Babylon, a crypto startup co-founded by David Tse, an engineering professor at Stanford University, secured $70 million in its latest funding round, according to a Bloomberg report. The company reportedly aims to bridge the gap between Bitcoin (BTC) and Ethereum (ETH), the two leading cryptocurrencies.
Bitcoin as a staking asset
According to report, the funding round was led by crypto venture capital firm Paradigm, with participation from Polychain and Bullish Capital. The funds will be used to expand the Babylon team, support research and development efforts, and continue their mission of making BTC a “staking asset” to secure other blockchains.
Babylon’s recent funding round highlights a return of venture capital interest towards Bitcoin-focused projects. Traditionally, Ethereum and other blockchains have been favored due to their ease of running decentralized financial applications.
However, the success of non-fungible tokens (NFTs) on the Bitcoin blockchain, coupled with the approval and launch of Bitcoin exchange traded funds (ETF) in the United States, has reignited enthusiasm for building within the Bitcoin ecosystem.
Professor David Tse explains that BTC is experiencing a “renaissance”, with the emergence of a new wave of projects on the network. While Bitcoin was the first blockchain, the developer community had gradually turned its attention to newer channels over the years.
Nevertheless, recent developments and several factors have prompted a refocusing of attention on BTC. The approval of Bitcoin ETFs and the Bitcoin “Halving” event in April, which reduced mining rewards, contributed to the change in sentiment.
Unlocking the return potential of BTC
The main goal of Babylon is to allow Bitcoin holders to participate in the validation of transactions on proof of participation (PoS), earning returns on their idle Bitcoin assets.
Staking, a mechanism used in Ethereum and other proof-of-stake blockchains, involves locking cryptocurrency deposits to validate transactions and secure the network.
By enabling BTC as a staking asset, Babylon aims to provide a similar opportunity to Bitcoin holders, who have long wished to generate yield of their assets.
Babylon’s approach aligns with the importance of security in the Web3 ecosystem. By leveraging BTC’s market capitalization, the startup believes it can guarantee the security layer of the entire Web3 ecosystem.
Notably, Staking has become a lucrative sector within the digital assets industry, with projects like Lido Finance (LDO) and EigenLayer (EIGEN) attracting billions of dollars in crypto deposits to generate returns.
Ultimately, Babylon seeks to contribute to the growth of staking and strengthen the decentralized world being built in the crypto space.
At the time of writing, BTC is currently trading at $68,550, up 2% in the last 24 hours, as it continues to consolidate in a bid to surpass the key 70,000 mark. $.
Featured image from Shutterstock, chart from TradingView.com
