Bitcoin layer-2 startup Bitlayer raises $11m

Bitlayer announced that it has raised $11 million in a Series A round led by Franklin Templeton and ABCDE, bringing its total investment to $16 million.

Bitcoin-focused layer 2 solution Bitlayer has secured $11 million in a Series A funding round led by Franklin Templeton and ABCDE to expand the list of protocols supported by the ecosystem built on BitVM, a system that enables smart contracts to be run on the Bitcoin network.

While the company’s valuation was not disclosed, the new capital is expected to support the development of Bitlayer’s Web3 platform, which runs on BitVM, a system that enables smart contracts in the Bitcoin ecosystem.

ABCDE Capital managing partner BMAN, in a statement regarding the financing, stated that Bitlayer has a total locked value of over $500 million with approximately 300 projects, highlighting its important role in the Bitcoin network.

“In realizing native validation on Bitcoin, Bitlayer will become the first native Bitcoin layer-2, a groundbreaking moment in Bitcoin history,” BMAN said in a press release on Tuesday.

With the fresh capital, Bitlayer is looking to expand its ecosystem by supporting its own custom-built Web3 protocols. Additionally, the funds will go toward developing Bitlayer’s Mainnet-V2, a Bitcoin-specific aggregation where layer-2 state transition is “protected by a Bitcoin-friendly proof system that combines both ZK and proofs of fraud,” the press release says.

In February, crypto-focused venture capital giant Pantera Capital predicted that the decentralized finance sector’s Bitcoin-based ecosystem could accumulate hundreds of billions of dollars in liquidity through Web3 protocols, especially if it reaches similar market shares to those on the Ethereum blockchain.

Historically, decentralized applications on Ethereum have accounted for between 8% and 50% of market value, with the current figure being around 25%. Based on these rates, Pantera Capital estimates that Bitcoin could see an influx of around $225 billion in value.

In the statement, it was stated that the initiative was also funded by companies such as Stake Capital Group, WAGMI Ventures, Skyland Ventures and GSR Ventures.