Bitcoin’s Next Big Thing: Restaking
The world of decentralized finance (DeFi) is about to get a whole lot more interesting, thanks to a new development that could bring Ethereum-style restaking to Bitcoin. Lombard, a startup, has just raised $16 million to build out Bitcoin-based restaking, and it’s partnering with staking startup Babylon to make it happen.
Restaking, for the uninitiated, is a way for users to earn interest by leveraging their staked assets to help secure other blockchain apps. It’s been all the rage in Ethereum circles, and now it’s coming to Bitcoin.
The Rise of Restaking
Restaking was introduced on Ethereum with EigenLayer, one of the biggest DeFi success stories in recent memory. EigenLayer rocketed to $18 billion in deposits in under a year by promising users extra interest on assets they’d already “staked” to help secure Ethereum. The concept is simple: users stake their assets, which are then pooled together to secure a web of other crypto protocols that use proof-of-stake security. In return, users get a cut of the interest earned.
Bitcoin Joins the Party
Lombard’s dive into restaking will be built on top of Babylon, which lets people use Bitcoin to secure other proof-of-stake networks. The startup is extending Babylon’s cross-network security tech with the advent of “liquid bitcoin” tokens, or LBTC – a kind of tradeable receipt on Babylon deposits that will, according to Lombard, allow users to retain liquidity over the BTC that they’ve staked to secure other networks.
Bitcoin’s entry into DeFi could be a game-changer
A New Era for Bitcoin
The implications are huge. With Lombard’s technology, over $1.3 trillion in Bitcoin can be used to lend, borrow, and trade, providing new capital opportunities for Bitcoin holders and new capital and users for the ecosystems and their protocols. It’s a bold move that could elevate Bitcoin from a store of value into a productive asset that flows into the Web3 economy and drives sustainable growth.
Bitcoin’s potential in DeFi is vast
The Future of DeFi
Lombard’s commitment to Bitcoin represents a deeper belief in the leverage Bitcoin can have in catalyzing growth across the whole blockchain space. As the oldest blockchain, Bitcoin boasts the largest market value and tends to be less volatile than other crypto assets. It’s the perfect candidate for restaking, and Lombard’s technology could be the key to unlocking its full potential.
Bitcoin’s growth in DeFi could be exponential
