Bitcoin News Today: Bitcoin DeFi startup BOB raises $21M with institutional backing for L2 expansion

Build on Bitcoin (BOB), a layer-2 blockchain network designed to enable decentralized finance (DeFi) on the Bitcoin network, has secured $21 million in strategic funding since December 2024, with $9.5 million raised in a recent round that included participation from Castle Island, Anchorage, Amber Group, and sats Ventures [1]. The funding round, as reported, marks increased commitment from existing investors and signals growing institutional interest in projects that aim to extend Bitcoin’s utility beyond its current role as a store of value [1].

Nic Carter, founding partner of Castle Island, emphasized the firm’s belief in Bitcoin’s foundational role in DeFi, stating that BOB is positioned to become a “marquee L2” in the space [1]. Anchorage and other institutional players are reportedly drawn to BOB’s hybrid architecture, which combines the security of Bitcoin with the composability of Ethereum-based DeFi protocols [1].

BOB’s technology leverages a hybrid chain model, operating as both an Ethereum rollup via the OP Stack and a Bitcoin-secured network through integration with Babylon. The network recently launched its testnet and is planning a mainnet launch in Q4 2025 [1]. A key milestone on the roadmap is the deployment of the BitVM bridge, which will allow native BTC to be used in DeFi applications on BOB, eliminating the need for wrapped tokens or centralized custody [1].

Dominik Harz, chief technology officer at BOB, highlighted that the bridge will enable BTC transfers to other smart-contract chains, with future upgrades potentially extending support to Solana, Ethereum, and Sui [1]. The protocol also plans to implement BTC-staked finality by the end of 2025, further enhancing Bitcoin’s role in cross-chain DeFi infrastructure [1].

BOB’s current total value locked (TVL) stands at $212 million, with $132.2 million attributed to DeFi and a user base of 553,000 [1]. This growth underscores the rising demand for DeFi solutions built on Bitcoin, which has historically relied on centralized custodians or wrapped tokens to enable on-chain interactions. BOB’s BitVM2 technology, co-authored by co-founder Alexei Zamyatin, is a key innovation that enables users to interact with DeFi using native BTC without compromising control of their assets [1].

The strategic round’s success is further indicative of a broader shift in the crypto industry, where investors are increasingly backing projects that aim to enhance Bitcoin’s utility in the DeFi ecosystem. The participation of institutional-grade firms like Castle Island and Anchorage is not just a vote of confidence in BOB’s technology but also a sign of the growing institutional appetite for Bitcoin-based innovation [1].

As the project moves toward its planned mainnet launch, the challenge will be to attract and retain users who are traditionally hesitant to engage with DeFi due to risks such as smart contract vulnerabilities and liquidity constraints. BOB’s ability to provide a secure, user-friendly environment for native BTC DeFi will be critical to its long-term success [1].

Source: [1] Bitcoin-DeFi startup BOB tops up funding to $21M as Castle Island, Anchorage join https://cointelegraph.com/news/bitcoin-defi-startup-bob-raises-21m-castle-island-anchorage-invest