Citrea Secures $2.7M Seed Funding for Bitcoin ZK-rollup Launch

Citrea, a project that aims to introduce zero-knowledge (ZK) rollups to Bitcoin, has successfully raised $2.7 million in a seed funding round led by Galaxy Ventures, the venture arm of Galaxy Digital. The funding will support Chainway Labs, the blockchain infrastructure firm behind Citrea, in bringing the project to market. Citrea claims to be the first rollup that utilizes zero-knowledge technology to enhance the capabilities of Bitcoin’s blockspace, making it feasible to build various applications on the Bitcoin network.

The seed funding round took place in 2023 and included participation from Delphi Ventures, Eric Wall (co-founder of Taproot Wizards), Igor Barinov (founder of Blockscout), and other investors. Zero-knowledge rollups, commonly associated with Ethereum and layer-2 blockchains like Polygon and zkSync, aim to improve efficiency and lower costs by bundling transactions on layer 2 and securing them with a cryptographic protocol called ZK-proofs, which verifies their occurrence on the base blockchain without revealing specific details.

Bitcoin also has its own layer-2 solutions, such as the Lightning Network for payments and scaling projects like ZKSats and Rollux, which compete with Citrea. In its blog post, Citrea stated that its ZK-rollup tackles the challenges faced by Bitcoin in handling an increasing number of transactions and supports diverse applications without making changes to its consensus rules. The project leverages Bitcoin not just as a digital currency, but also as a foundational layer for securing and settling transactions.

The Bitcoin developer community has been divided on how the blockchain should be utilized. While some advocate for maintaining its original role as a peer-to-peer electronic cash system, others have embraced projects like Ordinals, which enable the creation of non-fungible token (NFT)-like assets, and the BRC-20 standard, which allows for the creation of speculative tokens. In a recent blog post, Citrea expressed its goal of transforming Bitcoin into a base layer for a comprehensive ecosystem of blockchain games, NFTs, and decentralized finance (DeFi), all while preserving Bitcoin’s security and consensus rules.

Citrea’s solution is also built on the Ethereum Virtual Machine (EVM), which enables developers familiar with the EVM to create applications on the Bitcoin network. By incorporating the EVM into its framework, Citrea aims to attract a wide range of developers and foster innovation within the Bitcoin ecosystem.