Startup Lombard Raises $16M for Potential Bitcoin Restaking Feature Inspired by Ethereum
The concept of “restaking” has been gaining significant traction within Ethereum blockchain communities, enabling users to generate interest by utilizing their staked assets to support other blockchain applications. This trend has even caught the attention of developers on alternative ecosystems like Solana, who are looking to emulate Ethereum’s success with restaking.
Inevitably, the practice of restaking has now extended to the most prominent blockchain of all: Bitcoin. Lombard, a startup, has raised $16 million in collaboration with the Bitcoin staking protocol Babylon to develop a Bitcoin-based restaking platform. Beyond capitalizing on the growing enthusiasm for restaking, Lombard is among the latest startups endeavoring to integrate Bitcoin into the broader realm of decentralized finance (DeFi), an area where Bitcoin has been notably absent.
According to a statement from the company, Lombard’s objective is to transform BTC from merely a store of value into a productive asset that contributes to the Web3 economy, fostering sustainable growth. The funding round for Lombard was spearheaded by Polychain Capital, with participation from BabylonChain, Inc., dao5, Franklin Templeton, Foresight Ventures, Mirana Ventures, Mantle EcoFund, and Nomad Capital.
The introduction of restaking on Ethereum was exemplified by EigenLayer, a standout success story in the realm of DeFi. EigenLayer rapidly amassed $18 billion in deposits within a year by offering users additional interest on assets they had already staked to secure the Ethereum network.
EigenLayer’s mechanism involves pooling “restaked” assets to fortify a network of diverse crypto protocols that rely on proof-of-stake security. This approach allows emerging blockchain applications to bootstrap their security while providing investors with a novel means to leverage their crypto holdings.
Lombard’s foray into restaking will leverage Babylon’s infrastructure, enabling individuals to utilize Bitcoin for securing various proof-of-stake networks. A previous $70 million funding round into the Bitcoin staking company was led by Paradigm.
Expanding on Babylon’s cross-network security technology, Lombard is introducing “liquid bitcoin” tokens, or LBTC, which are tradable receipts on Babylon deposits. These tokens are designed to offer users liquidity over the BTC they have staked to secure other networks.
The attributes that made Ethereum a natural fit for restaking also apply to Bitcoin, the original blockchain. Bitcoin’s substantial market value, with 1 BTC valued at $63,000 at the time of reporting, coupled with its relative stability compared to other cryptocurrencies, positions it as an appealing candidate for restaking endeavors.
In a statement, Olaf Carlson-Wee, the founder of Polychain Capital, expressed a strong belief in the transformative potential of Bitcoin in driving growth across the entire blockchain landscape.
