The Babylon community proposed to reduce the inflation rate of BABY tokens by approximately 30% and introduce a BTC-BABY co-staking function.

PANews reported on September 29th that the community of the Bitcoin staking protocol Babylon recently released a new proposal, "Reducing Inflation and Introducing Joint Staking," aimed at adjusting the BABY token economics, including reducing inflation and introducing BTC-BABY joint staking. The proposal proposes reducing the inflation rate by approximately 30%, from 8% per year to 5.5% per year, with the following specific distribution: ① 1% goes to Bitcoin (BTC) stakers, who can receive commissions from finality providers; ② 2% goes to BABY stakers, who can receive commissions from CometBFT validators. ③ An additional 2.35% goes to BTC stakers who stake both BTC and BABY as joint staking rewards. For every 20,000 BABY staked, one staked BTC is eligible for joint staking rewards. ④ Due to limitations in the Cosmos SDK, finality providers and CometBFT validators cannot collect commissions from joint staking rewards. To compensate for this limitation, 0.075% is allocated to active finality providers based on delegation size, and 0.075% is allocated to active CometBFT validators based on delegation size. Once the trustless Bitcoin custody protocol is ready, the token economics should be revisited and adjusted to drive adoption. Furthermore, the proposal proposes the introduction of a BTC-BABY co-staking feature, encouraging BTC stakers to also stake BABY and actively provide security for validation and finality. The more BABY staked, the greater the co-staking rewards received.