Polychain Capital and Hack VC lead $18 million Series A funding round of Babylon Chain, a protocol operating on Bitcoin (B T c) staking, connecting the decentralized finance (DeFi) ecosystem with the Bitcoin blockchain.
According to the December 7 announcement, the funds will be used To support the development of Babylon’s Bitcoin staking protocol, which enables Proof-of-Stake (PoS) networks to stake BTC, adding liquidity and security to the emerging chain.
For reference, a PoS chain is a type of blockchain that relies on participants To validate the transaction. To become a validator and create new blocks, a participant must stake the chain’s native tokens. The security and integrity of the POS chain depends on the amount of tokens staked. However, Bitcoin uses a different mechanism, known as proof-of-work (PoW), where miners solve complex mathematical problems to validate transactions.
Babylon wants the two worlds to become one. The startup introduced its Bitcoin staking minimum viable product (MVP) in October, claiming it would help ease inflationary pressure on PoS chains that attract capital through staking while strengthening the security of emerging chains. Can rely on Bitcoin for.
According According to the startup’s light paper, its biggest challenge is to “remediate all security breaches without smart contracts on the Bitcoin chain.” To address this issue, the protocol claims to use accountable claims, final gadgets, Bitcoin emulation, and timestamps. “Our build is modular, and can be used on top of all PoS consensus protocols. No soft or hard fork of Bitcoin is required to implement our Bitcoin staking protocol,” Babylon wrote.
Staking could pave the way for more developers to build solutions on the Bitcoin network, which is one of the challenges facing the native blockchain. As the world’s first and leading cryptocurrency, Bitcoin has a market capitalization of $847.8 billion at the time of writing. a glassnode report found 66% of its circulating supply has been inactive 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 services) for the broader blockchain ecosystem,” said Alex Pack, managing partner of HackVC.
Additional investors in the round include Framework Ventures, Polygon Ventures, Castle Island Ventures, OKEx Ventures, Finality Capital, Breyer Capital, Symbolic Capital and IOSG Ventures.
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