Polychain Capital and Hack VC lead $18 million Series A funding round for Babylon Chain
Babylon Chain, a protocol working on Bitcoin staking, has closed an $18 million Series A funding round led by Polychain Capital and Hack VC. The funding will be used to support the development of Babylon's Bitcoin Staking protocol, which aims to bridge the decentralized finance (DeFi) ecosystem with the Bitcoin blockchain.
What is Bitcoin Staking?
Babylon's Bitcoin Staking protocol enables proof-of-stake (PoS) networks to stake BTC, adding liquidity and security to emerging chains. In a PoS chain, participants validate transactions by staking the chain's native token. The security and integrity of a PoS chain depend on the amount of tokens staked. Bitcoin, on the other hand, uses a different mechanism called proof-of-work (PoW), where miners solve complex mathematical problems to validate transactions. Babylon aims to combine the best of both worlds by introducing Bitcoin staking to PoS chains.
Babylon's Solution
Babylon introduced its Bitcoin staking minimum viable product (MVP) in October, with the goal of reducing inflation pressure on PoS chains. The startup believes that by allowing PoS chains to rely on Bitcoin for capital through staking, while also strengthening the security of emerging chains, it can pave the way for more developers to build solutions on the Bitcoin network. Babylon's protocol uses accountable assertions, finality gadgets, Bitcoin emulation, and timestamps to address the challenge of ensuring safety violations are slashed without requiring a smart contract on the Bitcoin chain.
Unlocking the Potential of Bitcoin
With a market capitalization of $847.8 billion, Bitcoin is the largest blockchain asset in the world. However, 66% of its circulating supply has been dormant for at least a year, according to a Glassnode report. Babylon's Bitcoin Staking protocol not only unlocks the value of Bitcoin but also makes Bitcoin-backed security services possible for the broader blockchain ecosystem. This could potentially attract more developers to build solutions on the Bitcoin network and address one of the challenges facing the original blockchain.
Investors Backing Babylon Chain
In addition to Polychain Capital and Hack VC, other investors in the funding round include Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital, and IOSG Ventures. The support from these investors highlights the potential of Babylon's Bitcoin Staking protocol and its impact on the blockchain industry.
