Bitcoin Staking

TL;DR

The paper introduces Bitcoin staking, a trustless protocol enabling Bitcoin holders to secure PoS chains with their idle bitcoins, featuring automatic slashing and modular design, deployed on Babylon mainnet with significant staked value.

Contribution

It presents a novel Bitcoin staking protocol that allows trustless security sharing with PoS chains, including automatic slashing and modular integration, deployed successfully on mainnet.

Findings

Over 58,000 bitcoins staked on Babylon mainnet

Security cost is 2 orders of magnitude cheaper than native PoS security

Protocol enables trustless, automatic slashing upon safety violations

Abstract

The idea of security sharing goes back to Nakamoto's introduction of merge mining, a technique that enables Bitcoin miners to reuse their hash power to bootstrap and secure other Proof-of-Work (PoW) blockchains. However, with the rise of Proof-of-Stake (PoS) chains, there is a need for new methods of Bitcoin security sharing. We introduce Bitcoin staking, a protocol that allows Bitcoin holders to trustlessly use their idle asset to secure a PoS chain. The key challenge is to enable automatic slashing of bitcoins on the Bitcoin chain upon safety violations on the PoS chain. We achieve this using double-authentication-preventing signatures, finality gadgets and bi-directional timestamping between Bitcoin and the PoS chain. Our design is entirely modular and can be integrated with any PoS chain. A version of this protocol was deployed to secure the Babylon mainnet in April 2025 and currently has over 58,000 bitcoins staked (about 4 billion USD at current prices) while paying only 0.05% APR reward to the stakers. This is 2 orders of magnitude cheaper security cost than in PoS chains secured by their native token.