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Bitlayer Labs, a Bitcoin Layer 2 solution built on the BitVM paradigm, has completed a successful $11 million Series A funding round. This latest round of investment, led by Franklin Templeton and ABCDE, brings Bitlayer's total funding to $16 million, and its valuation to $300 million.
The funding round, which was structured as a simple agreement for future equity (SAFE) plus token warrants, was also marked by participation from notable investors including Stake Capital Group, WAGMI Ventures, Skyland Ventures, Flow Traders, GSR Ventures, FalconX, Metalpha, 280 Capital, Presto Labs, Caladan and others. This investment reflects a broader trend of institutional recognition and support for innovative blockchain solutions.
1/ Bitlayer has successfully raised $11M in our Series A funding round, led by Franklin Templeton [@FTI_DA] and ABCDE [@ABCDELabs]. This brings our total investment to $16M.
— Bitlayer (@BitlayerLabs) July 23, 2024
Franklin Templeton's participation marks a notable milestone as Bitlayer becomes the first Bitcoin Layer… pic.twitter.com/4PoF3ft4Zj
Kevin Farrelly, managing principal of Franklin Templeton Digital Assets, highlighted Bitlayer's potential to unlock new use cases for Bitcoin, aligning with their commitment to fostering innovation in the digital asset space.
Founded in November 2023, Bitlayer has quickly established itself as a leader in the Bitcoin Layer 2 space. Co-founder Charlie Hu said his goals for the company are to achieve Bitcoin finality and establish a security-equivalent native Layer 2, marking significant advancements in the Bitcoin ecosystem.
The influx of capital will be crucial in driving the company's ambitious plans for global expansion, developer attraction, and protocol deployment, Bitlayer said in an announcement.
Understanding Bitcoin Layer 2 Solutions
Bitcoin Layer 2 solutions are protocols built on top of the Bitcoin blockchain to enhance its functionality and scalability. They aim to alleviate the limitations of Bitcoin's base layer, such as transaction speed and fees, while maintaining its core principles of security and decentralization. The BitVM paradigm, which Bitlayer employs, is a novel approach in this space, enabling complex computation on Bitcoin's network.
Bitcoin Layer 2 solutions like Bitlayer tackle the scalability challenges of the Bitcoin network by processing transactions off the main blockchain. This reduces congestion and lowers transaction fees while ensuring faster transaction times. Bitlayer’s approach combines security and efficiency, making it a promising solution for Bitcoin’s scalability issues.
The BitVM paradigm is an innovative approach that allows for more complex computations to be performed off-chain, leveraging the security of Bitcoin's blockchain. This enables a higher throughput of transactions and more sophisticated smart contract capabilities, positioning Bitlayer as a leading Layer 2 solution.
The Road Ahead
According to BitLayer, the company has had over 200 projects deployed on its mainnet since launch. It also holds the top spot among Bitcoin Layer 2s in terms of total value locked (TVL) at over $500 million, according to DefiLlama data.
With the Series A funds, Bitlayer plans to expand its ecosystem, support more native Web3 protocols, and continue the development of Mainnet-V2. This next phase aims to introduce a Bitcoin-native rollup that combines ZK and fraud proofs, further bolstering the security and efficiency of Bitcoin Layer 2 solutions.
