- By leveraging the asset to safeguard other cryptocurrency networks, Lombard and staking company Babylon are collaborating to enable users to earn interest for restaking with Bitcoin.
The latest buzz in Ethereum blockchain circles is restaking. By using their staked assets to help secure other blockchain apps, users can earn interest.
Developers are attempting to emulate Ethereum’s astounding popularity even on other ecosystems, such as Solana.
Therefore, it was only a matter of time until restaking appeared on the blockchain with the highest value, Bitcoin.
Therefore, it was only a matter of time until restaking appeared on the blockchain with the highest value, Bitcoin.
The business Lombard has raised sixteen million dollars to develop Bitcoin-based restaking in collaboration with the Bitcoin staking protocol Babylon. Apart from leveraging the recent surge in popularity, Lombard is the most recent venture to include Bitcoin into the broader domain of decentralized finance (DeFi), an area that has predominantly excluded Bitcoin until now.
The business said in a statement shared with CoinDesk that Lombard wants to transform Bitcoin from a store of wealth into a useful asset that flows into the Web3 economy and promotes sustainable growth.
Lombard’s investment round was led by Polychain Capital, with participation from dao5, BabylonChain, Inc., Franklin Templeton, Foresight Ventures, Mirana Ventures, Mantle EcoFund, and Nomad Capital.
EigenLayer, one of the biggest DeFi success stories in recent memory, offered restaking on Ethereum. With the promise of offering customers additional income on assets they had previously staked to help protect Ethereum, EigenLayer soared over $18 billion in deposits in less than a year.
The restaked assets of EigenLayer are combined to provide proof-of-stake security for a network of various crypto protocols. EigenLayer and similar restaking protocols essentially provide investors with an additional means of leveraging their cryptocurrency holdings while also enabling nascent blockchain apps to bootstrap their security.
Bitcoin retreating
Built on top of Babylon, which enables users to use bitcoin to secure other proof-of-stake networks, is Lombard’s journey into restaking. Prior to this, Paradigm oversaw a $70 million financing round for the Bitcoin staking business.
With the introduction of liquid bitcoin tokens, or LBTC—a type of tradeable receipt on Babylon deposits—Lombard builds on Babylon’s cross-network security technology. According to Lombard, LBTC will enable users to maintain liquidity over the BTC they’ve staked to safeguard other networks.
Over $1.3 trillion in Bitcoin can be used to lend, borrow, and trade by bringing together major ecosystems and DeFi protocols to onboard LBTC, according to a statement released by Lombard and shared with CoinDesk. This presents new capital opportunities for bitcoin holders as well as new capital and users for the ecosystems and their protocols.
On EigenLayer, the ETH token was first the most popular staked asset. Compared to most other digital currencies, ETH (and ETH derivatives) were thought to be less prone to experience a sharp decline in value, which might compromise the security of proof-of-stake networks.
With Bitcoin being the oldest blockchain, Ethereum has many of the same characteristics that make it an obvious choice for restaking. With a market value of $63,000 at the time of publication, Bitcoin has the highest market value on the blockchain and is generally less volatile than other cryptocurrency assets.
Olaf Carlson-Wee, the founder of Polychain Capital, stated in a statement, “Our commitment to Lombard represents a deeper belief in the leverage Bitcoin can have in catalyzing growth across the whole blockchain space.”
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
