Bitcoin staking protocol Babylon raises $18 million in Series A funding

Babylon, a Bitcoin staking protocol in development, has raised $18 million in a Series A funding round co-led by Polychain Capital and Hack VC.

Other investors in this round include Framework Ventures; polygon Matic

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Ventures, Castle Island Ventures, OKX Ventures and Symbolic Capital, among others, told Babylon on Thursday. “The project started raising funding in late July,” David Tse, co-founder of Babylon and an engineering professor at Stanford University, told The Block. “It just closed.”

It was an equity and token warrant round with the same structure as Babylon’s $8 million seed funding round disclosed in March, Tse said. He declined to comment on Babylon’s valuation for the round.

What is Babylon?

The Babylon Protocol allows Bitcoin holders to stake their coins on a proof-of-stake blockchain and earn returns. This protocol essentially allows PoS chains to introduce Bitcoin as a staking asset on the network. Babylon aims to use: bitcoin BTC

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This is security to strengthen the security of the PoS chain.

The PoS chain is currently secured by the capital of the native token. However, such capital can be costly, especially for emerging chains, as paying high staking yields to attract such capital requires high inflation rates. that much Cosmos Herb atom

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For example, recently in the community Approved a proposal to lower the maximum inflation rate for native token Atom from approximately 14% to 10%. The approved changes will increase Atom’s annual staking yield from approximately 19% to approximately 13.4%.

Babylon is already in talks with Cosmos Hub to support the Polygon network, Tse said. “Babylon is contributing to the Polygon CDK (chain development kit) and the Polygon ecosystem more broadly,” Polygon co-founder Sandeep Nailwal said in a statement. “Babylon’s integration of its solution into Polygon’s staking hub not only enhances the security of emerging chains, but also addresses the inflationary pressures inherent in existing staking models.”

Babylon Released

Tse said he expects the Babylon Protocol to launch “around the next Bitcoin halving.” The halving is expected to occur in April 2024. Once launched, the Babylon Chain protocol will “act as a control panel” between Bitcoin and PoS chains, Tse said.

Tse added that with the new capital in hand, Babylon plans to expand its current team of about 15 people and grow its ecosystem.

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