Three stories dominate the DeFi landscape as September kicks off: Babylon’s Bitcoin staking protocol opens its doors on mainnet, MakerDAO completes its transformation into Sky with new tokens on the horizon, and Immunefi’s latest report reveals crypto losses in August hit their lowest point in months.
TL;DR
- Babylon launches Bitcoin staking Phase 1 on mainnet with a 1,000 BTC initial cap, drawing over 12,700 stakers in days.
- MakerDAO officially rebrands to Sky, introducing USDS stablecoin and SKY governance token — both launching September 18.
- Immunefi reports only $15.08 million lost to hacks across five incidents in August 2024, a sharp decline from earlier months.
- Bitcoin holders gain a new trustless staking primitive without bridging or wrapping.
- DAI and MKR remain in circulation unchanged, with voluntary token swaps available.
Babylon Unlocks Native Bitcoin Staking
Babylon Labs launched Phase 1 of its Bitcoin staking protocol on August 22, bringing a long-anticipated primitive to life: native BTC staking without bridges, wrappers, or trusted intermediaries. The protocol allows Bitcoin holders to lock their BTC directly on the Bitcoin blockchain using a self-custodial staking script, delegating voting power to finality providers that will eventually secure Proof-of-Stake networks.
Phase 1 comes with a conservative 1,000 BTC total staking cap, which fills on a first-come, first-served basis. Each stake locks for a maximum of 64,000 Bitcoin blocks — roughly 15 months — though stakers can unbond on demand with a 7-day unbonding period. Crucially, no slashing mechanism exists in Phase 1, meaning stakers face no risk of losing their Bitcoin during this initial phase.
Response from the community is immediate and enthusiastic. According to Babylon’s dashboard, over 12,720 stakers and 20,610 staking delegations pour in shortly after launch, signaling strong demand for Bitcoin’s third native use case beyond store of value and medium of exchange.
The protocol’s design is deliberately phased. Phase 2 will launch a Babylon PoS chain to receive crypto-economic security from the locked Bitcoin, while Phase 3 will evolve into a full marketplace enabling multi-staking across multiple PoS systems simultaneously.
MakerDAO Transforms Into Sky
On August 27, MakerDAO — one of DeFi’s oldest and most consequential protocols — officially rebrands to Sky. The move is the most visible milestone yet in founder Rune Christensen’s multi-year “Endgame” overhaul, aimed at scaling decentralized finance to compete with centralized giants like Tether.
The rebrand comes with two new tokens. The USDS stablecoin replaces DAI at a 1:1 exchange rate, while the SKY governance token replaces MKR at a rate of 28,000 SKY per MKR. Both new tokens become available on September 18 through the new Sky.money application. Critically, DAI and MKR remain in circulation unchanged — users can voluntarily choose to swap or hold their existing tokens.
“The fundamental factor was how to grow DeFi to gigantic scale, something as big as Tether or even bigger,” Christensen tells CoinDesk in an interview. Tether’s USDT commands a $116 billion market cap, a figure Sky ultimately targets.
The Endgame plan also includes breaking the protocol into smaller independent entities called “Stars,” each with its own token. Spark, the lending platform built on top of Maker, is set to be the first. However, Christensen notes the full transformation will take a few months to roll out after the initial launch is tested and stabilized.
Market reaction to the announcement is positive: MKR gains over 4% immediately following the news, outperforming Bitcoin and the broader CoinDesk 20 index.
August Crypto Losses Drop to $15M
Immunefi’s monthly report for August 2024 paints an unusually quiet picture for crypto security incidents. Only $15.08 million is lost across five specific incidents — all classified as hacks with zero fraud cases. The figure represents a dramatic decline from the losses seen in earlier months of the year, particularly the second quarter when over $572 million was lost across 72 incidents.
The low total underscores a temporary lull in major exploits, though Immunefi cautions that the threat landscape remains active. North Korean hacking groups like Lazarus continue to pose significant risks, and the broader trend for 2024 still shows substantial losses when measured year-to-date. Major incidents earlier in the year — including the DMM Bitcoin and WazirX exploits — account for roughly $540 million, or 38% of all 2024 losses.
DeFi protocols bear the brunt of August’s incidents, continuing a pattern that has persisted throughout the year. The five cases highlight persistent vulnerabilities in smart contract code and protocol design, even as the overall monthly tally remains relatively contained.
Why This Matters
These three developments signal a maturing DeFi ecosystem moving in parallel directions. Babylon’s launch represents a fundamental expansion of Bitcoin’s utility — for the first time, BTC holders can earn yield through native staking without trusting a third party. If Phase 2 and Phase 3 deliver on their promises, Bitcoin’s $1 trillion market cap becomes an untapped reservoir of security for the entire PoS ecosystem.
Sky’s rebrand is equally consequential. MakerDAO built the blueprint for decentralized stablecoins, and its transformation into Sky reflects both ambition and urgency. Whether the Endgame plan succeeds in scaling USDS to compete with USDT remains an open question, but the willingness to reinvent — including the controversial token migration — shows the protocol is not standing still.
Finally, the drop in August losses to $15 million offers a brief moment of optimism for DeFi security. But with five incidents still occurring and year-to-date losses well into the hundreds of millions, the industry’s security challenges are far from solved. Each new protocol launch — Babylon included — introduces fresh attack surfaces that will test the ecosystem’s defenses.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always conduct your own research before making investment decisions. Crypto markets are highly volatile and you may lose your entire investment.
1000 BTC cap filled in what, days? over 12k stakers competing for that is wild. the demand is clearly there but the cap feels artificially tight to create FOMO
The no-slashing in Phase 1 is smart for bootstrapping but makes me wonder what happens when they turn it on. easy to be bullish on staking when there is zero downside risk
^ exactly. the real test is Phase 2 when slashing kicks in and stakers actually have skin in the game. 64000 blocks is roughly 15 months locked up too, that is not nothing
MakerDAO becoming Sky with USDS and SKY tokens feels like a solution looking for a problem. DAI worked fine for years. voluntary swaps tho, at least they are not forcing anyone
only 15M lost to hacks in august across 5 incidents is genuinely impressive. either security is improving or attackers are biding their time