With $12 million in funding, Bitfinity Network has launched a new Bitcoin layer-2 (L2) solution that aims to develop deFi functionality for Bitcoin that is compatible with the Ethereum Virtual Machine (EVM).
The project received $5 million in over-the-counter (OTC) token sales, primarily contributed by the community, and support from institutional investors such as Polychain and ParaFi earlier in 2024.
The Bitcoin L2 will use the Chain Fusion Technology of the Internet Computer Protocol (ICP) to allow Bitcoin-native assets to function in an Ethereum-compatible ecosystem, according to a press release disclosed to Cointelegraph.
New L2 solutions are opening new avenues for Bitcoin as interest in the asset’s utility grows beyond a store of value, and the price of BTC recently broke $92,000.
Investor support
Polychain’s Beacon Fund, ParaFi, Draft Ventures, and Warburg Serres, among others, contributed $7 million to the funding round.
The Bitfinity Network platform will be further developed and adopted with the assistance of the $5 million raised primarily through the community, which grassroots contributors and crypto influencers have supported.
The platform is experiencing a change in dynamics, as a spokesperson from Bitfinity informed Cointelegraph, “With institutional ETFs on the horizon and a new regime marking Bitcoin more accessible to institutions.”
“At Bitfinity, we’re […] pioneering a side-chain infrastructure layer to boost scalability, unlock cross-chain functionality, and broaden Bitcoin’s applications.”
DApp hosting programs and security enhancements
Bitfinity’s spokesperson said the security of its L2 network is fortified by “a robust proof-of-stake protocol that leverages Chain-Key technology.”
“Chain-Key supports large signing committees capable of handling Bitcoin Schnorr and ECDSA transactions, offering stronger security than traditional multi-sigs used by most L2s.”
The spokesperson also disclosed that the ecosystem has plans to host decentralized applications (DApps) such as Sonic, Chapswap, Lendfinity, and Omnity Bridge.
“Bitfinity has backing from the founder of Liquity, which was a billion-dollar TVL borrowing and lending protocol, and we have plans to introduce similar solutions to our platform soon.”
ICP Usage increases by 13 times
The Dfinity Foundation, a developer, reported on November 4 that ICP’s cross-chain messaging protocol Chain Fusion experienced a 1,230% increase in utilization year-over-year due to BTC-native applications.
The BTC network’s deployment of smart contracts and complex programming through applications such as Rainbow Protocol, Tap Protocol, and Bitfinity, which utilize ICP, was the cause of the spike.
Chain Fusion makes smart contracts for BTC possible through ICP by “directly” interacting with the network “without using trusted bridges,” according to the Dfinity Foundation in an interview with Cointelegraph.
