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A crypto startup seeking to use Bitcoin for native staking on other blockchain networks has secured $70 million in fresh funding to fuel its ambitious goals.
Babylon, which is aiming to do something never accomplished before, secured the cash from lead investor Paradigm, a prominent crypto venture capital firm. Other contributions came from Bullish Capital and Polychain Capital.
The startup wants to use Bitcoin, the biggest cryptocurrency by market cap, as a resource for staking. Previously, the firm told Decrypt that it’s building infrastructure to use Bitcoin staking to validate nodes on networks such as Ethereum and Solana.
“This funding will accelerate our mission to make Bitcoin the security backbone of proof-of-stake systems,” Babylon founder David Tse said in a statement. “Our team is dedicated to advancing the utility of Bitcoin beyond its traditional roles and enhancing the security of the entire blockchain ecosystem.”
Currently, Bitcoin runs on a very different system to staking protocols because it uses a system called proof-of-work.
Proof-of-work requires lots of computing power—in the form of miners—to process transactions. It’s an expensive and energy intensive process.
But with proof-of-stake, anyone can participate by “locking up” their assets to power a crypto network. Staking networks include the likes of Ethereum, Solana, and Cardano.
Babylon wants those holding Bitcoin to be able to earn a yield by pledging their coins to staking networks. It’s a bold challenge, but the startup—led by a Stanford professor and a former Dolby engineer—says it has found a way. Last year, it raised $18 million from investors.
If it does achieve what it wants, those sitting on satoshis (aka the smallest denomination of Bitcoin) will soon be able to earn yield.
“Babylon will be the catalyst that redefines the utility of BTC and paves the way for a new era of Bitcoin-native applications,” said Luke Pearson, General Partner at Polychain Capital, in a release.
Edited by Andrew Hayward
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Source: https://decrypt.co/233029/bitcoin-startup-babylon-raises-70-million-btc-staking-ethereum-solana
