Home>BLOCKCHAIN>Babylon Chain closes $18M funding for Bitcoin staking

Babylon Chain closes $18M funding for Bitcoin staking

Polychain Capital and Hack VC led the $18 million Collection A funding spherical of Babylon Chain, a protocol engaged on Bitcoin (BTC) staking, bridging the decentralized finance (DeFi) ecosystem with the Bitcoin blockchain. 

In line with the Dec. 7 announcement, the funds might be used to assist the event of Babylon’s Bitcoin Staking protocol, which allows proof-of-stake (PoS) networks to stake BTC, including liquidity and safety to rising 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 should stake the chain’s native token. The safety and integrity of a PoS chain rely on the quantity of tokens staked. Bitcoin, nevertheless, makes use of a unique mechanism, generally known as proof-of-work (PoW), the place miners resolve complicated mathematical issues to validate transactions.

Babylon needs each worlds to be mixed into one. The startup launched its Bitcoin staking minimal viable product (MVP) in October, claiming it could assist scale back inflation strain on PoS chains that would depend on Bitcoin to draw capital by means of staking whereas strengthening the safety of rising chains.

Bitcoin timestamping testnet with 31 chains. Supply: Babylon Chain.

According to the startup’s lite paper, its largest problem is to remotely “slash all security violations with out having a sensible contract on the Bitcoin chain.” To deal with this subject, the protocol claims to make use of accountable assertions, finality devices, Bitcoin emulation and timestamps. “Our development is modular, and can be utilized on high of all PoS consensus protocols. No delicate or onerous fork of Bitcoin is required to implement our Bitcoin staking protocol,” Babylon wrote.

Staking may pave the way in which for extra builders to construct options on the Bitcoin community, which is without doubt one of the challenges going through the unique blockchain. As the primary and main cryptocurrency on the earth, Bitcoin has a market capitalization of $847.8 billion on the time of writing. A Glassnode report found that 66% of its circulating provide has been dormant for a minimum of a yr.

“Babylon not solely unlocks the most important blockchain asset, however may also make Bitcoin-backed safety companies (akin to information availability service) attainable for the broader blockchain ecosystem,” stated Alex Pack, managing associate at HackVC.

Further traders within the spherical embody Framework Ventures, Polygon Ventures, Fortress Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital, and IOSG Ventures.

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