Users rushing to lock their BTC to a newly launched staking script dubbed Babylon appear to be causing a spike in bitcoin’s transaction fees on Thursday morning Eastern Time.
According to Mempool.space, the medium priority fee on bitcoin has risen to 669 sat/vB, or about $57, as of publication. Antpool, Foundry USA and ViaBTC mined five blocks during the fee surge over the past hour, earning a combined 53 BTC in fees, worth approximately $3.2 million.
The fee spike coincided with the mainnet launch of the Babylon staking protocol where users can lock their bitcoin to designated addresses to gain voting power on a proof-of-stake protocol and receive rewards.
“BTC holders lock their BTC using the trustless and self-custodial Bitcoin Staking script for a predetermined time (timelock) in exchange for voting power in an underlying PoS protocol. In return, Bitcoin holders will earn PoS staking rewards.”
The project launched the mainnet around 7:38 a.m. Eastern Time on Thursday with an initial cap of locking 1,000 BTC. Each bitcoin address is allowed to send in at most 0.05 BTC per transaction, which likely resulted in users competing against each other via fees.
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