Successful Application of Taproot Upgrade in the Babylon Project

Recently, a Bitcoin staking project called Babylon has attracted attention in the industry. The project has drawn nearly 24,000 Bitcoins in staking, worth over $1.6 billion. Although Babylon is not a true Bitcoin layer two network, it cleverly utilizes Bitcoin's time-lock feature, allowing users to lock up their Bitcoins and earn returns in other tokens.

Although the Babylon blockchain has not officially launched, its staking system has already attracted a significant amount of funds. This may be related to the platform's backing by well-known cryptocurrency venture capital and its association with a certain trading platform. Babylon aims to become a presence in the Bitcoin ecosystem similar to EigenLayer, introducing concepts such as double staking.

The staking mechanism of Babylon demonstrates the powerful features of the Taproot upgrade. Users can stake Bitcoin by creating customized complex transactions, while during the redemption process, the multiple spending paths of Tapscript and the Taproot tree are fully utilized.

The Taproot tree of Babylon contains three main redemption scenarios:

1. Time Lock: Stakers can independently retrieve funds after 15 months.
2. Unlock on demand: Requires approval from both the staker and the Babylon Alliance.
3. Forfeiture: Involves additional "finality provider" signatures.

It is noteworthy that the current staking mechanism of Babylon is actually free from counterparty risk, as the penalty mechanism has not yet been implemented. This makes the current stage a good time to participate in staking, although the specific amount of token rewards in the future remains uncertain.

Babylon's application of Taproot strongly rebuts criticisms of Bitcoin core developers for lacking innovation. The Taproot upgrade showcases its clever design, enabling diverse custom spending conditions while enhancing privacy and scalability. Currently, nearly 100,000 bitcoins are stored in Taproot outputs, demonstrating a strong adoption trend.

Although some may question the effectiveness of proof-of-stake systems or consider the Babylon project to have characteristics of a copycat coin, it is undeniable that Taproot is being used in practice and proving its success. The practices of Babylon provide an important example for the construction and use of the Taproot script system, which may inspire more innovative applications in the future that do not rely on token rewards.

Overall, regardless of one's views on the Babylon project itself, the application of the Taproot upgrade within it fully demonstrates that this is a successful improvement of the Bitcoin protocol. Considering the various limitations faced by Bitcoin developers, the ability to achieve such an upgrade is indeed admirable.