Our Collaboration with Babylon: Security, utility, and innovation with Bitcoin

This is the first blog in a series introducing Lombard’s ecosystem partners and collective goals. We believe ‘if you want to go far, go together’, and that’s why we’re working with some of the best minds to develop, secure, and integrate LBTC into the decentralized finance economy.

Lombard's strategic collaboration with Babylon is setting the stage for the next transformative phase of Bitcoin — where security, utility, and innovation converge to unlock infinite possibilities with digital gold.

This collaboration provides unprecedented levels of security and liquidity to the DeFi space, leveraging Bitcoin’s robust economic power to support the next generation of blockchain innovation and growth.

This blog post provides an overview of our collaboration and shares opportunities to join in on our journey.

About Babylon

The Babylon Bitcoin Staking Protocol allows BTC to be staked in a trustless and self-custodial manner to provide economic security for Proof-of-Stake (PoS) systems such as PoS chains, Layer 2 (L2) rollups, and Data Availability layers. The benefits are twofold: PoS networks can tap into Bitcoin-backed security, and BTC stakers can earn yield from providing Bitcoin-backed security. BTC staked into Babylon earns yield but is, however, illiquid.

Lombard x Babylon Working Together

LBTC is Lombard’s liquid Bitcoin, its underlying asset Bitcoin is staked into Babylon to earn a yield while staying liquid for use across DeFi. Lombard realized that building on top of Babylon would catalyze growth across the decentralized economy. By developing LBTC on Babylon, Lombard enhances the supply-side of the Babylon Bitcoin staking protocol, propelling the two-sided Bitcoin security marketplace and driving its adoption by PoS networks.

With the support of Babylon, Lombard’s LBTC is able to connect holders with more functional utility, offer DeFi protocols net-new capital, and provide PoS networks with security. LBTC is a universal product, suitable for all holders of BTC seeking a passive return in a low-risk manner through staking.

LBTC will be available soon, join the LBTC Waitlist to access LBTC before anybody else: https://www.lombard.finance/#LBTC_waitlist

How Lombard and Babylon work together

Lombard and Babylon work together in a number of ways, including:

• Babylon provides the foundation for Lombard’s LBTC: Babylon's innovations create the opportunity for low-risk, yield-bearing liquid tokens to be built on top. BTC staked to Lombard is restaked into Babylon to earn a yield. LBTC represents BTC staked into Babylon and is yield-bearing, natively cross-chain, and 1:1 backed by BTC.
• Lombard’s LBTC enhances the supply side of Babylon's two-sided Bitcoin security marketplace, created by the Babylon Bitcoin security protocol: By providing LBTC as a liquid restaked token, Lombard makes staking more desirable to BTC holders. Consequently, more BTC will be staked into Babylon, significantly bolstering the supply side of Babylon’s two-sided security market.
• Lombard will leverage Babylon’s economic security: Babylon's economic security will underpin the planned decentralization of Lombard's Security Consortium, and see Lombard deploying its own PoS network.

Benefits to BTC stakers

Lombard’s LBTC provides holders with infinite opportunities to lend, trade, borrow and earn in DeFi:

• Yield: PoS networks pay Babylon for the security received, which then accumulates to LBTC as yield.
• Liquidity: LBTC unlocks Bitcoin’s liquidity, allowing BTC holders to earn staking rewards while maintaining the liquidity to move freely through DeFi and access additional yield opportunities. Benefits to PoS Network
• Cost-benefits: Proof-of-stake is capital-intensive as the network's security heavily relies on the economic value locked within validator nodes. By leveraging Bitcoin-backed security, PoS networks can reduce the capital required to secure their networks.
• Crypto-economic security: Access to higher crypto-economic security than native tokens can provide.
• Speed: PoS networks can go to market more quickly and securely without the need to build validators in-house.

Looking ahead to PoS network selection

Our strategic alliance with Babylon marks a significant advancement in PoS network security and efficiency. As we move forward, the selection of PoS networks that will benefit from this enhanced security model will be a critical focus for both Lombard and Babylon. PoS selection will be driven by the parties that govern the Lombard protocol; and robust frameworks will be applied to the selection of PoS chains, L2 rollups and Data Availability layers to ensure security is delegated appropriately.

Looking Ahead to Babylon Chain Security

Ensuring the security of the Babylon chain is paramount. With Lombard’s support, the Babylon chain is secured from launch, setting a strong precedent for future growth and stability.

This collaboration between Lombard and Babylon marks an evolution of Bitcoin’s role within the DeFi ecosystem. By leveraging Babylon’s innovative staking protocol and Lombard’s liquid LBTC, a new utility for Bitcoin emerges. This strategic alliance not only enhances the security and efficiency of PoS networks but also provides BTC holders with unprecedented opportunities to participate in and benefit from the DeFi space.

The secure foundation laid by Lombard and Babylon paves the way for broader adoption and deeper integration of Bitcoin into the broader blockchain ecosystem. With a focus on robust security frameworks and strategic PoS network selection, Lombard and Babylon are committed to driving the next wave of blockchain innovation and growth.

Join us on our journey:

• Visit the website: https://lombard.finance
• Read through the documentation: https://docs.lombard.finance/
• Join the conversation on Telegram: https://t.me/+e8F4-kY9bKVlMDcx
• Meet the community in Discord: https://discord.com/invite/2HG7G69twc
• Follow @Lombard_Finance on Twitter: https://x.com/Lombard_Finance
• Follow Lombard on LinkedIn: https://www.linkedin.com/company/lombardfinance/

About Lombard

Named after the historic Lombard Street in London — a hub of financial activity since the Middle Ages — Lombard symbolizes a place where all participants are connected to opportunity. By adopting the Lombard name, we rebuild its legacy on digital blocks, transforming it into a modern nexus of innovation and connectivity.

Founded in April 2024, Lombard is dedicated to unlocking Bitcoin's potential as a dynamic financial tool by connecting it to DeFi. We are a diverse team of DeFi natives, working with technology and infrastructure partners towards a shared, ecosystem-driven mission to collectively onboard Bitcoin to DeFi.

About Babylon

Babylon is a project that designs Bitcoin security sharing protocols with a vision of building a Bitcoin-secured decentralized world. Its latest development is the world’s first trustless and self-custodial Bitcoin staking protocol, which enables bitcoin holders to stake their BTC on Proof-of-Stake (PoS) systems such as PoS chains, L2s, Data Availability (DA) layers, etc., enabling them to earn yield without the need for third-party custody, bridge solutions, or wrapping services. Babylon's approach combines the high security and wide adoption of Bitcoin with the efficiency and scalability of PoS systems, increasing Bitcoin's utility. Babylon was founded in 2022 by Stanford Professor David Tse and Dr. Fisher Yu. Professor Tse is a member of the U.S. Academy of Engineering and is renowned as the inventor of the legendary proportional-fair scheduling algorithm for wireless communications. Babylon is led by a team of consensus protocol researchers and experienced layer 1 engineers from around the world.

For more information about the Babylon project, please visit: Website: www.babylonchain.io Twitter: https://twitter.com/babylon_chain