- 1 Bitcoin (BTC) acted as a stepping stone towards the creation of decentralized finance (DeFi).
- 2 Babylon announced that the firm closed the Series A funding round led by PolyChain Capital and Hack VC on December 7 after raising $18 Million.
- 3 Babylon Protocol aims to revolutionize this landscape by introducing a Bitcoin-staking minimum viable product.
Bitcoin (BTC) acted as a stepping stone towards the creation of decentralized finance (DeFi). However, the space later formed in such a way that the very first cryptocurrency was left behind by DeFi. A protocol named Babylon intends to change the narrative and bring Bitcoin to the mainstream decentralized finance space. Recently, the Bitcoin staking protocol closed an investment round by raising $18 Million worth of investments.
Babylon announced that the firm closed the Series A funding round led by PolyChain Capital and Hack VC on December 7 after raising $18 Million. In addition, Framework Ventures, Polygon, Symbolic Capital, OKX Ventures, and several other venture capital firms joined in the funding round.
The firm did not disclose the valuation after recent funding but explained where it planned to allocate the funds. Since the Bitcoin Staking protocol of Babylon is still in the development phase, the funds will be used to bolster the progress. The staking protocol will enable blockchain networks to run on Proof-of-Stake (PoS) consensus networks to stake Bitcoin. The emerging blockchains will benefit from these protocols by adding liquidity and security.
PoS chains, reliant on participant validation, 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, determining security based on the staked amount. Babylon Protocol aims to revolutionize this landscape, introducing a Bitcoin-staking minimum viable product to alleviate capital challenges faced by emerging PoS chains.
Traditional PoS chains depend on capital from native tokens, a costly endeavor, particularly for emerging chains grappling with high inflation rates to entice capital through staking yields. An illustrative case is the recent decision by the Cosmos Hub community to reduce its native token Atom’s maximum inflation rate from 14% to 10%, impacting the staking yield.
Babylon Protocol, however, seeks to harmonize both worlds. The startup’s Bitcoin staking MVP, launched in October, targets alleviating inflationary pressures on PoS chains. By allowing PoS chains to leverage Bitcoin for capital infusion through staking, Babylon Protocol envisions enhancing security for emerging chains.
The proposed protocol is set to launch around the next Bitcoin halving, anticipated in April 2024. Babylon co-founder David Tse envisions the Babylon chain protocol as the “control plane” connecting Bitcoin and PoS chains, ushering in a new era of blockchain collaboration and security.
With the recent capital injection, the Babylon Protocol is poised for expansion. Currently, the team comprises around 15 members, and the newfound resources will fuel 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, providing enhanced security measures and fostering collaboration across different blockchain architectures.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.