A protocol with $5.85B in BTC staked TVL is updating it's tokenomics. @babylonlabs_io has boomed since launch as a way to earn yield on BTC while staying in self-custody* Let's look at what the updated design means for Bitcoin stakers 🧵

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This is useful guidance for the crypto space. It creates a safe, clear path to pull capital in from the public markets, and earn yield. 😎 But as it stands today, this "safe harbor" most likely does not fit the products that have staking in the Bitcoin ecosystem.

The other interesting rule is about slashing. The guidance says the ETP must be "indemnified from slashing," meaning a slashing event cannot affect the ETP's assets. The fund must always be made whole if the validator does something wrong. This puts a massive amount of

We might see ETP providers and custodians work together on a solution. This could look like the staking provider (the validator) doing an intermediate, automatic token conversion for the ETP, paying them in the same token they are staking. Time will tell if that's legally

This line is a potential hurdle for most of the ETPs that could exist in the Bitcoin ecosystem: 👇 "The staking rewards must be paid in the same crypto." Why? Most Bitcoin staking solutions today have you stake one token and get paid in another. For example: @babylonlabs_io:

The crucial 3: ✅ Staking rewards must be paid in the same crypto (e.g., staking ETH pays rewards in ETH). ✅ The fund must be protected from "slashing" (a penalty where you lose coins). ✅ Keep enough unstaked crypto available to meet daily redemptions.

To be protected, an ETP must follow a strict checklist. Key criteria include: ✅ Be publicly traded (like the NYSE). ✅ Hold only ONE type of crypto (e.g., just ETH) + cash. ✅ Use a 3rd-party custodian for staking (the ETF can't run its own validators). There's 3 more,

What's the objective of this guidance? To create a legal framework for how exchange-traded products can stake their digital assets safely, called "safe harbor". This is important to draw a clear line on their tax status. Historically that has been blurry on what is a business

The U.S. Treasury and the IRS just released 18 pages of guidance on how crypto ETPs (like ETFs) can interact with staking. Let's break down what it says and how it might apply to Bitcoin staking. 🧵

@ZestProtocol @build_on_bob @BotanixLabs @Starknet @babylonlabs_io You can view all the listed products and learn how they work at

@ZestProtocol @build_on_bob @BotanixLabs @Starknet @babylonlabs_io Note: YieldBasis data on their dashboard appears to be down and inconsistent as of time of posting. As a precaution, we removed it for today.

📈 TOP BITCOIN YIELD STRATEGIES TODAY 📈 November 12th, 2025 Paid in BTC: 🔸@ZestProtocol Lend: 5.04% 🔸@build_on_bob BTC+ Vault: 3.34% 🔸@BotanixLabs stBTC Vault: 3.23% Paid in ALTS: 🔸@Starknet BTC Staking: 5.01% 🔸@babylonlabs_io Staking: 0.21%

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📈 TOP BITCOIN YIELD STRATEGIES TODAY 📈 Paid in BTC: 🔸@ZestProtocol: 5.04% 🔸@BotanixLabs stBTC Vault: 3.22% 🔸 @build_on_bob BTC+ Vault: 3.01% Paid in ALTS: 🔸@YieldBasis cbBTC Vault: 29.49% 🔸@YieldBasis tBTC Vault: 26.99% 🔸 @Starknet BTC Staking: 5%

That's our ₿Y breakdown of the latest proposal from @babylonlabs_io 🔥 If you liked this thread, you can read our full report on Babylon below (be sure to subscribe to the newsletter to get the top BitcoinYield strategies in your inbox, weekly)

TLDR: For BTC only stakers, this update represents a 75% reduction in the annual emissions they are allocated. Due to the inflation rate dropping from 8% to 5.5%. And the allocation changing from 4% to 1%. To be clear. This doesn't mean your net $ yield will be reduced. That

At BitcoinYield, we currently focus on yield products with BTC as the only input and how much you can be rewarded for that collateral. Recommend reading the image attached to learn more about how staking $BABY could earn you more yield. Finally, let's look at how the new

The updated proposal makes two big changes. It reduces the annual token inflation from 8% to 5.5% And shifts the balance of who gets rewarded from a 50/50 mix of BTC and BABY stakers to the numbers below. Proposed reward allocations: - 1% to BTC stakers - 2% to BABY stakers

So what's the solution? This is where the updated tokenomics announced yesterday try to solve. To align all parties and earn more yield. - You either want to secure more networks via Babylon, think Ethereum validators rewards. - or tweak the tokenomics to have more incentive