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Bitcoin's Cross-Chain Revolution: How Portal to Bitcoin’s $50M Raise and BitScaler Could Redefine DeFi Settlement

Bitcoin's Cross-Chain Revolution: How Portal to Bitcoin’s $50M Raise and BitScaler Could Redefine DeFi Settlement

ainvest2025/08/29 07:09
By:BlockByte

- Portal to Bitcoin raises $50M to develop BitScaler, a trust-minimized adapter enabling native Bitcoin transactions across 30+ blockchains without custodial bridges. - BitScaler uses modified multi-party channels and Taproot scripts to reduce on-chain footprints, slashing fees while maintaining non-custodial control over funds. - The protocol's Hub-and-Spoke network and Portal Attestation Chain ensure verifiable cross-chain operations, positioning Bitcoin as a scalable DeFi settlement layer. - With Bitcoi

Bitcoin’s potential as a cross-chain settlement layer has long been constrained by its lack of native programmability and scalability. However, Portal to Bitcoin’s recent $50 million raise—led by Paloma Investments and bringing its total capital to $92 million—signals a pivotal shift in this narrative. The funding targets BitScaler, a trust-minimized adapter that enables native Bitcoin transactions across 30+ blockchains without custodial bridges or wrapped tokens [1]. By addressing Bitcoin’s interoperability and throughput limitations, BitScaler could redefine its role from a store of value to a foundational infrastructure asset in decentralized finance (DeFi).

BitScaler: A Trustless Bridge to Bitcoin’s Ecosystem

BitScaler’s architecture leverages modified multi-party channel factories and Taproot scripts to reduce on-chain transaction footprints by consolidating thousands of peer-to-peer transactions into a single on-chain operation [2]. This approach slashes fees and enhances throughput, critical for scaling Bitcoin-based DeFi. The protocol’s non-custodial signing delegation layer further eliminates reliance on intermediaries, allowing users to retain control over funds while participating in liquidity pools or executing atomic swaps [2].

Portal’s integration with PortalOS—a modular operating layer supporting Bitcoin mainnet, Lightning Network, and Layer-2 solutions—adds another layer of security by avoiding bridging risks [2]. Crucially, BitScaler’s Hub-and-Spoke verifier network and Portal Attestation Chain (PAC) ensure all cross-chain operations are verifiable and traceable, aligning with institutional demands for transparency [2]. These innovations position Bitcoin as a settlement layer capable of supporting complex financial primitives, from lending protocols to tokenized real-world assets (RWAs).

Bitcoin’s Untapped DeFi Potential and the Role of Layer-2 Solutions

Despite Bitcoin’s dominance in market capitalization, only ~0.8% of its supply is currently used in DeFi, representing a $5.52 billion total value locked (TVL) in BitcoinFi protocols as of Q2 2025 [3]. Staking has emerged as the largest use case, with platforms like Babylon and CoreDAO offering liquid staking tokens (LSTs) and dual-token security models [3]. However, Bitcoin’s lack of native smart contract capabilities has limited its ability to compete with Ethereum’s $130 billion TVL.

BitScaler’s focus on layer-2 infrastructure addresses this gap. By enabling Bitcoin to serve as a settlement layer for cross-chain markets, it taps into a $500+ billion addressable market for Bitcoin DeFi [4]. For instance, the Bitcoin Hyper Layer 2—a project aiming to integrate Solana’s Virtual Machine (SVM) with Bitcoin’s security—demonstrates how layer-2 solutions can unlock high-speed, high-security applications [5]. Portal’s non-custodial approach complements these innovations, ensuring Bitcoin’s self-custody guarantees remain intact.

Institutional Adoption and the Path to Mass Adoption

Institutional interest in Bitcoin’s utility is accelerating. Bitcoin ETFs have seen record inflows, with European staking ETFs offering 5–6% annualized returns [4]. This trend underscores a growing demand to “put Bitcoin to work” in yield-generating protocols, a space where BitScaler’s cross-chain liquidity solutions could thrive. Portal’s pilot integrations with wallets and custody platforms further validate its institutional readiness, as non-custodial swaps gain traction among treasuries and hedge funds [1].

Regulatory clarity and interoperability will be critical for Bitcoin’s long-term relevance in DeFi. As Galaxy Digital notes, declining on-chain transaction volumes have shifted liquidity to off-chain products like spot ETFs [1]. However, layer-2 solutions like BitScaler could reverse this trend by making Bitcoin a viable settlement layer for on-chain activity. With Bitcoin’s active address count rising and tokenized RWAs expanding capital efficiency, the stage is set for a renaissance in Bitcoin-based financial infrastructure.

Conclusion: A New Era for Bitcoin’s Utility

Portal to Bitcoin’s $50 million raise and BitScaler’s technical breakthroughs signal a paradigm shift in Bitcoin’s role within decentralized finance. By enabling non-custodial cross-chain liquidity and reducing on-chain friction, BitScaler addresses Bitcoin’s scalability and programmability limitations, positioning it as a universal settlement layer. As institutional adoption and layer-2 innovation converge, Bitcoin’s TVL could surge into the hundreds of billions, transforming it from a digital reserve asset to the backbone of a multi-chain DeFi ecosystem.

**Source:[1] Portal to Bitcoin (PTB) - Technical Architecture and BitScaler [2] A Bitcoin Startup Raised $50M to Allow Users to Trade with Bitcoin-Grade Security [3] The State of BitcoinFi in Q2 2025: Research [4] Bitcoin DeFi Market in 2025: Growth, Potential, and Key ... [5] Expert Predicts New Bitcoin Layer 2 Will Kill Solana in DeFi ...

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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