Interlay, a Bitcoin (BTC) interoperability platform that was launched on Polkadot, has reportedly raised a seed funding of USD 3 million to continue development of its core decentralized financial product. The funding marks another significant capital investment in the blockchain sector.
The financing round was led by IOSG Ventures and other participants like Launchub Ventures, Blockchain.com, KR1, Zeeprime, CMS Holdings, and Hypersphere. Co-Founder of Bitmain, Jihan Wu, and Blockchain.com’s CEO, Peter Smith were among the angel investors involved in the round.
Sources claim that the recent financing will largely benefit interBTC, Interlay’s platform that enables users to pay, earn and invest using Bitcoin on any blockchain. The platform was earlier commissioned on Polkadot and is expected to be extended to other blockchains, which include Cosmos and Ethereum (ETH).
Interlay first received funding from Web3 Foundation, a pioneer in decentralized web, based on which it developed its Bitcoin bridge in early 2020 which is currently in its nascent stage.
However, Interlay developed a model for trapping BTC on the Bitcoin blockchain and minting PolkaBTC on Polkadot using the grant offered by Web3 Foundation. If Polkadot becomes a multi-blockchain meeting point, all the interoperability activities will have to utilize bitcoin, the original crypto asset.
Interlay apparently stated that its interBTC platform is entirely supported by Bitcoin in a one-to-one ratio. Anyone will be able to manufacture interBTC by running their own vault or by locking their Bitcoin. This can happen because the reserves of Bitcoin are held in collateralized vaults.
The interBTC product is considered to be insured, which implies that consumers can go back to Bitcoin as per their convenience.
Partner at IOSG Ventures, Xinshu Dong, supposedly said that the initial strategy of Interlay is to connect Bitcoin and Polkadot efficiently and securely. Dong sees decentralized infrastructure as a crucial element for multi-chain ecosystems. The advent of multi-chain networks has been an important development in the blockchain sector and Polkadot has been pioneering this development.