Babylon's Bitcoin Staking

Lombard is unlocking new utility for Bitcoin in partnership with Babylon.

Shared Security Backed By BTC

Our Collboration with Babylon

Babylon is the Eigenlayer of Bitcoin, and Lombard will enhance the supply side into Babylon's two-sided market. This market accepts Bitcoin as a security asset, offering it to PoS networks and dApps as crypto-economic security.

Lombard built LBTC on top of Babylon to realize a marketplace between users looking to stake BTC and PoS needing assets for security. This allows BTC holders to earn rewards for staking whilst simultaneously maintaining liquidity, enabling them to move freely through DeFi.

Overview of Proof-of-Stake mechanisms

Proof-of-stake (PoS) is an industry-leading blockchain consensus mechanism. However, PoS is extremely capital-intensive: the blockchain network's security heavily relies on the economic value to be locked (or "staked"). Bitcoin is well-positioned to address this need and bolster PoS security—Bitcoin is the leading digital asset with gigantic economic value.

Introduction to Babylon’s Bitcoin Staking

Bitcoin staking brings new utility to “digital gold”. Decentralized security markets, pioneered by Babylon and EigenLayer, offer PoS systems (e.g., new blockchains and L2 rollups) access to staking capital from Bitcoin.

The benefits this are twofold: (1) PoS chains can tap into Bitcoin-backed security to launch secure protocols faster, and (2) BTC stakers can earn yield from providing Bitcoin-backed security.

It's a win-win situation that will revolutionize the Web3 economy.

Babylon's innovations creates the opportunity for a low-risk, yield-bearing liquid token like LBTC to be built on top.

Proof of Concept for Shared Security: EigenLayer

EigenLayer, along with its liquid restaking ecosystem protocols, shares a similar objective to Babylon but revolves around Ethereum as the primary asset for shared security and liquidity. Despite being a relatively new primitive and not yet fully operational, EigenLayer faced significant adoption and acclaim from leading industry players. As of May 2024, EigenLayer has reached a Total Value Locked (TVL) of $19 billion.

Lombard is built on top of Babylon

BTC staked with Babylon alone remains locked out of DeFi

Babylon is a fundamental protocol but, Babylon's staking does not address Bitcoin's fragmentation: the absence of cross-chain composability, and the lack of DeFi integrations. Additionally, staking BTC natively through Babylon implies a liquidity risk, as immediate withdrawals are not possible.

Lombard Unlocks Staked BTC Liquidity

Building on top of Babylon's Bitcoin staking, we created LBTC to unlock Bitcoin's liquidity. BTC staked to Lombard is restaked into Babylon to earn a native yield. LBTC represents BTC staked into Babylon.

LBTC is yield-bearing, cross-chain capable, and backed 1:1 to BTC.

With LBTC, holders earn native-yield from Babylon staking, Lombard Points for early participation, and the liquidity to use LBTC across DeFi. LBTC is backed 1:1 with BTC, and can be used as collateral in numerous lending and borrowing protocols, across perp DEXs, and more.