Babel Finance’s US$50M Cross-Crypto Swap Emphasises Ethereum Potential

28th March 2022
Babel Finance’s US$50M Cross-Crypto Swap Emphasises Ethereum Potential
Image Credit: Quantitatives on Unsplash

Babel Finance has announced a giant cryptocurrency swap that highlights the future potential of Ethereum.

On Friday, the Singapore-based crypto lender and asset manager Babel Finance announced a two-year market to market cross-cryptocurrency swap of US$50 million in Bitcoin to Ethereum.

A cross-cryptocurrency swap is an exchange between two unique and separate blockchain systems without a central authority, facilitated by a smart contract – much like an over the counter (OTC) derivative.

In the case of Babel, a two-year US$50 million exchange between Bitcoin and Ethereum was agreed on.

The transaction signals that Babel has an underlying faith in Ethereum, and is offering more ETH liquidity to the market.

Describing it as “the first transaction of its kind”, Babel Finance’s head of treasury Yang Song said the swap addresses the lack of liquidity transactions in the crypto market.

“This could be regarded as an upgrade in crypto loan services from generation 1.0 to 2.0.” Yang said.

Boosting the amount of ETH in the market facilitates crypto lending and borrowing, which is worth US$8.2 billion.

The two-year transaction period suggests Babel is backing the long term potential of Ethereum. “This ETH lending demonstrates increasing long-term market demand for ETH, based on developments in DeFi, NFTs, and new projects,” said Yang Song.

Written by Bread News Team
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