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

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

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

Research Report Templates.png

Research

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.

article-image

Fiscal dominance isn’t about interest rates and it isn’t about Trump, either

article-image

Firestarter Storage brings decentralized storage and delivery to Solana

article-image

After lengthy closing arguments on Wednesday, the case is now in the hands of 12 jurors

article-image

Analysts cite weak trading volume and regulatory progress as factors

article-image

Builders weigh in on Ethereum’s first decade and the decisions that will define its next one

article-image

Closing arguments set to kick off Wednesday after Tuesday’s testimony from two expert witnesses and an a16z partner