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.
babylon letting you stake BTC without bridges or wrapping is the trustless primitive we needed. 12700 stakers in days proves demand
lina G is right. 12700 stakers in days with a 1000 BTC cap. demand for trustless BTC staking without bridges is massive. the unbonding mechanism is well designed
babylon letting you stake BTC without bridging is the actual innovation here. every other BTCFi solution is just wrapped IOU nonsense
makerDAO rebranding to Sky with USDS and SKY tokens feels like a solution looking for a problem
only $15M lost to hacks in august across 5 incidents. either security is improving or hackers are on vacation
Boris N. $15M in losses across 5 incidents is genuinely good. compare that to 2022 when we had $3B+ stolen. security is improving incrementally
luna_ghost $15M across 5 incidents is actually impressive compared to 2022 numbers. security is getting better even if slowly
hash_rate_ calling it. rebranding makerDAO to sky with USDS and SKY tokens feels like unnecessary complexity. DAI and MKR worked fine
sky_rebrand_ DAI worked fine is the same argument people made about myspace before facebook. rebrands fail often but standing still fails too
sky_skeptic comparing the DAI rebrand to myspace to facebook is wild. USDS and SKY are the same team that built DAI. its more like Google renaming to Alphabet
15M lost to hacks in august is genuinely impressive compared to the billions from 2022. maybe auditors are finally doing their job
Dmitri O. 15M in august vs 3B in 2022. auditors doing their job is nice but the real drop came from multi sig becoming standard on treasury management. one tech upgrade did more than 5 years of regulation
babylon phase 1 capped at 1000 BTC and got 12700 stakers instantly. imagine the demand when they raise or remove the cap
btc_native_ the unbonding mechanism is what makes this legit. 7 day unbonding with slashable finality providers. actual crypto economic security not just vibes
btc_native_ 1000 BTC cap was smart. test demand without blowing up the unbonding queue. phase 2 will probably go 10x
renzo_chad_ 1000 BTC cap was marketing not caution. Babylon wanted to say 12700 stakers in their pitch deck. phase 2 removes the cap and the number becomes meaningless
btc_yield_rat_ 1000 BTC cap as marketing is cynical but accurate. phase 2 will probably get 50k BTC in a week and the narrative shifts to TVL charts overnight
btc_yield_rat_ 12700 stakers for 1000 BTC means average stake was 0.078 BTC. this was retail testing the waters not whales. phase 2 numbers will tell a completely different story
DAI worked for 5 years without issue so naturally they rebranded to Sky and split it into USDS and SKY. solutions in search of problems
Hannele J. agree on babylon but the makerdao rebrand to sky is solution looking for a problem. usds and susds splitting liquidity for no reason
12,700 stakers for 1,000 BTC cap shows insane demand for trustless BTC staking. no bridges no wrappers just native yield
babylon doing 1000 BTC cap with 12700 stakers and makerDAO rebranding to Sky the same month. one is building new infrastructure, the other is changing nameplates
MakerDAO rebranding to Sky with USDS and SKY tokens. DAI worked perfectly fine for years. rebrands always feel like a solution looking for a problem
Tomoko Y. DAI worked fine is doing a lot of heavy lifting. DAI was heavily concentrated in USDC collateral by 2024. the rebrand was partly about diversifying the backing
makerDAO splitting into USDS and SKY tokens fractured the liquidity of the most battle tested stablecoin in defi. DAI worked because it was simple. now you need a flowchart to understand the tokenomics