The Bitcoin-native interoperability protocol, Portal to Bitcoin, has secured $25 million in funding alongside the launch of what it describes as an atomic over-the-counter (OTC) trading desk.
In a Thursday announcement shared with Cointelegraph, the company revealed that the funding round was led by digital asset lender JTSA Global, following previous investments from Coinbase Ventures, OKX Ventures, Arrington Capital, and others.
With the new funding, the company has introduced its Atomic OTC desk, which offers “instant, trustless cross-chain settlement of large block trades.” This new service is similar to cross-chain atomic swaps provided by THORChain, Chainflip, and other Bitcoin-centric systems like Liquality and Boltz.
What distinguishes Portal to Bitcoin is its emphasis on the Bitcoin (BTC)-anchored cross-chain OTC market for institutions and high-net-worth individuals, along with its technological framework. “Portal provides the infrastructure to establish Bitcoin as the settlement layer for global asset markets, without relying on bridges, custodians, or wrapped assets,” stated Chandra Duggirala, founder and CEO of Portal.
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Only native assets, without custody
Portal to Bitcoin utilizes Hashed Timelock Contracts (HTLCs) across multiple chains and Bitcoin Taproot contracts to exchange native BTC for native assets on integrated blockchains without custodianship, emphasizing reduced trust assumptions. HTLCs are designed to ensure that either both parties complete the exchange, or both recover their original assets.
The platform employs BitScaler, a layer-3 similar to the Lightning Network built atop Bitcoin using Taproot and policy templates. It establishes channels resembling Lightning channels, creating a hub-and-spoke model where the validator federation serves as the hub and liquidity providers function as the spokes. Trades within these channels are secured using HTLCs.
This ensures that end-users do not need to rely on wrapped tokens managed by federations and instead interact solely with native assets on their respective chains. The system also ensures that if a function fails mid-swap and HTLCs expire, funds can be recovered.
Duggirala explained to Cointelegraph that while atomic swaps are available, systems like THORChain and Chainflip rely on vaults to take custody of funds from both parties under validator control. In contrast, with Portal to Bitcoin, “a majority of rogue validators could potentially steal all the vault-controlled funds.”
Liquality and Boltz share a similar HTLC-based architecture with Portal to Bitcoin but serve primarily as one-swap-at-a-time tools rather than a comprehensive liquidity layer and DeFi stack built on Bitcoin with pooled liquidity, highlighting a notable difference in their project scope.
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The security assumptions
PortalOS features a Notary Chain developed on the Ethereum Virtual Machine on Cosmos (EVMOS), with validators referred to as Portal Guardians. The network consists of 42 validator slots (increased to 150 according to Duggirala), with at least 21 targeted as a minimum. Validator selection is permissionless through a PBT staking auction, but currently, the validator set is permissioned, with plans for permissioned auctions in the future:
“We intentionally kept the initial validator set to known entities and more concentrated for the simple reason of node software management.”
The documentation clarifies that the low validator count was a deliberate choice and does not pose an issue, as they do not govern vaults or liquidity pools.
“Validators’ only role in the DEX is to match a buyer with a seller, or one party with another. They do not control the flow of funds,” clarified Duggirala.
However, according to the documentation, validators manage the Lightning hub and maintain the notary chain state, including pricing, liquidity pool accounting, trade matching, and cross-chain contracts for the protocol’s token. They are also expected to oversee the operation of an automated market maker (AMM) once the system evolves beyond its current order book model.
This indicates that while validators cannot directly seize or freeze user assets, they could still censor or delay swaps, misprice markets, disrupt the AMM’s function, or halt the system entirely if they act maliciously or become unavailable.
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