Yield-bearing liquid Bitcoin solution provider Lombard announced on Tuesday that it has secured $16 million in a funding round led by Polychain Capital. The round attracted a diverse group of investors, including BabylonChain, dao5, Franklin Templeton, Foresight Ventures, and Mirana Ventures. Crypto exchanges such as Bitget, Bybit, and OKX also participated, likely aiming to attract new users by offering this innovative Bitcoin yield solution.
Diverse Investment Support
The funding round saw participation from prominent figures and firms in the crypto space. Founders and executives from Allora, Altlayer, Babylon, BeraChain, Euler, Gearbox, and Pendle joined the round, highlighting the widespread interest in Lombard’s project. The team includes experienced executives from well-known crypto companies such as Argent, Coinbase, and Maple.
LBTC: Making Bitcoin Earn Interest
Lombard, inspired by the historic Lombard Street in London, seeks to bridge the gap between decentralized finance (DeFi) and Bitcoin’s $1.5 trillion liquidity. The company’s core product, LBTC, is a yield-bearing token directly tied to Bitcoin (1 LBTC = 1 BTC), designed to make Bitcoin more accessible for DeFi applications like lending, borrowing, and trading.
Luke Pearson, a core contributor to the project, explained to Cryptonews that LBTC earns interest through Babylon’s staking protocol instead of relying on traditional wrapping mechanisms. LBTC is inherently compatible across different blockchains, allowing holders to move their tokens seamlessly within the web3 ecosystem. Additionally, LBTC avoids the risks associated with centralized custodians or bridges, as it is secured by a network of independent validators who verify every transaction.
Private Beta and Future Plans
Lombard is currently conducting a private beta and aims to achieve full functionality by the end of the month, pending the acceptance of deposits by Babylon. Following this, Lombard plans to integrate LBTC with multiple DeFi protocols on the Ethereum mainnet, with further expansion to Ethereum Layer-2 solutions and other major Layer-1 blockchains expected after the summer.
Funding Milestone Following Major Investment
Lombard’s funding success follows a significant $70 million investment in the Binance-backed Bitcoin staking protocol Babylon. Babylon’s technology supports the staking of Bitcoin without relying on a central custodian, enhancing the security of Proof-of-Stake (PoS) systems used by various blockchains, Layer 2 rollups, and Data Availability layers.
Environmental Impact and Future Outlook
Pearson also addressed concerns regarding Bitcoin’s energy consumption, highlighting that LBTC leverages Babylon’s PoS security model and functions as an ERC-20 token, potentially promoting sustainability. By integrating LBTC into the DeFi ecosystem, Lombard aims to provide a versatile and environmentally conscious solution for Bitcoin holders looking to earn yield on their assets.
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