Bitcoin-Native Interoperability Protocol Portal Secures $25 Million in Funding

Portal to Bitcoin Secures $25 Million in Funding to Scale Cross-Chain Trading

Portal to Bitcoin, a Bitcoin-native interoperability protocol, has announced a $25 million funding round in conjunction with the launch of what it terms an atomic over-the-counter (OTC) trading desk. This development signifies a major step forward in facilitating seamless, trustless asset trading across different blockchains.

According to a Thursday announcement, the $25 million funding round was led by digital asset lender JTSA Global. This funding follows previous investments from Coinbase Ventures, OKX Ventures, Arrington Capital, and others. The participation of these prominent investors reflects growing confidence in Portal to Bitcoin’s vision and potential to revolutionize the cross-chain trading landscape.

Alongside the fresh funding, the company rolled out its Atomic OTC desk, promising “instant, trustless cross-chain settlement of large block trades.” The newly deployed service is reminiscent of crosschain atomic swaps offered by THORChain, Chainflip, and more Bitcoin-focused systems such as Liquality and Boltz.

What Sets Portal to Bitcoin Apart?

What distinguishes Portal to Bitcoin is its focus on the Bitcoin (BTC)-anchored crosschain OTC market for institutions and whales, coupled with its technology stack. Chandra Duggirala, founder and CEO of Portal, stated that “Portal provides the infrastructure to make Bitcoin the settlement layer for global asset markets, without bridges, custodians, or wrapped assets.”

Only Native Assets, Without Custody

Portal to Bitcoin leverages Hashed Timelock Contracts (HTLCs) across multiple chains and Bitcoin Taproot contracts to swap native BTC for native assets on integrated blockchains in a non-custodial manner, with a strong emphasis on reducing trust assumptions. HTLCs are designed to ensure that either sides complete the exchange or both sides recover their original assets.

It leverages BitScaler, a layer-3 resembling Lightning Network built on top of Bitcoin and using Taproot and policy templates. It opens channels much like Lightning channels, introducing a hub-and-spoke structure where validator federation is the hub and liquidity providers are the spokes. Trades in those channels are secured with HTLCs.

For the end-user, this means they do not have to trust wrapped tokens with federations and instead deal only with native assets on their native chains. The system also guarantees that if the function halts mid-swap and HTLCs expire, funds can be reclaimed.

Duggirala told Cointelegraph that while atomic swaps exist, THORChain and Chainflip are “based on vaults taking custody of funds from both parties” that are controlled by validators. Unlike with Portal to Bitcoin, with such setups, “a majority of rogue validators can potentially steal all the vault-controlled funds.”

Liquality and Boltz are closer to Portal to Bitcoin in their HTLC-based design, but they are mostly simple, one-swap-at-a-time tools, not a whole liquidity layer and DeFi stack on top of Bitcoin with pooled liquidity. This makes the project scope quite different.

The Security Assumptions

PortalOS has a Notary Chain built on the Ethereum Virtual Machine on Cosmos (EVMOS), with validators called Portal Guardians. This network has 42 validator slots (now increased to 150 according to Duggirala), with at least 21 targeted as a minimum. Validator selection is permissionless through a PBT staking auction. Still, Duggirala told Cointelegraph that currently, the validator set is permissioned and permissioned auctions will be implemented later:

“We intentionally kept the initial validator set to known entities and more concentrated for the simple reason of node software management.”

The documentation explains that such a low number of validators was chosen intentionally and is not an issue, since they do not control any vaults or liquidity pools. “Validators’ only function in the DEX is to match a buyer and a seller, or one party with another. They do not control the flow of funds,” Duggirala claimed.

Still, according to the documentation, validators control the Lightning hub and maintain the notary chain state, including pricing, liquidity pool accounting, trade matching, and crosschain contracts for the protocol’s token. They are also expected to help run an automated market maker (AMM) once the system moves beyond its current order book model.

That means that while validators cannot directly seize or freeze user assets, they could still censor or delay swaps, misprice markets, disrupt the functioning of the AMM or halt the system entirely if they acted maliciously or became unavailable.