Portal raises $34M for atomic swaps while DEX is still in testnet

Portal, a Bitcoin-focused DeFi project, recently announced its successful $34 million seed funding round. At time of writing, this represents the second-largest funding round in the Web3 space for the year 2024. This follows an earlier fundraising effort in September 2021, where Portal secured $8.5 million.

Then, as now, Portal’s raise announcement focuses heavily on the platform’s creation of a decentralized exchange (DEX) to allow atomic swaps that don’t rely on trusted intermediaries to move assets between chains.

But after more than two years and $42.5 million in funding, Portal’s DEX is still in testnet.

Following the announcement of this most recent fundraise, Portal community members expressed frustration at the project’s slow development on Portal’s Telegram channel. Some invested in Portal through retail investment platform Republic and wanted to know when they could see returns. An administrator in Telegram said investors would receive equity following launch.

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In an interview, Portal co-founder and CEO Chandra Duggirala acknowledged “things did take longer than we expected, which is true of all difficult engineering problems.”

Duggirala said Portal is currently undergoing audits, testing its platform and setting up its validator network. Portal expects its platform to be mainnet ready by Q2, Duggirala said.

The Portal DEX and Portal wallet are both listed as coming soon on Portal’s website. The startup has published some documentation regarding how the Portal DEX will execute swaps alongside some code repositories on GitHub.

Atomic swaps allow users to directly exchange assets between different blockchains, using cryptographic hash functions for secure transactions. This technology reduces the need for intermediaries, like wrapped assets or third-party bridges, making trading more straightforward and potentially safer.

Duggirala emphasized the importance of atomic swaps, especially considering the security breaches that have affected custodial platforms, where users’ funds are held by a third party.

Portal reported participation in its seed round from notable backers, including Coinbase Ventures, OKX Ventures, Gate.io and Arrington Capital.

When asked about how Portal secured an additional $34 million in funding despite its DEX still being in the works, Duggirala said investors are taking the long view.

“This is a long-term project and all of the investors understood then…that these things take time,” Duggirala said.

In an email, Arrington confirmed its investment.

“Our take is that Portal is tackling a very large problem, and building a bridgeless and custodian-less cross chain solution is not easy. We are really excited by what the team has built over the past couple years and what is soon to come,” a spokesperson wrote.

A spokesperson for Portal did not immediately return a request for further comment on when Portal opened and closed its seed round.

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