Bitcoin Layer 2 Bitfinity raises token round at $130 million valuation

Bitfinity, a blockchain project developing a Bitcoin BTC +4.28% Layer 2 network based on the Internet Computer ICP +6.96% protocol, raised $7 million in total funding.

Investors included Polychain Capital, ParaFi Capital, Warburg Serres, Dokia Capital and Draft Ventures, Bitfinity co-founder Max Chamberlin told The Block in an interview. The funding was realized in two parts — a seed round of about $1 million in 2021 and a growth round of the rest of the amount that closed last June — Chamberlin said. He added that both were token rounds, with the second round bringing Bitfinity’s valuation to $130 million.

Bitfinity has chosen to announce the funding at this time to generate anticipation leading up to the mainnet launch of its network, Chamberlin said. Currently in the testnet phase, Bitfinity plans to launch the mainnet either later this month or early February, according to Chamberlin.

What is Bitfinity?

Bitfinity is a Bitcoin scaling network built on the Internet Computer protocol. Its competitive edge is being Ethereum ETH +10.69% Virtual Machine-compatible, which will allow Ethereum developers to build Bitcoin-enabled decentralized applications on Bitfinity, Chamberlin said. “Bitfinity will not only handle Bitcoin Ordinals and BRC-20 tokens but also EVM assets,” Chamberlin said, adding that “the Bitfinity EVM will enable the deployment of EVM dApps with speeds 100 times faster than Ethereum and at a fraction of the cost.”

The growth of the Bitcoin ecosystem is seen as a key trend for 2024, driven by the growth of the Ordinals protocol last year. The native ORDI token of the protocol has achieved a market capitalization of $1.5 billion, while BRC-20 tokens, collectively, possess a market capitalization of $3.43 billion with a trading volume exceeding $1 billion in the last 24 hours, according to CoinGecko data. Bitfinity aims to further enhance decentralized finance activities on the Bitcoin blockchain, Chamberlin said.

Several dApps, including decentralized exchange Sonic, derivatives liquidity protocol Synthetix, and decentralized borrowing protocol Liquity LQTY +18.79% , are either building on Bitfinity or planning to do so, as indicated by Chamberlin said.

“As the demand to integrate Bitcoin increases, we believe Bitfinity’s EVM opens up the Bitcoin ecosystem to novel use cases and applications,” Ben Forman, managing partner at ParaFi Capital, said in a statement. “Solidity developers can now take advantage of Bitfinity’s high throughput, low fees, and Bitcoin-native support.”

There are currently around 20 people working for Bitfinity, and Chamberlin looks to grow the team to about 25 people in the coming months after the mainnet launch and building and growing its ecosystem.

Regarding the Bitfinity token, Chamberlin shared that several exchanges are expected to list it after the mainnet launch.