Paradigm backs BTC staking protocol Babylon with $70m round

Bitcoin staking protocol Babylon has successfully raised $70 million in a funding round led by startup Paradigm.

Babylon’s investment round included the participation of Bullish Capital, Polychain Capital, Hashkey Capital, Mantle, Galaxy, Hack VC, ViaBTC Capital, Amber and HTX Ventures.

The platform aims to use this new capital to realize its mission of building a decentralized economy secured by Bitcoin. PoS chains enable various proof-of-stake (PoS) systems, such as layer 2 solutions, data availability layers, and oracles, to use Bitcoin as a staking asset.

Using Babylon’s modular design and discrete functionality, PoS systems can extend their crypto-economic security far beyond what native tokens offer.

According to Babylon, this approach could unlock value from the $1 trillion-plus Bitcoin ecosystem, significantly reducing inflationary pressure on PoS chains while increasing financial benefit for Bitcoin holders.

Babylon’s co-founder David Tse expressed his excitement about the investment.

“We are excited by the confidence shown by Paradigm, Bullish Capital, Polychain Capital and other investors,” he said. “This funding will accelerate our mission to make Bitcoin the security backbone of PoS systems.”

The paradigm’s growing footprint in crypto finance

Paradigm’s role in fundraising is notable. The research-focused technology investment company is actively involved in the crypto investment space.

Earlier this year, Bloomberg reported on Paradigm’s leading role in a major financing round for Merkle Manufactory, the company behind the Farcaster network.

Farcaster, valued at around $1 billion, has raised $150 million under management from Paradigm, alongside A16z Crypto, Haun Ventures, USV, Variant, Standard Crypto, and others.

In April, Paradigm also announced plans to raise up to $850 million in new funds for crypto investments as the digital asset industry continues its recovery.

This would mark Paradigm’s largest fundraising since 2021, when the firm secured $2.5 billion for a crypto fund; this was a record until it was surpassed by Andreessen Horowitz’s $4.5 billion crypto investment fund in May 2022.

Other venture capitalists, including a16z, Hack VC, and Hivemind, are similarly involved in fundraising with amounts ranging from $50 million to $150 million, reflecting renewed momentum in the cryptocurrency sector.