Polychain Capital and Hack VC led the $18 million Series A funding round for Babylon Chain, a protocol that works with bitcoin (btc) staking, uniting the decentralized finance (DeFi) ecosystem with the bitcoin blockchain .
According to the December 7 announcement, the funds will be bitcoin-Staking-Protocol-Babylon” target=”_blank” rel=”noopener nofollow”>used to support the development of Babylon's bitcoin Stake protocol, which enables proof-of-stake (PoS) networks to stake btc, adding liquidity and security to emerging chains.
For context, a PoS chain is a type of blockchain that relies on participants to validate transactions. To be a validator and create new blocks, a participant must stake the chain's native token. The security and integrity of a PoS chain depends on the number of tokens staked. bitcoin, however, uses a different mechanism, known as proof of work (PoW), where miners solve complex mathematical problems to validate transactions.
Babylon wants both worlds to combine into one. The startup unveiled its bitcoin staking minimum viable product (MVP) in October, claiming it would help reduce inflationary pressure on PoS chains that could rely on bitcoin to attract capital through staking while also strengthening the security of the transactions. emerging chains.
According According to the startup's light article, its biggest challenge is to “remotely reduce all security breaches without having a smart contract on the bitcoin chain.” To address this issue, the protocol claims to use responsible assertions, finality devices, bitcoin emulation, and timestamps. “Our build is modular and can be used on top of all PoS consensus protocols. No bitcoin soft or hard fork is needed to implement our bitcoin staking protocol,” Babylon wrote.
Staking could pave the way for more developers to create solutions on the bitcoin network, which is one of the challenges facing the original blockchain. As the world's first and leading cryptocurrency, bitcoin has a market capitalization of $847.8 billion at the time of writing. A report from Glassnodebtc-core-on-chain” target=”_blank” rel=”noopener nofollow”> found that 66% of its circulating supply has been idle for at least a year.
“Babylon not only unlocks the largest blockchain asset, but can also enable bitcoin-backed security services (such as data availability service) for the broader blockchain ecosystem,” said Alex Pack, Managing Partner at HackVC.
Additional investors in the round include Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital and IOSG Ventures.
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