Bitcoin Staking Protocol Babylon Raises $18 Million to Speed ​​Up Development

Bitcoin (BTC) served as a stepping stone toward the creation of decentralized finance (DeFi). However, the space was later shaped in such a way that the first cryptocurrencies were left behind by DeFi. A protocol called Babylon is trying to change the narrative and bring Bitcoin into the mainstream decentralized finance space. Recently, the Bitcoin ​​staking protocol closed an investment round, attracting $18 million worth of investment.

Babylon announced that the company closed its Series A funding round led by PolyChain Capital and Hack VC on December 7 after raising $18 million. Additionally, Framework Ventures, Polygon, Symbolic Capital, OKX Ventures and several other venture capital firms participated in the funding round.

The company did not disclose its valuation following its latest round of funding, but did explain where it plans to allocate the funds. Babylon’s Bitcoin staking protocol is still in the development stage, so the funds will be used to power progress. The staking protocol allows blockchain networks to run on a proof-of-stake (PoS) consensus network to stake Bitcoin. Emerging blockchains will benefit from these protocols by adding liquidity and security.

PoS chains, which rely on participant verification, differ from Bitcoin’s proof-of-work (PoW) mechanism. To validate transactions and create new blocks in PoS, participants must stake the chain’s native coin and determine security based on the staked amount. Babylon Protocol aims to revolutionize this landscape by introducing a Bitcoin ​​Staking Minimum Viable Product to alleviate the capital challenges faced by emerging PoS chains.

Traditional PoS chains rely on capital from native tokens, which is a costly endeavor, especially for emerging chains struggling with high inflation rates to attract capital through staking yields. An illustrative example is the recent decision by the Cosmos Hub community to reduce the maximum inflation rate of its token, Atom, from 14% to 10%, impacting staking returns.

However, the Babylon Protocol seeks harmony between the two worlds. The startup’s Bitcoin staking MVP, launched in October, aims to alleviate inflationary pressures on PoS chains. By allowing PoS chains to utilize Bitcoin for capital injection through staking, Babylon Protocol plans to enhance the security of emerging chains.

The proposed protocol is expected to be launched around the time of the next Bitcoin halving, expected in April 2024. Babylon co-founder David Tse envisioned the Babylon Chain protocol as a “control plane” connecting Bitcoin and PoS chains, ushering in a new era of blockchain collaboration and cooperation. security.

With recent capital injections, Babylon Protocol is ready to scale. The team currently consists of approximately 15 members and the newly discovered resources will facilitate team growth and ecosystem development.

As the Babylon Protocol prepares to reshape the dynamics of blockchain security, the integration of Bitcoin and PoS chains promises to redefine the landscape, provide enhanced security measures, and foster collaboration across different blockchain architectures.

Steve Anderson is an Australian cryptocurrency enthusiast. He has been an expert in management and trading for over 5 years. Steve has worked as a cryptocurrency trader, and he loves learning about decentralization and understanding the true potential of blockchain.