Bitcoin and Ethereum Integration: Babylon Raises $70 Million to Promote Interoperability

Babylon, a crypto startup co-founded by Stanford University engineering professor David Tse, has raised $70 million in its latest round of funding, according to a Bloomberg report. The company reportedly aims to bridge the gap between Bitcoin (BTC) and Ethereum (ETH), the two main cryptocurrencies.

Bitcoin as a betting asset

According to the 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 further its mission of enabling BTC to be “a staking asset” to secure other blockchains.

The recent funding round for Babylon highlights a shift in venture capital interest toward Bitcoin-focused projects. Traditionally, Ethereum and other blockchains have been favored due to their ease of running decentralized finance applications.

However, the success of non-fungible tokens (NFTs) on the Bitcoin blockchain, coupled with the approval and launch of Bitcoin exchange-traded funds (ETFs) in the US, has reignited enthusiasm for building within the Bitcoin ecosystem.

Professor David Tse explains that BTC is undergoing a “renaissance”, with a new wave of projects emerging on the network. Although Bitcoin was the first blockchain, the developer community has gradually shifted its attention to newer chains over the years.

However, recent events and several factors have caused a renewed focus on BTC. The approval of Bitcoin ETFs and the Bitcoin “Halving” event in April, which reduced mining rewards, contributed to the shift in sentiment.

Unlocking BTC’s Yield Potential

Babylon’s main objective is to allow Bitcoin holders to participate in validating transactions on proof-of-stake (PoS) networks, earning returns on their idle Bitcoin assets.

Staking, a mechanism used on Ethereum and other proof-of-stake blockchains, involves blocking 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 wanted to generate returns on their holdings.

Babylon’s approach is aligned with the importance of security in the Web3 ecosystem. By leveraging the market value of BTC, the startup believes it can guarantee the security layer for the entire Web3 ecosystem.

In particular, staking has become a lucrative sector in the digital asset 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 reinforce the decentralized world being built within the crypto space.