PALO ALTO, Calif.--(BUSINESS WIRE)--Babylon, the project that aims to build a Bitcoin-secured decentralized world, today announced the close of its $18 million funding round. The round was co-led by Polychain Capital and Hack VC, with participation from Framework Ventures, Polygon Ventures, Castle Island Ventures, OKX Ventures, Finality Capital, Breyer Capital, Symbolic Capital, IOSG Ventures and many other investors. The funds will be used to bolster the advancement of Babylon's Bitcoin Staking protocol, which converts the 21 million bitcoins into a decentralized staking asset for the Proof-of-Stake economy in a trustless way.
Proof-of-Stake (PoS) chains have historically been tethered to their native assets for security. However, as the majority of capital gravitates to established protocols, emerging chains often grapple with limited staked resources, undermining their security. In addition, to attract staking, chains typically have to implement very high inflation to pay for high staking rewards, which affects its token utility and economic health. This has resulted in a fragmented ecosystem where networks are forced to compete for a limited pool of staked capital.
Babylon is the first marketplace to offer Bitcoin, the world’s most decentralized asset, to the PoS world. Babylon’s Bitcoin Staking Protocol provides a way for PoS chains to introduce Bitcoin as a staking asset. This allows PoS chains to acquire staking capital from the largest crypto asset in the world and enjoy high crypto-economic security that could be much higher than what the native token alone can achieve. In addition, since Bitcoin has been serving as a store of value without much yield, using Bitcoin as a staking asset can greatly reduce PoS chains’ inflation pressure.
In July this year, Babylon published a litepaper outlining its pioneering concept of native trustless Bitcoin Staking. This concept allows Bitcoin holders to provide crypto-economic security to Proof-of-Stake (PoS) systems and earn PoS yields by staking their bitcoins. This innovation follows Nakamoto's spirit and does not require any soft/hard fork of the Bitcoin chain, nor any bridging, wrapping, and third party custody of the bitcoins. Recent data reinforces the pressing need for such an innovation and is highlighted in a recent Glassnode report, which found that a staggering 66% of Bitcoin’s circulating supply, equivalent to 12.26 million BTC, remained dormant for a year. This indicates vast untapped potential, and the opportunity for positioning idle bitcoins to boost the economic security of PoS chains and decentralized applications (dApps) that rely on staking.
What investors are saying
Luke Pearson, General Partner at Polychain:
“Polychain is pleased to announce our participation in Babylon’s recent funding round. Babylon boasts a world-class team with strong technical and academic expertise. We are thrilled to support them in creating Bitcoin staking, unlocking the largest digital asset to further blockchain security as a whole. Babylon's introduction of a Bitcoin staking protocol not only unlocks Bitcoin's potential but also paves the way for innovative Bitcoin-backed services and native blockchain advancements. We eagerly anticipate the ripple effects Babylon will create, positively influencing new chains and enhancing security across the entire blockchain landscape.”
Alex Pack, Managing Partner at HackVC:
“We are thrilled to have co-led Babylon’s current round. Babylon is a significant development in the Bitcoin ecosystem. By creating the first protocol for Bitcoin staking and restaking, Babylon not only unlocks the largest blockchain asset, but can also make Bitcoin-backed security services (such as data availability service) possible for the broader blockchain ecosystem"
Vance Spencer, co-founder Framework Ventures:
"We are incredibly excited to back Babylon and stake our BTC through their staking and restaking protocol. Staking is the next evolution for BTC and will bring native yield, utility, and an expansive market to its doorstep. Babylon's team is boldly pushing the frontier of what is possible for BTC forward"
Sandeep Nailwal, co-founder of Polygon:
"At Polygon, we are dedicated to supporting initiatives that tackle crucial challenges within the blockchain ecosystem and allow builders to build the next billion dollar companies. Babylon plays a crucial role as a marketplace connecting decentralized trust to yield, revolutionizing the staking landscape by enabling Proof-of-Stake (PoS) chains to stake not only native tokens but also Bitcoin as well. With Polygon zk proving technology those chains can get settlement on Ethereum and interconnectivity with multiple layer2 ecosystem. Babylon is becoming a contributor to Polygon CDK and the Polygon ecosystem more broadly. Babylon integrating their solution into Polygon's staking hub not only bolsters the security of emerging chains but also addresses inflationary pressures inherent in traditional staking models. This integration allows for a more equitable and efficient token economy. Developers will be able to use Babylon's solution by launching a CDK chain using Polygon CDK.
