Babylon's 'Eigenlayer' for Bitcoin: LBTC Token Earns Interest, But Control Concerns Linger
Babylon, an 'eigenlayer' for Bitcoin, is currently in its testnet phase. Lombard, its partner, uses economically staked Bitcoins to secure further decentralized services. Lombard Bitcoin Token (LBTC) allows users to earn interest on their Bitcoins while holding them.
Babylon serves as a gateway to these services, with LBTC acting as a key once they become economically viable. Lombard is attempting to decentralize control over coins through a 'consortium' and secures them using CubeSigner. LBTC is a crosschain token that pays interest, inspired by another blockchain and 1:1 backed by Bitcoin. It enables earning by staking Bitcoins on other blockchains or providing liquidity to decentralized exchanges (DEXs).
However, it's important to note that Lombard is not truly decentralized. Users hand over control of their Bitcoins to others when using its services. Babylon's organization and specific funding rounds remain unclear, with no information available about an entity behind it or related funding rounds.
LBTC has secured a $16 million funding led by Polychain Capital. Despite Lombard's attempt at decentralization, users should be aware of the control they relinquish when using its services. Babylon's testnet phase continues, with LBTC serving as a gateway to its future services.
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