Bima Labs secures $2.25 million in funding for the issuance of a Bitcoin-backed stablecoin, USBD.

According to The Block, Bitcoin development team Bima Labs has secured a $2.25 million funding in a seed round led by Portal Ventures for its project developing a Bitcoin-backed stablecoin, USBD.

Bima Labs announced on Monday that the Bitcoin stablecoin development project was led by Portal Ventures, with Draper Goren Blockchain, Sats Ventures, Luxor Technology, CoreDAO, and Halo Capital participating as well. Angel investors including Ryan Fang from Ankr, Brian Crain from Chorus One, Jeffrey Feng from Sei Labs, and Smokey from Berachain also joined this round of funding.

Founder and CEO Siddarth Sridhar told The Block that Bima was founded in April and began fundraising at that time, completing this round of funding within three months. Sridhar stated that the funding round structure included equity with token warrants. He declined to comment on the valuation.

What is Bima Lab?

Bima developed USBD, a stablecoin backed by Bitcoin, which can be minted by providing Bitcoin liquidity as collateral and re-collateralizing tokens. Bima stated that they will accept collateral from multiple blockchains, including Bitcoin, Bitcoin scaling network, Ethereum Virtual Machine (EVM) compatible networks, and Solana.

Sridhar stated: "Users can deposit Bitcoin liquidity staking tokens (LST) and liquidity re-staking tokens (LRT) from various providers such as Lorenzo, Lombard, pStake, Bedrock, Acre, DLC.link, ALEX Labs BTC, etc., to mint USBD. The minted USBD stablecoin can be used for borrowing, lending, exchanging, and other purposes in decentralized finance applications to earn more rewards. Whether you are in China, the United States, Brazil, or Europe, we envision a world where the stablecoin USBD supported by Bitcoin provides credit and lending applications."

Development of USBD Mainnet

USBD is currently running on the testnet, and Sridhar stated that the mainnet will launch in the fourth quarter of this year. He added that Bima will also introduce its governance token BIMA around the same time, which will be issued on EVM-compatible chains, but it is not yet confirmed.

Bima has joined over a dozen projects in the Bitcoin ecosystem. Initially, Bima developed stablecoins based on the EigenLayer re-collateralization protocol in the Ethereum ecosystem but decided to shift to Bitcoin.

Sridhar mentioned that what Ethereum achieved in four to five years, Bitcoin can accomplish in four to five months. The Bitcoin ecosystem has a higher total potential market, higher asset utilization rates in Latin America, the Middle East, and North Africa, and ultimately has the potential to unlock higher revenue opportunities. With new funding, Bima plans to recruit across business development and engineering departments to expand its original six-person team.