Key Takeaways
- Lombard, a yield-bearing liquid Bitcoin solution incubated by Polychain, raises $16 million in seed funding.
- Lombard aims to unlock the $1.5 trillion in BTC liquidity currently isolated from DeFi and bring it into the ecosystem through its yield-bearing 1:1 LBTC.
- This can be used across various DeFi protocols on different blockchains, enabling users to lend, borrow, trade, and more.
Lombard has raised $16 million in a seed funding round. The round was led by Polychain with significant participation from dao5, Nomad, Foresight Ventures, and ABCDE, as well as major exchanges including OKX and Bitget.
Lombard aims to develop a Bitcoin restaking ecosystem in collaboration with Babylon, potentially redefining the utility of Bitcoin within the web3 space.
The round further saw commitments from prominent founders and executives within the cryptocurrency ecosystem, underscoring the broad-based confidence in Lombard’s innovative vision.
Transforming Bitcoin into a Productive Asset
Lombard’s primary goal is to elevate Bitcoin from a mere store of value to a productive asset that can seamlessly flow into the web3 economy. Central to this transformation is LBTC, Lombard’s flagship product.
LBTC is a liquid and yield-bearing representation of Bitcoin, designed to move across chains and decentralized finance (DeFi) platforms as collateral without sacrificing security. By facilitating the use of Bitcoin in lending, borrowing, and trading, LBTC aims to unlock new capital opportunities for Bitcoin holders and inject fresh liquidity into DeFi ecosystems.
Leveraging Extensive DeFi Experience
The Lombard team comprises veterans with extensive experience in the DeFi space, boasting executives from renowned companies such as Argent, Coinbase, and Maple. This expertise positions Lombard to effectively navigate and innovate within the rapidly evolving cryptocurrency landscape.
A Strategic Partnership with Babylon
The seed funding round follows Babylon’s recent $70 million Series A investment. Babylon’s Staking Protocol allows Bitcoin assets to be staked in a trustless and self-custodial manner, providing economic security for Proof-of-Stake (PoS) systems like chains, L2 rollups, and Data Availability layers.
By partnering with Babylon, Lombard will enable native BTC staking to secure PoS systems and earn yield. The liquidity for staked BTC will be unlocked through the issuance of LBTC, providing a liquid, yield-bearing Bitcoin representation.
Integration and Future Prospects
Lombard plans to integrate LBTC across major DeFi protocols on the Ethereum mainnet before its anticipated launch on popular L2 chains later this year.
Unlike similar tokens, LBTC’s native cross-chain functionality will benefit holders, chains, and their protocols by aggregating liquidity and discovering new use cases. This cross-chain approach is expected to play a crucial role in rebuilding the ecosystem on top of yield-bearing liquid restaked assets, a method proven successful in the Ethereum ecosystem by platforms like Lido, EigenLayer, and Ether.Fi.
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