Lombard Finance has successfully raised $16 million to introduce Bitcoin-based restaking, a groundbreaking initiative aimed at enhancing BTC’s role in decentralized finance (DeFi). This funding will help transform Bitcoin from a store of value into a productive asset within the DeFi ecosystem.

Elevating BTC from Store of Value to Productive Asset

Lombard’s mission is to elevate Bitcoin beyond its traditional role as a store of value. By introducing restaking, Lombard aims to turn BTC into a productive asset that actively contributes to the Web3 economy. This development is significant as DeFi has primarily thrived on other blockchains.

Restaking first gained prominence on Ethereum through EigenLayer. EigenLayer allowed users to earn extra interest on assets they had already staked to secure Ethereum. These “restaked” assets were pooled together to support a web of other crypto protocols relying on proof-of-stake security.

Lombard’s Approach

Lombard’s restaking initiative builds upon Babylon’s cross-network security technology. Babylon allows people to use Bitcoin to secure other proof-of-stake networks. Now, Lombard is taking it a step further by introducing liquid bitcoin tokens (LBTC). These tradeable receipts enable users to retain liquidity over their staked BTC while securing other networks.

With this innovation, over $1.3 trillion worth of Bitcoin could be used for lending, borrowing, and trading, benefiting both Bitcoin holders and the broader DeFi ecosystem.

Funding and Vision

Lombard’s $16 million funding round was led by Polychain Capital, a prominent player in the crypto investment space. Other participants included BabylonChain, dao5, Franklin Templeton, Foresight Ventures, Mirana Ventures, Mantle EcoFund, and Nomad Capital.

Lombard’s ambitious vision aims to bridge the gap between Bitcoin and DeFi, turning the world’s most valuable cryptocurrency into an active participant in the evolving digital economy. This integration of Bitcoin into the DeFi landscape is set to unlock new opportunities and drive further innovation in the digital finance space.

Source: Coinmarketcap