Dual Staking with Bitcoin
Last updated
Last updated
The Slinky Hyperloop chain is designed as a sovereign Bitcoin rollup, leveraging the security features of the Bitcoin chain through a strategic partnership with Babylon. By integrating with Babylon, validators of the Slinky Hyperloop chain are required to stake Bitcoin as a form of security deposit.
In the early stages of Proof of Stake (PoS) networks, there exists a vulnerability known as the "death spiral." This occurs when a decrease in the token's value leads to reduced network security, further diminishing the Total Value Locked (TVL), thus leading to token's devaluation. This cycle can severely compromise the network's functionality and security.
To fortify the network against such vulnerabilities, our dual staking model utilizes two forms of tokens:
Bitcoin Staking ($BTC): This uses a low-volatility, high-liquidity token from an external network (Bitcoin), providing a robust security layer due to its widespread acceptance and established value.
Slinky Native Token Staking ($SLINKY): This captures and represents the intrinsic value of the Slinky Network, ensuring that stakeholders have a vested interest in the network's success and growth.
We employ a unique approach called Hybrid Dual Staking, which integrates aspects of modular and native dual staking methods:
Modular Hybrid Staking: Requires quorums both from local operators staking $SLINKY and from those backing their stakes with staked Bitcoin secured through Babylon. This creates a robust and flexible security model.
Native Hybrid Staking: Similar to mesh security in traditional systems, this method treats both groups of staked tokens as part of a unified security mechanism. Stakes are converted into unified units based on real-time valuations from trusted oracles, ensuring fair and balanced participation from all validators.
Stake Management: For $SLINKY, stakers interact with our native staking contract to perform and record staking operations. For Bitcoin stakes via Babylon, the process aligns with Babylon’s established staking mechanisms, ensuring that all operations are synchronized and secure.
Relayer and Synchronization: An off-chain relayer monitors and synchronizes the staking status across both the Babylon system and our native operations. This includes watching for staking events and ensuring that the state of the blockchain reflects these actions accurately.
Veto Mechanism: In cases of discrepancies or malicious activity, the Babylon-backed operators can veto actions deemed harmful to the network's integrity, providing an additional layer of security and oversight.
By adopting this dual staking approach with Babylon, the Slinky Hyperloop not only avoids the pitfalls of the "death spiral" but also sets a new standard in blockchain security, leveraging the security properties of Bitcoin.
