Lombard, in collaboration with Babylon, has successfully secured $16 million for a practice known as Bitcoin “restaking.” This innovative approach allows BTC holders to earn interest by bolstering the security of Proof of Stake (PoS) blockchains like Ethereum and Cardano.
Polychain Capital has emphasized the significant potential of restaking, positioning Bitcoin as a valuable asset within the Web3 ecosystem. Through their partnership with Babylon, Lombard has secured funding to enable BTC holders to earn interest by using their Bitcoin holdings to enhance the security of various crypto networks, similar to the concept of Ethereum. Earlier in 2024, this opportunity was recognized in CNF as a groundbreaking development in the realm of cryptocurrencies. Babylon’s model facilitates PoS blockchains, such as Ethereum and Cardano, to enjoy heightened security while offering BTC owners newfound utility and profitability.
Renowned blockchain researcher Collin Brown expressed his perspective in a recent tweet, suggesting that this initiative aims to transform Bitcoin from merely a store of value into a productive asset within the decentralized finance (DeFi) sector, integrating it seamlessly into the broader Web3 ecosystem.
The $16 million funding for Bitcoin restaking, akin to Ethereum, has been secured by Lombard through their partnership with Babylon, marking a strategic move to position BTC as a productive asset in DeFi and integrate it into the expanding Web3 ecosystem. This effort is spearheaded by Polychain Capital and involves significant players such as BabylonChain, Inc., dao5, Franklin Templeton, Foresight Ventures, Mirana Ventures, Mantle EcoFund, and Nomad Capital.
The primary objective behind Lombard’s restaking venture is to elevate Bitcoin from a mere store of value to a productive asset that contributes to the Web3 economy, fueling sustainable growth.
The concept of “restaking” was initially introduced by Ethereum with EigenLayer, considered a notable milestone in DeFi history. EigenLayer’s extension to Bitcoin, referred to as StakeLayer, announced a pre-sale distribution, as detailed in a CNF post. EigenLayer rapidly amassed $18 billion in deposits within a year by offering users additional interest on assets they had already staked to support Ethereum.
Olaf Carlson-Wee, the founder of Polychain Capital, highlighted that despite Ethereum’s exceptional restaking features, which could potentially be applied to Bitcoin, BTC’s robust market value remains unmatched. He affirmed the commitment to Lombard as a testament to their belief in Bitcoin’s potential to drive growth across the entire blockchain space.
At present, Bitcoin (BTC) is trading at a price of $61,185.59, experiencing a 2.83% decrease over the past day and a 1.36% decrease over the past week.