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Bitcoin Startup Babylon Raises $70 Million to Bring BTC Staking to Ethereum and Solana

Babylon, a startup working to enable native Bitcoin staking on chains like Ethereum and Solana, just raised $70 million towards that goal.

A crypto startup seeking to use Bitcoin for native staking on other blockchain networks has secured $70 million in fresh funding to fuel its ambitious goals.

Babylon, which is aiming to do something never accomplished before, secured the cash from lead investor Paradigm, a prominent crypto venture capital firm. Other contributions came from Bullish Capital and Polychain Capital. 

The startup wants to use Bitcoin, the biggest cryptocurrency by market cap, as a resource for staking. Previously, the firm told Decrypt that it’s building infrastructure to use Bitcoin staking to validate nodes on networks such as Ethereum and Solana.

“This funding will accelerate our mission to make Bitcoin the security backbone of proof-of-stake systems,” Babylon founder David Tse said in a statement. “Our team is dedicated to advancing the utility of Bitcoin beyond its traditional roles and enhancing the security of the entire blockchain ecosystem.”

Currently, Bitcoin runs on a very different system to staking protocols because it uses a system called proof-of-work.

Proof-of-work requires lots of computing power—in the form of miners—to process transactions. It’s an expensive and energy intensive process.

But with proof-of-stake, anyone can participate by “locking up” their assets to power a crypto network. Staking networks include the likes of Ethereum, Solana, and Cardano. 

Babylon wants those holding Bitcoin to be able to earn a yield by pledging their coins to staking networks. It’s a bold challenge, but the startup—led by a Stanford professor and a former Dolby engineer—says it has found a way. Last year, it raised $18 million from investors. 

If it does achieve what it wants, those sitting on satoshis (aka the smallest denomination of Bitcoin) will soon be able to earn yield.

This type of coin is 'among the riskiest of cryptocurrencies

The price of Dogecoin, a popular digital token branded after the "doge" shiba inu meme, has increased by around 14% over the past month, according to CoinMarketCap. And the price of Pepe, a meme coin named after the "Pepe the frog" meme, has soared by over 100% since April 29, per CoinMarketCap.
But before you consider investing in cryptocurrency, it's important to understand the difference between meme coins, altcoins and bitcoin.

Bitcoin

Bitcoin is the original cryptocurrency and the largest by market capitalization at over $1.3 trillion, according to CoinMarketCap. It was created by Satoshi Nakamoto, a person or group of people whose identity remains a mystery. Nakamoto envisioned bitcoin as an alternative version of virtual cash that wouldn’t rely on a government or financial institution, such as a bank, to function and facilitate payments.

Altcoins

Altcoins, also known as alternative coins, refers to any cryptocurrency that’s not bitcoin. Although some of these digital tokens may operate similarly to bitcoin, they are built on different blockchain networks.

There are thousands of altcoins, which are typically created with a specific purpose in mind. Take stablecoins, for example. A stablecoin is a type of altcoin that pegs its value to another asset, such as gold or the U.S. dollar, with the goal of stabilizing its price.

Meme coins

Under the umbrella of altcoins are meme coins. These virtual tokens are usually created for fun and named after internet memes or pop culture references. And although every meme coin is an altcoin, every altcoin isn’t necessarily a meme coin.

Although all cryptocurrency carries risk, meme coins can be especially treacherous for traders, Royal says.

"Meme coins are among the riskiest of cryptocurrencies because they seem to emerge from nowhere and information about them can be sparse," he says. "They’re expected to soar and plummet as the public sentiment shifts this way and that. Meme coins may capture the public’s fancy today and be gone tomorrow."

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PayPal USD Stablecoin Now Available on Solana Blockchain, Providing Faster, Cheaper Transactions for Consumers

Crypto.com, Phantom and Paxos are first to provide onramps to use PayPal USD (PYUSD) on Solana blockchain

SAN JOSE, Calif., May 29, 2024 /PRNewswire/ -- At Consensus 2024, PayPal Holdings, Inc. (NASDAQ: PYPL) announced that PayPal USD (PYUSD) is now available on the Solana blockchain, making PayPal's stablecoin faster and cheaper to use. The availability of PYUSD on Solana provides users1 with the choice of multiple blockchains allowing for increased flexibility and control.

The Solana blockchain is known for processing massive amounts of transactions at high speeds with extremely low costs, providing significant benefits for commerce use cases. As the most used blockchain for stablecoin transfers, according to data from blockchain analytics platform Artemis, Solana has emerged as the leading blockchain to run tokenized transactions and is ideal for PYUSD as it continues to be used for payment use cases.

"For more than 25 years, PayPal has been at the forefront of digital commerce, revolutionizing commerce by providing a trusted experience between consumers and merchants around the world. PayPal USD was created with the intent to revolutionize commerce again by providing a fast, easy, and inexpensive payment method for the next evolution of the digital economy," said Jose Fernandez da Ponte, Senior Vice President of the Blockchain, Cryptocurrency, and Digital Currency Group, PayPal. "Making PYUSD available on the Solana blockchain furthers our goal of enabling a digital currency with a stable value designed for commerce and payments."

"The Solana network's speed and scalability make it the ideal blockchain for new payment solutions that are accessible, cost-effective, and instantaneous," said Sheraz Shere, GM of Payments at the Solana Foundation. "Continued adoption from industry participants like PayPal helps realize the next generation of fintech innovation."