Our mission at Polygon is to facilitate the creation of decentralized ecosystems atop Ethereum for any community. Babylon's vision aligns with our commitment to fostering decentralized ecosystems by offering diverse options for communities to seamlessly choose from. We are enthusiastic about the positive impact this collaboration will bring to the wider blockchain community."
Nic Carter, Founding Partner at Castle Island Ventures:
“We’re excited to be investing in Babylon and helping the team realize their vision. Babylon is a world class technical and academic team and we believe their innovations in Bitcoin restaking are a fundamental development in blockchain security. Bitcoin’s Proof of Work security remains the gold standard among blockchains, and Babylon for the first time makes it available to other protocols. We’ve seen the success of restaking elsewhere, and now Babylon unlocks the ‘dry powder’ of idle Bitcoin to provide trustless economic security to other blockchains. This is a significant positive development both for Bitcoin itself and other protocols aiming to inherit its security. At Castle Island we are excited to be witnessing a resurgence in Bitcoin-native innovation, and Babylon is emblematic of that vision.”
Jeff Ren, Partner of OKX Ventures:
"OKX Ventures is excited about our investment in Babylon, a timely and pivotal innovator in the Bitcoin ecosystem. Our commitment reflects our support for groundbreaking developments and visionary founders in the industry. OKX has been a steadfast supporter and leader in the BTC and BRC20 ecosystems, and we see Babylon's approach to Bitcoin staking and restaking as a significant game-changer. We're looking forward to collaborating with them, leveraging their innovations to enhance BTC's utility and impact, particularly as the market shows renewed energy."
In 2022, Babylon successfully concluded its initial seed funding round, securing investments from IDG, DHVC, Breyer Capital, and other contributors.
About Babylon
Babylon is a blockchain project that designs security sharing protocols for the decentralized economy, founded in 2022 by Stanford Professor David Tse and Dr. Fisher Yu. Professor Tse is a member of the U.S. Academy of Engineering. He is renowned as the inventor of the legendary proportional-fair scheduling algorithm for wireless communications, and is the recipient of prestigious awards such as the IEEE Claude E. Shannon Award and the IEEE Richard W. Hamming Medal. The project is led by a team of consensus protocol researchers and experienced layer 1 engineers from around the world.
Babylon's mission is to scale Bitcoin to secure the decentralized economy. To achieve this, Babylon utilizes the three primary facets of Bitcoin: its asset, its reliable timestamping service, and its most censorship-resistant blockspace in the world. To leverage these facets, Babylon is developing three innovative security-sharing protocols: Bitcoin Staking Protocol, Bitcoin Timestamping Protocol, and Bitcoin Data Availability Protocol. Through these pioneering protocols, Babylon envisions a more secure and decentralized future.
For more information about the Babylon project, please visit:
Website: www.babylonchain.io I Twitter: https://twitter.com/babylon_chain
David Tse, Co-founder: Acclaimed Professor of Engineering at Stanford University, whose previous work underpins the protocols of 3G/4G/5G networks. Recipient of prestigious awards such as the IEEE Claude E. Shannon Award and the IEEE Richard W. Hamming Medal.
Fisher Yu, Co-founder: Blockchain security expert and tech entrepreneur. Main inventor of many impactful works in blockchain scaling and data availability areas, such as Polyshard and Coded Merkle Tree.
