Restaking Revolution: Bitcoin Enters the Game

“Restaking” has been a hot trend in the Ethereum blockchain community, allowing users to earn interest by utilizing their staked assets to secure other blockchain applications. The concept has gained widespread popularity, with developers from different ecosystems like Solana attempting to replicate Ethereum’s success in restaking. Recently, this trend has made its way to the most valuable blockchain – Bitcoin.

Lombard’s Bitcoin Restaking Initiative

In a strategic partnership with Bitcoin staking protocol Babylon, startup Lombard has successfully raised $16 million to develop Bitcoin-based restaking solutions. Lombard aims to leverage the restaking trend and integrate Bitcoin into the decentralized finance (DeFi) ecosystem, which has been predominantly focused on other blockchains.

“Lombard seeks to transform BTC from a store of value into a productive asset that fuels the Web3 economy and fosters sustainable growth,” the company stated.

The funding round was led by Polychain Capital, with participation from BabylonChain, Inc., dao5, Franklin Templeton, Foresight Ventures, Mirana Ventures, Mantle EcoFund, and Nomad Capital.

Restaking Origins and Impact

Restaking was initially introduced on Ethereum through EigenLayer, a notable DeFi success story that amassed $18 billion in deposits within a year. EigenLayer offers users additional interest on their staked assets, which are used to secure the Ethereum network and other crypto protocols based on proof-of-stake security mechanisms.

This innovative approach enables blockchain applications to bootstrap their security while providing investors with a new way to leverage their crypto holdings.

Bitcoin Restaking with Lombard

Lombard’s foray into restaking will be powered by Babylon, enabling users to utilize Bitcoin to secure various proof-of-stake networks. The company plans to introduce “liquid bitcoin” tokens (LBTC), tradable receipts for BTC deposits on Babylon, enhancing liquidity for staked Bitcoin assets.

Lombard envisions LBTC integration across major ecosystems and DeFi protocols, unlocking over $1.3 trillion in Bitcoin for lending, borrowing, and trading activities. This initiative aims to create new capital opportunities for Bitcoin holders and foster growth within blockchain ecosystems.

The Bitcoin Advantage

Bitcoin’s market dominance and stability make it an ideal candidate for restaking. With the largest market value in the blockchain space and lower volatility compared to other cryptocurrencies, Bitcoin presents a secure option for staking and participating in the evolving DeFi landscape.

“Our support for Lombard signifies a strong belief in the transformative potential of Bitcoin to drive growth across the entire blockchain industry,” stated Olaf Carlson-Wee, founder of Polychain Capital.