Key Points
- Bitfinity Network introduces its Bitcoin Layer 2 solution, backed by $12 million funding, to integrate Ethereum-compatible DeFi capabilities into Bitcoin.
- Bitfinity’s Bitcoin L2 solution uses Internet Computer Protocol’s Chain Fusion Technology, enabling seamless interaction between Bitcoin-native assets and Ethereum’s ecosystem.
On November 19, 2024, Bitfinity Network made its debut in the Bitcoin ecosystem.
They unveiled their Bitcoin Layer 2 (L2) solution, supported by a substantial $12 million funding round.
The project’s primary objective is to incorporate Ethereum-compatible decentralized finance (DeFi) capabilities into Bitcoin, thus extending its role beyond being merely a store of value.
Investor Support and Community Contributions
The Bitfinity project has drawn significant institutional support.
Notable investors such as Polychain and ParaFi provided significant backing earlier in the year.
Additionally, the project raised an extra $5 million through over-the-counter (OTC) token sales, largely driven by grassroots contributions from the Bitcoin community.
The introduction of Bitfinity’s Bitcoin Layer 2 solution marks a crucial step forward in improving Bitcoin’s scalability and functionality.
By leveraging Internet Computer Protocol’s (ICP) Chain Fusion Technology, Bitfinity fosters smooth interaction between Bitcoin-native assets and Ethereum’s ecosystem.
As institutional investors increasingly focus on Bitcoin, which recently surpassed $92,000, the demand to incorporate Bitcoin into decentralized applications (DApps) and smart contracts is growing.
Bitfinity has secured $7 million from institutional investors, including Polychain’s Beacon Fund, ParaFi, Draft Ventures, and the Warburg Serres fund.
This financial support enables Bitfinity to enhance scalability and broaden Bitcoin’s use cases.
Enhancing Bitcoin’s Scalability and Functionality
Bitfinity’s platform aims to improve Bitcoin’s scalability while promoting cross-chain compatibility.
This expands the range of Bitcoin-based applications, which were previously limited to platforms like Ethereum.
A representative emphasized the influence of institutional ETFs and increased accessibility for financial institutions, indicating a market shift.
Bitfinity’s Layer 2 solution prioritizes security through a proof-of-stake protocol bolstered by Chain-Key technology.
This method employs large signing committees capable of handling Bitcoin Schnorr and ECDSA transactions, surpassing the security of traditional multi-signature methods used by other Layer 2 platforms.
The platform seeks to increase Bitcoin’s utility by hosting decentralized applications such as Sonic, Chapswap, Lendfinity, and Omnity Bridge.
Bitfinity also plans to introduce advanced decentralized finance solutions, with backing from Liquity’s founder, thereby enhancing its ecosystem.
ICP’s Chain Fusion technology’s impact is growing, evidenced by a 1,230% year-over-year rise in usage reported by the Dfinity Foundation as of November 2024.
This growth is driven by Bitcoin-native applications like Bitfinity, Rainbow Protocol, and Tap Protocol, which use Chain Fusion to enable direct deployment of smart contracts and advanced programming on Bitcoin.
Chain Fusion boosts Bitcoin’s smart contract functionality by enabling direct interaction with the network.
This development brings Bitcoin closer to Ethereum’s capabilities in supporting decentralized applications and complex contract systems.
