Babylon: Bringing Bitcoin's Security to the Blockchains in the Cosmos Ecosystem

Author: Tim Copeland, The Block

Compiled by: Cookie, ChainCatcher

Today, Babylon launched its testnet, marking the starting point for the project's grand vision—enabling blockchains in the Cosmos ecosystem to leverage the security of the Bitcoin network. Babylon expects to launch a second testnet this summer and a mainnet by the end of the year.

Babylon has garnered support from many communities. The project completed an $8 million funding round last year led by IDG and Breyer Capital. Previously undisclosed is the support from EigenLayer founder Sreeram Kannan, and Zaki Manian, co-founder of Sommelier Protocol, serves as an advisor to the project. Additionally, it seems to have caught the attention of Osmosis in the Cosmos.

Why has Babylon received such widespread support? Especially considering the project's plan to connect very different types of chains. It boils down to Babylon aiming to address one of the biggest issues in the Cosmos ecosystem: the lack of security.

Cheaper and Stronger Security

Unlike most blockchain platforms, the Cosmos ecosystem allows each application to have its own blockchain. This means that each application must have its own set of validators, rather than relying on a shared set of validators to secure multiple blockchains.

This presents a significant challenge, especially for smaller blockchains, which need to create sufficient economic incentives for validators to operate. The usual solution is to pay validators through token inflation combined with transaction fees—which can become very expensive. For example, Osmosis currently provides $47 million in rewards to stakeholders annually.

As a result, there has been extensive discussion around the topic of "enhancing one's own security by leveraging the security of other blockchains."

"Overall, security is a very hot topic in the application chain space," said David Tse, founder of Babylon and a professor at Stanford University. He noted that many projects have proposed shared security models, from mesh security by Sunny Aggarwal, co-founder of Osmosis Labs, to replicated security of the Cosmos Hub.

How to Empower the Cosmos Ecosystem

Babylon's solution brings new insights, as the project looks for solutions outside the Cosmos ecosystem. Babylon argues that the Bitcoin network has the highest level of security due to its strong hashing power.

Babylon works as an intermediary between blockchains that need extra security and the Bitcoin network. Babylon retrieves block headers from chains using its services to identify recently confirmed blocks and writes these block headers to the Bitcoin network. This means anyone can check on the Bitcoin network whether a block has been confirmed, ensuring that the transactions within that block have occurred, thus providing additional security.

Babylon does not aim to replace the existing security of blockchains but to enhance it. Since Bitcoin's block time is much slower than most (if not all) Cosmos blockchains, it will serve as a lagging security measure. However, for large transactions, waiting for a block to be confirmed through Babylon's security may still be an important use case.

The ancillary benefit for application chains using Babylon may be the reduced need to spend so much on network security. Babylon provides an additional layer of security for application chains, with verification times ranging from about 10 minutes to an hour, and the confirmation process only requires two Bitcoin transactions, making it a relatively inexpensive service.

"We really hope to have hundreds of application chains using this service. Exchanges will interact with these chains in a very secure manner. It can also be used to help ensure cross-chain security," he said, noting that the project is collaborating with the IBC project (IBC is the technology used by Cosmos blockchains for communication and asset exchange).

How does Babylon sustain itself? Babylon validators will receive the native tokens of the application chains using Babylon's services as rewards. Additionally, they will also receive Babylon tokens.