Bitfinity Launches Bitcoin Layer 2 Solution with $12M Funding

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Bitcoin has long been celebrated as digital gold—a secure, decentralized store of value. But its limited programmability has kept it from fully participating in the decentralized finance (DeFi) revolution led by platforms like Ethereum. That’s where Bitfinity Network steps in. On November 19, 2024, Bitfinity officially launched its Bitcoin Layer 2 (L2) solution, backed by $12 million in funding, aiming to unlock Ethereum-compatible DeFi on Bitcoin and dramatically expand its utility.

This milestone marks a significant leap forward in Bitcoin’s evolution, transforming it from a passive asset into an active participant in the Web3 ecosystem. By integrating smart contract functionality and cross-chain interoperability, Bitfinity is redefining what’s possible on the world’s most secure blockchain.

👉 Discover how Bitcoin is evolving with next-gen DeFi integration.

Enhancing Bitcoin’s Scalability and Cross-Chain Functionality

At the core of Bitfinity’s innovation is scalability and versatility. Built on the Internet Computer Protocol (ICP)’s Chain Fusion Technology, Bitfinity enables seamless interaction between Bitcoin-native assets and Ethereum’s expansive DeFi ecosystem. This means users can now leverage Bitcoin (BTC) in decentralized applications (DApps), lending protocols, and automated market makers—use cases previously restricted to Ethereum and EVM-compatible chains.

As Bitcoin’s price surged past $92,000 in late 2024 and institutional adoption accelerated—fueled by the anticipation of spot Bitcoin ETFs—the demand for more advanced Bitcoin-based financial tools intensified. Bitfinity answers this call by introducing a scalable sidechain infrastructure that maintains Bitcoin’s security while enabling high-throughput transactions and smart contract execution.

The project has secured $7 million in institutional funding from prominent investors including:

Additionally, Bitfinity raised $5 million through over-the-counter (OTC) token sales, driven largely by grassroots support from the Bitcoin community. This blend of institutional credibility and community-driven momentum underscores strong market confidence in Bitfinity’s vision.

“With institutional ETFs on the horizon and a new regime making Bitcoin more accessible to financial institutions, we’re pioneering a side-chain infrastructure layer to boost scalability, unlock cross-chain functionality, and broaden Bitcoin’s applications,” said a Bitfinity spokesperson.

This dual-source funding model not only strengthens Bitfinity’s financial foundation but also ensures alignment with both professional investors and decentralized communities.

Security Architecture: Proof-of-Stake Meets Chain-Key Technology

Security is paramount when bridging ecosystems—especially when involving Bitcoin, the most valuable and targeted blockchain network. Bitfinity addresses this challenge head-on with a proof-of-stake (PoS) consensus mechanism enhanced by Chain-Key technology.

Unlike traditional multi-signature schemes used by many Layer 2 solutions, Bitfinity employs large signing committees capable of managing both Schnorr and ECDSA digital signatures—Bitcoin’s native cryptographic standards. This allows for secure, trustless validation of transactions directly tied to the Bitcoin network, minimizing counterparty risk and reducing reliance on centralized custodians.

Chain-Key technology, developed by the DFINITY Foundation, enables this advanced cryptographic coordination. It allows independent nodes to jointly generate digital signatures without exposing private keys, ensuring robust security even under adversarial conditions.

This architectural choice positions Bitfinity as one of the most secure Bitcoin L2s available, combining the decentralization and immutability of Bitcoin with the agility of modern consensus systems.

Expanding the Bitcoin Ecosystem with Decentralized Applications

Bitfinity isn’t just about infrastructure—it’s about ecosystem growth. The platform already hosts a growing suite of decentralized applications (DApps), including:

Backed by Liquity’s founder, who has joined Bitfinity as an advisor, the network is poised to introduce more sophisticated DeFi primitives in 2025, such as algorithmic stablecoins, yield aggregators, and leveraged staking products.

These developments signal a shift: Bitcoin is no longer just a store of value—it’s becoming a platform.

👉 See how developers are building the future of finance on Bitcoin.

Chain Fusion Technology: Powering the Next Generation of Bitcoin Apps

The engine behind Bitfinity’s capabilities is ICP’s Chain Fusion Technology, which allows smart contracts to interact directly with external blockchains like Bitcoin—without intermediaries or wrapped assets.

As of November 2024, the DFINITY Foundation reported a 1,230% year-over-year increase in Chain Fusion usage. This explosive growth is driven by native Bitcoin applications such as:

These projects are pioneering direct smart contract deployment on Bitcoin, eliminating the need for complex bridging mechanisms that introduce latency and security risks.

Chain Fusion enables real-time communication between ICP-hosted smart contracts and Bitcoin’s UTXO ledger, allowing developers to build DApps that respond instantly to on-chain events—such as transaction confirmations or wallet activity—without relying on oracles or third-party relayers.

This breakthrough brings Bitcoin much closer to Ethereum-level programmability while preserving its unmatched security model.

Frequently Asked Questions (FAQ)

Q: What is a Bitcoin Layer 2 solution?
A: A Bitcoin Layer 2 (L2) solution is a secondary protocol built on top of Bitcoin that enhances scalability, speed, and functionality—such as supporting smart contracts and DeFi apps—without modifying Bitcoin’s base layer.

Q: How does Bitfinity differ from other Bitcoin L2s?
A: Bitfinity uniquely combines ICP’s Chain Fusion Technology with proof-of-stake and Chain-Key cryptography to enable secure, direct interaction with Bitcoin. Unlike solutions that rely on wrapped BTC or trusted bridges, Bitfinity reduces dependency on intermediaries.

Q: Can I use Ethereum-based tools with Bitfinity?
A: Yes. Bitfinity supports Ethereum Virtual Machine (EVM) compatibility, allowing developers and users to deploy and interact with existing Ethereum DeFi tools using Bitcoin assets.

Q: Is my BTC safe when used on Bitfinity?
A: Yes. Bitfinity uses advanced cryptographic techniques—including multi-party computation (MPC) and Chain-Key signatures—to ensure BTC remains securely anchored to the main chain while being used in DeFi applications.

Q: How can developers build on Bitfinity?
A: Developers can leverage EVM-compatible tooling and ICP’s robust SDKs to build scalable DApps that integrate directly with Bitcoin. Documentation and testnet access are publicly available.

Q: What role does ICP play in Bitfinity’s architecture?
A: ICP provides the computational backbone via Chain Fusion, enabling smart contracts hosted on ICP to initiate and verify transactions on Bitcoin in real time—unlocking true interoperability.

👉 Start building or investing in the future of Bitcoin DeFi today.

Core Keywords

Bitcoin Layer 2, Bitcoin DeFi, Bitfinity Network, Chain Fusion Technology, Ethereum-compatible Bitcoin, scalable Bitcoin solution, decentralized applications on Bitcoin, proof-of-stake Bitcoin L2

By merging the stability of Bitcoin with the innovation of DeFi, Bitfinity is paving the way for a new era of financial inclusion and programmable value. As adoption grows and developer activity accelerates, the line between “digital gold” and “programmable money” continues to blur—in favor of a more open, efficient, and interconnected financial future.