Bitcoin (BTC) is about to celebrate its 13th year in business. The entire cryptocurrency ecosystem has been constantly innovating and evolving. The DeFi revolution and all the decentralized financial services it offers come to mind. Unfortunately, as it stands, the Bitcoin network cannot support such an ecosystem. That’s why developers are working on alternative solutions to bring DeFi to Bitcoin.
Portal: bringing DeFi to Bitcoin
Portal is a protocol that came into being in June 2020 via the publication of its whitepaper. It has a big ambition: to bring the DeFi ecosystem to the Bitcoin network.
To do this, the protocol uses a combination of solutions to create a proper DeFi ecosystem on Bitcoin. First, funds will be secured on the Bitcoin blockchain using hash time-locked contracts (HTLC), a kind of smart contract with simple functionality offered by Bitcoin.
In a second phase, DeFi services will be hosted on the third layer of the protocol, based on the Fabric technology. The latter allows the deployment of smart contracts that will manage the liquidity of the protocol, as on Ethereum.
For the moment, Portal has a decentralized exchange (DEX) evolving on its Fabric technology promising a Bitcoin-like uncensored ecosystem. What’s more, this exchange platform is cross-chain. This means that it can also be accessed from other blockchains. Exchanges are made via atomic swaps.
Portal x Polygon: the new duo of the cryptosphere
Now, the Portal teams are looking to go further and are partnering with one of the most popular Ethereum second layer solutions: Polygon (MATIC).
Portal and Polygon Partner to Bring DeFi to the Bitcoin Network
Announcement of the partnership between Portal and Polygon – Source: Twitter
This partnership will cover several parts of the Portal ecosystem.
First, Polygon will operate a liquidity node on Portal’s DEX. Second, the partnership will allow zero-knowledge swaps, i.e. private exchanges, on BTC/WBTC pairs as well as swaps from POS and WBTC to BTC.
“Given that Portal is a DeFi layer on Bitcoin, we are excited to partner with Polygon to enable WBTC/BTC and POS-WBTC to BTC exchanges. We believe that having liquid markets and enabling price discovery will allow for appropriate pricing of risk-wrapped bitcoin and allow for greater ease of use of bitcoin.”Dr. Chandra Duggirala, executive chairman of Portal
As of early September, the project had raised $8.5 million from high-profile investors. These funds are intended for the development of the decentralized exchange platform as well as the development of the interoperability of the protocol.
Polygon’s sirens never stop attracting new projects. Indeed, Portal is not the only one who wants to have a foot in the network. At the beginning of November, the protocol Enegra Group announced the migration to Polygon of the company’s shares initially tokenized on Ethereum (ETH).