Portal, a financial technology startup building a bitcoin-based cross-chain decentralized exchange and wallet, today launched with $34 million from a seed funding round to build out its cryptocurrency products and services.

According to the company’s announcement, investors participating in the round included notable crypto venture capital firms such as Coinbase Ventures, Arrington Capital, OKX Ventures and Gate.io. The seed funding round brings the total raised by the company to $42.5 million, which includes an $8.5 million angel round that closed in 2021.

Portal provides two flagship products: Portal DEX, a bitcoin-based exchange enabled by layer 2 blockchain “atomic swaps” of cryptocurrencies across blockchains to increase security, and Portal Wallet, a non-custodial tool that uses Portal DEX to allow users to hold, receive, store and send crypto across blockchains. An atomic swap allows for a single event rather than a series or multistep process when moving crypto between blockchains.

Crypto investors often “swap” their crypto to diversify their holdings and reduce exposure to risk or to move their tokens from one blockchain to another because one blockchain may have a different transaction fee or speed. These swaps are often facilitated by decentralized exchanges or services that use specialized systems such as bridges and wrappers to enable them, but the more layers of technology are stacked onto the process, the more vulnerable the networks become.

The company has emerged during a time when exchanges, both centralized and decentralized, have become major targets for fraud and hackers, especially those that use cross-chain bridges to transfer funds. In the past two years, there has been more than $2.5 billion stolen from bridges alone by hackers. Prominent examples include $570 million taken from Binance Holding Ltd.’s cryptocurrency exchange cross-chain bridge and $321 million stolen from Wormhole’s token bridge.

“Bridges, centralized exchanges and other custodial solutions that enable cross-chain exchange have been vulnerable and insecure for as long as they have existed,” said Chandra Duggirala, co-founder and chief executive of Portal. “From the very early days of Mt. Gox to FTX, centralized exchanges have been a persistent source of risk to user funds. Now, the risk remains, but it has taken a new form in bridges and other custodial cross-chain solutions.”

Duggirala said that Portal intends to resolve this issue with a solution that provides a capability that will eschew dangerous intermediates for peer-to-peer swaps between different blockchains such as wrappers, bridges, centralized exchanges and multi-hop decentralized exchanges. With Portal’s atomic swap capability, he explained, bitcoin tokens can be exchanged between different blockchains in seconds, without passing through any additional hands and users never give up custody of their tokens.

“Portal is rapidly pushing ahead the Bitcoin ecosystem by enabling fast and low-cost economic activity without being beholden to third parties,” said Michael Arrington, founder and partner of Arrington Capital. “As one of the largest asset classes, bitcoin will be more accessible and secure for individuals thanks to Portal’s unique approach to access, security and products.”

With the new funding, Portal intends to begin launching products in the coming months that were previously available only to large institutions and hedge funds. These include an artificial intelligence-powered co-pilot investment applications for maximizing trading strategies and an application programming interface for building tools that integrate Portal DEX cross-chain swaps into existing crypto wallets.

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