcoin network, activity on the oldest cryptocurrency is exploding, offering users the option to finally put their BTC to work.<\/p>\n
One of the latest examples is Nomic DAO Foundation and Babylon Bitcoin, which together are introducing stBTC<\/a>, a Bitcoin Liquid Staking Token (LST).<\/p>\n Liquid staking refers to users receiving a tradable token in exchange for staking a cryptocurrency in a proof-of-stake blockchain. Unlike traditional staking, which locks up tokens until they\u2019re unstaked, liquid staking enables users to retain access to the value of their staked tokens to then use across DeFi.<\/p>\n Users can exchange BTC for nBTC by using Nomic\u2019s BTC reserve. Through Nomic\u2019s Staking Pool, users can lock their nBTC to mint an equivalent amount of stBTC tokens, which, like nBTC, can be used throughout the Cosmos ecosystem.<\/p>\n Nomic and Babylon are able to create LSTs for Bitcoin by using the former\u2019s link to Cosmos\u2019s PoS chain.<\/p>\n \u201cNomic and Babylon provide two important primitives to Bitcoin: decentralized custody and staking,\u201d said Matt Bell, CEO of Turbofish, Nomic\u2019s founders and core contributors, in a press release shared with The Defiant. \u201cBy pairing the two, their impact is magnified, making a more practical solution for the average Bitcoin holder to earn yield through staking.\u201d<\/p>\n Nomic and Babylon\u2019s combination will be powered by the Inter Blockchain Communication Protocol (IBC), a Cosmos-native interoperability standard.<\/p>\n This marks a potential watershed moment for the Bitcoin ecosystem.<\/p>\n Launching stBTC could have a twofold effect: it could capture some of the market share that wrapped Bitcoin (wBTC) holds at $10.5 billion, currently the only instrument that Bitcoin holders can earn a yield on. This would, in turn, reduce some of Ethereum\u2019s Total Value Locked (TVL) in Decentralized Finance (DeFi).<\/p>\n Conversely, it could also onboard Bitcoiners to the Cosmos ecosystem when holders claim their staking rewards.<\/p>\n Liquid staking has become one of the most popular activities in DeFi, amassing a whopping $54 billion TVL on Ethereum<\/a>, according to DefiLlama<\/a>. Lido Finance is the top liquid staking protocol, with a more than 70% market share.<\/p>\n Nomic\u2019s integration with Babylon isn\u2019t the only Layer 2 garnering hype this week.<\/p>\n On April 9, Thesis, a venture studio funding and building on Bitcoin, unveiled<\/a> the so-called Bitcoin Economic Layer, dubbed \u201cMezo.\u201d<\/p>\n Mezo also disclosed a $21 million round led by Pantera Capital, Multicoin, Draper Associates, and Dan Held, among others.<\/p>\n The Bitcoin Economic Layer looks to leverage what they call \u201cProof of HODL,\u201d opening up the option for Bitcoiners to earn yield on the previously stagnant BTC. PoH operates by multiplying a user’s HODL score according to their length of deposits.<\/p>\n Mezo\u2019s main difference, according to a press release<\/a>, from other Layer 2s is that it will foster a Bitcoin circular economy through a Thesis-built tBTC token, which will offer trust-minimized bridging to other protocols.<\/p>\n Bitcoin\u2019s Layer 2 landscape is flourishing, with Merlin Chain and Stacks leading the pack.<\/p>\nThe Bitcoin \u201cEconomic Layer\u201d<\/h2>\n