Polychain and others have provided $12 million in funding to support the initiative
The Bitfinity Network, a Bitcoin layer-2 (L2) protocol, has launched with a vision to bridge the gap between Bitcoin and decentralized finance (DeFi). Backed by $12 million in funding, the initiative aims to create Ethereum Virtual Machine (EVM)-compatible DeFi functionality for Bitcoin users, enabling Bitcoin-native assets to integrate seamlessly into Ethereum ecosystems.
The funding round secured $7 million from institutional investors, including Polychain, ParaFi, and Draft Ventures. An additional $5 million was raised through over-the-counter (OTC) token sales, with significant support from grassroots contributors and the crypto community.
Using Internet Computer Protocol’s (ICP) Chain Fusion Technology, Bitfinity plans to enhance Bitcoin’s scalability and introduce cross-chain functionality. A spokesperson for the network explained that the platform uses a proof-of-stake protocol bolstered by Chain-Key technology. This ensures security for Bitcoin Schnorr and ECDSA transactions, offering more robust protection than the multi-signature mechanisms commonly used by other L2 networks.
Bitfinity is set to host a variety of decentralized applications (DApps), including Sonic, Chapswap, and Lendfinity. The platform also plans to introduce tools similar to Liquity, a billion-dollar borrowing and lending protocol, to expand Bitcoin’s DeFi potential.
Interest in Bitcoin’s applications beyond being a store of value has surged, particularly as its price recently crossed $92,000. Institutional interest, driven by the anticipation of Bitcoin ETFs, has further fueled this demand.
The Dfinity Foundation, which developed Chain Fusion, reported a 1,230% increase in usage of its cross-chain messaging protocol over the past year. Applications like Rainbow Protocol and Bitfinity have utilized this technology to implement smart contracts directly on the Bitcoin network without relying on trusted bridges.
