DeFi developers are striving to replicate the remarkable growth seen in Ethereum's restaking sector within the Bitcoin ecosystem.
On May 20th, BounceBit, a "CeDeFi" Layer 1 network supported by Binance, a prominent centralized exchange, unveiled its roadmap for 2024. In this document, BounceBit outlined plans to create a "shared security client module," enabling third-party projects to leverage the liquidity deposited on the "BounceBit BTC restaking chain."
Following its mainnet launch on May 13th, BounceBit reported accumulating a Total Value Locked (TVL) exceeding $1 billion, achieved after initiating an incentivized early access phase on January 30th.
The security of the BounceBit chain relies on users staking both its native BB token and Bitcoin (BTC). The new roadmap aims to broaden this by introducing restaking, enabling third-party protocols to utilize its staking mechanism for security.
Additionally, BounceBit's roadmap entails enhancing the execution of its Ethereum Virtual Machine (EVM), boosting transaction throughput, and refining communication between its EVM and the Cosmos software development kit.
Restaking surge
EigenLayer pioneered staking on Ethereum. EigenLayer enables Ethereum stakeholders to earn additional yield by concurrently dedicating their stake to secure third-party actively verified services (AVSs) and the Ethereum network. However, restakers face additional slashing risks, which means their share will be reduced if delegated AVSs misbehave.
EigenLayer has risen to become the second-largest DeFi protocol, with more over $15.3 TVL. The protocol's growth has lately been aided by the rapid introduction of liquid restaking tokens (LRT) protocols, which lower the technical hurdles to restaking and enable extra yield production by allowing users to remain liquid.
Projects use Babylon as an interface for Bitcoin restaking
BounceBit isn't the only project attempting to introduce restaking to Bitcoin; numerous projects are using Babylon, a Cosmos-based Bitcoin staking network, to create BTC-based restaking products.
Babylon is a Cosmos-based network that allows Bitcoin holders to "stake" their BTC to secure Proof-of-Stake (PoS) networks in exchange for a return.
On May 16, Mind Network, a Layer 1 network that focuses on restaking, established a strategic agreement with Babylon. According to the agreement, users will be able to protect Mind-based sub-networks by staking Babylon-based LRTs.
On May 2, Bedrock, an LRT protocol, introduced uniBTC, a Babylon-based Bitcoin liquid restaking token. UniBTC enables BTC holders to engage in Babylon staking without locking up their funds, allowing them to maintain liquidity while safeguarding PoS chains.
May 2024, Cryptoniteuae