Babylon Chain Raises $18 Million to Advance Bitcoin Staking and Bridge DeFi Gap
Summary:
Babylon Chain, a protocol specializing in Bitcoin (BTC) staking, has raised $18 million in a Series A funding round led by Polychain Capital and Hack VC. The funds will aid the development of Babylon's Bitcoin Staking protocol to enable PoS networks stake BTC, enhancing the liquidity and security of emerging chains. The startup aims to integrate Bitcoin's proof-of-work method with PoS chains, a move that could attract staking capital, strengthen security and lead to more developers building on the Bitcoin network.
Babylon Chain, a protocol focusing on Bitcoin (BTC) staking and connecting the decentralized finance (DeFi) community with the Bitcoin blockchain, has secured an investment of $18 million in a Series A funding round led by Polychain Capital and Hack VC. The announcement, made on December 7th, revealed that the invested funds will be used to promote the creation of Babylon's Bitcoin staking protocol. This facilitates proof-of-stake (PoS) networks to stake BTC, boosting liquidity and fortifying emerging chains.
In simpler terms, a PoS chain is a blockchain form that relies on its members to validate transactions. For being a validator and generating new blocks, a member must stake the chain's indigenous token. The reliability and honesty of a PoS chain rests on the quantity of tokens staked. Unlike this, Bitcoin utilizes a proof-of-work (PoW) method, where miners solve intricate math problems to validate transactions. Babylon aims to bring these two methods together.
Their Bitcoin staking minimum viable product (MVP) introduced in October proposes to relieve potential inflation pressure on PoS chains by using Bitcoin to attract staking capital, in turn fortifying the security of emerging chains.
As per the startup's concise document, their key hurdle is to remotely eliminate all safety infringements without the need for a smart contract on the Bitcoin chain. To resolve this, the protocol reportedly employs accountable assertions, finality gadgets, Bitcoin emulation, and timestamps, creating a flexible architecture that's compatible with all PoS consensus protocols. The implementation of Babylon's staking protocol doesn't require any soft or hard fork of Bitcoin.
Staking could encourage more developers to create solutions on the Bitcoin network, a challenge the original blockchain faces. As the first and predominant cryptocurrency, Bitcoin's market capitalization is $847.8 billion at press time. A report by Glassnode revealed that 66% of its circulating supply has remained dormant for at least a year.
"Babylon doesn't just unlock the largest blockchain asset, but also enables the provision of Bitcoin-backed security services, like data availability services, to the wider blockchain ecosystem," stated Alex Pack, Hack VC's managing partner. Participating investors also include Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital, and IOSG Ventures.
Published At
12/7/2023 11:06:52 PM
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