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SatLayer on Babylon

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What is Babylon

is a Proof-of-Stake (PoS) blockchain built using the Cosmos SDK, making it a part of the broader Cosmos ecosystem. Babylon Genesis will also be the first Bitcoin-secured network (BSN) in the Babylon ecosystem.

What sets Babylon apart is its security model: instead of solely relying on its own token and validators for security, Babylon has an extra guarantee secured by Finality Providers who stake native Bitcoin. This native Bitcoin remains on the Bitcoin network, but can still be slashed if a Finality Provider acts maliciously.

Babylon employs extractable one-time signatures (EOTS) to achieve such slashing. EOTS is a cryptographic technique that allows any third party to extract the private key of a Bitcoin wallet, if that wallet attested to a double-spend or fork attack. Thus, when a validator acts maliciously, the staked Bitcoin can be slashed as a penalty.

This technology enables Babylon to secure any proof-of-stake chain against forking using staked Bitcoin. The Bitcoin staked in Babylon is staked non-custodially, meaning that the entire stack is trust-minimized. This makes Babylon a powerful, yet limited, primitive for activating the potential of Bitcoin staking for security purposes. Many applications cannot utilize Babylon for their security needs. SatLayer bridges this functionality gap by building a fully programmable slashing layer on top of Babylon. Bitcoin staked in Babylon can be restaked in SatLayer and used to secure off-chain Bitcoin Validated Services (BVSs) using programmatically specified reward and punishment schemes.

Building SatLayer on Babylon

SatLayer is a set of core smart contracts, written in CosmWasm, that will be deployed onto Babylon Genesis. CosmWasm is a Turing-complete smart contract platform that allows for highly customizable smart contracts. This flexibility allows SatLayer to implement advanced security features, including tailored slashing mechanisms to penalize specific types of malicious behaviors on the network.

These custom slashing mechanisms are crucial for applications such as oracles, data availability platforms, bridges, and decentralized exchanges, as their security requirements extend beyond basic equivocation attacks like fork attacks or double spends. As a result, we cannot use extractable one-time signatures alone to secure these types of applications, instead we must use Turing-complete smart contracts.

Babylon Genesis
How Babylon secures native Bitcoin on its chain
How SatLayer fits into the Babylon ecosystem