The Babylon community has proposed a significant adjustment to the BABY tokenomics, aiming to reduce the token's inflation rate by approximately 30% and introduce a BTC-BABY co-staking function. The proposal suggests decreasing the annual inflation rate from 8% to 5.5%, with specific allocations: 1% to Bitcoin stakers, 2% to BABY stakers, and 2.35% to BTC stakers participating in joint staking. Additionally, 0.075% each is allocated to active finality providers and CometBFT validators due to Cosmos SDK limitations. The proposal also introduces a BTC-BABY co-staking feature, incentivizing BTC stakers to also stake BABY, thereby enhancing security for validation and finality. The rewards for co-staking increase with the amount of BABY staked. The community plans to revisit the tokenomics once the trustless Bitcoin custody protocol is operational to further drive adoption.