Babylon secures $15M from a16z Crypto to expand Bitcoin lending

Babylon has raised $15m from a16z Crypto through the sale of its native BABY tokens to fund development of Bitcoin-native lending infrastructure.

The investment aims to support Babylon’s trustless system that allows bitcoin to be used as collateral while remaining on the Bitcoin network.

a16z Crypto said limited programmability has left large amounts of bitcoin idle and that native lending could unlock significant onchain capital.

Babylon was founded in 2022 to enable bitcoin staking and lending without wrappers or custodians.

The protocol is building trustless vaults that allow users to retain control of their BTC while accessing decentralised finance services.

In December, Babylon partnered with Aave Labs to integrate bitcoin-backed lending into Aave V4.

The joint product is expected to begin testing in the first quarter of 2026, with a launch targeted for April 2026.

BABY rose about 5% following the funding announcement, according to market data.

The deal comes as crypto lending returns with tighter risk controls after the 2022 market collapse.

At the time of reporting, Babylon price was $0.02034.