Bitcoin is the most secure blockchain in the world, supported by the immense
hash power of its Proof-of-Work miners. Proof-of-Stake chains are
energy-efficient, have fast finality but face several security issues:
susceptibility to non-slashable long-range safety attacks, low liveness
resilience and difficulty to bootstrap from low token valuation. We show that
these security issues are inherent in any PoS chain without an external trusted
source, and propose a new protocol, Babylon, where an off-the-shelf PoS
protocol checkpoints onto Bitcoin to resolve these issues. An impossibility
result justifies the optimality of Babylon. A use case of Babylon is to reduce
the stake withdrawal delay: our experimental results show that this delay can
be reduced from weeks in existing PoS chains to less than 5 hours using
Babylon, at a transaction cost of less than 10K USD per annum for posting the
checkpoints onto Bitcoin.Comment: Forthcoming in IEEE Symposium on Security and Privacy 202