Bitcoin staking protocol closes $18M round led by Polychain and Hack VC

Babylon’s raise may indicate a growing appetite for bitcoin use cases among investors

article-image

Julia Manga/Shutterstock modified by Blockworks

share

Babylon has raised $18 million to develop a protocol that lets users put up bitcoin to secure proof-of-stake blockchains.

Polychain Capital and Hack VC led the round, which also drew participation from Framework Ventures, Polygon Ventures, and OKX Ventures.

Bitcoin’s continued price run has coincided with growing dry powder deployment in mining companies. But Babylon’s raise points to investor interest in something beyond funding GPUs: finding new use cases for bitcoin.

Babylon originated in a blockchain lab at Stanford. It spun up a novel way to stake bitcoin as an economic security token on blockchains that use proof-of-stake to reach consensus. Proof-of-stake chains typically use their native tokens for staking — ether secures the Ethereum network, for instance — which can compromise security on chains where the native token isn’t sought-after. 

Read more: Let’s talk Bitcoin staking: Babylon’s litepaper

Babylon’s staking service joins bitcoin ordinals as an attempt to put bitcoin to use aside from its being a store of value. A vocal segment of bitcoin’s community contest novel use cases for bitcoin, but Babylon founder David Tse believes there is demand for his product among the asset’s holders.

“I think a good number of them do want to participate in a yield-generating opportunity, and those are the ones we are targeting. So for those folks who really believe bitcoin is just gold, then we just have to, you know, leave them with that belief,” Tse said.

Tse said Babylon will hit testnet in January 2024. The protocol would ideally like to go to mainnet by the time of bitcoin’s “halving,” when bitcoin rewards given to miners are cut in half, in April. Tse noted the mainnet deployment depends largely on the outcome of security audits on Babylon’s testnet. 

“Several” bitcoin miners participated in the funding round, Tse said, though he declined to disclose Babylon’s valuation.


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Javits Center North | 445 11th Ave

Tues - Thurs, March 24 - 26, 2026

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Monad SR Report Graphic.png

Research

Monad is a new Layer 1 blockchain designed as a high performance, EVM-compatible platform.

article-image

Engineers from MetaMask, Coinbase, Google, and the Ethereum Foundation make the case for onchain AI agents via ERC-8004

article-image

Legacy payments firm partners with Anchorage Digital to issue a dollar-pegged token under new US stablecoin law

by Blockworks /
article-image

As Solana ETFs launch but network REV trends lower, Jito sits at the intersection of new capital inflows and microstructure improvements

article-image

The Truth Social parent will integrate Crypto.com Derivatives North America, allowing users to trade prediction contracts under federal oversight

by Blockworks /
article-image

Partnership surpasses $2 billion in staked assets and adds support for new Proof-of-Stake networks

by Blockworks /
article-image

The tokenization leader will merge with Cantor Equity Partners II, becoming the first public firm focused on securities tokenization

by Blockworks /