Portal to Bitcoin Secures $25 Million Funding
In a significant move for the cryptocurrency landscape, Portal to Bitcoin, a protocol designed for interoperability within the Bitcoin ecosystem, has successfully acquired $25 million in funding. This announcement, made public on Thursday, marks the onset of its new venture—a specialized atomic over-the-counter (OTC) trading desk. The funding round was spearheaded by JTSA Global, a notable digital asset lender, and included contributions from key investors like Coinbase Ventures, OKX Ventures, and Arrington Capital.
Introducing the Atomic OTC Desk
The newly established Atomic OTC desk aims to facilitate “instant, trustless cross-chain settlement of large block trades.” This innovative service draws parallels with existing tools used by platforms such as THORChain and Chainflip, as well as Bitcoin-centric solutions like Liquality and Boltz, though it distinguishes itself with a focus on catering specifically to institutional investors and high-net-worth individuals, or “whales.”
Technology and Security Features
Chandra Duggirala, the CEO and founder of Portal to Bitcoin, highlighted that their technology aims to position Bitcoin as the primary settlement layer across global asset markets, eliminating the need for bridges, custodians, or wrapped digital assets. Central to this operation are Hashed Timelock Contracts (HTLCs), which facilitate exchanges in a non-custodial fashion between native Bitcoin and assets from integrated blockchains, thus minimizing reliance on trust.
To ensure the security and efficiency of transactions, Portal to Bitcoin employs a technology stack that resembles a layer-3 solution akin to Bitcoin’s Lightning Network. This framework includes a hub-and-spoke architecture with validators acting as the central hub and liquidity providers as spokes, secured through HTLCs. This design assures users that they only need to interact with native assets on their respective chains without the complications of wrapped tokens.
Moreover, should a transaction encounter issues, such as a failure during the swap, users can reclaim their original assets via the HTLCs before they expire. Duggirala pointed out critical distinctions between Portal to Bitcoin and other atomic swap solutions. Unlike THORChain and Chainflip, which incorporate vaults managed by validators, Portal to Bitcoin’s approach does not involve custodial risks presented by potentially rogue validators controlling the funds.
Validator Framework and Future Plans
The underlying security framework utilizes a Notary Chain built on the Ethereum Virtual Machine on Cosmos, referred to as EVMOS, which currently has a limited number of validators—42 validator slots, with plans to increase this to 150. Although initial validator selection is permissioned, Duggirala mentioned that future implementations will include permissionless staking auctions to enhance decentralization.
While the limited validator count does not pose a threat since they do not manage liquidity pools, their roles involve trade matching and maintaining pricing and liquidity pool accounts. However, they do hold accountability over essential functions regarding the trading operations, including the potential to disrupt trading or delay swaps. Therefore, while user assets remain safe from direct seize or freeze actions by validators, a malicious or unresponsive validator could impact the protocol’s overall operation.
Conclusion
This funding and the launch of the Atomic OTC desk represent important steps forward in improving liquidity solutions within the Bitcoin space, marking Portal to Bitcoin as a pivotal player in the evolutionary dynamics of cryptocurrency trading.
