Bitcoin Embraces Zero-Knowledge Rollups: Citrea Raises $2.7M in Seed Funding

Zero-knowledge rollups, a technology typically associated with scaling the Ethereum blockchain, are now making their way to Bitcoin. Chainway Labs recently announced that they are developing what they claim will be the first zero-knowledge rollup for Bitcoin, called Citrea. The company revealed that they had successfully raised $2.7 million in a seed fundraising round led by Galaxy Ventures, with participation from other investors such as Delphi Ventures, Eric Wall, and Anurag Arjun.

Traditionally, Bitcoin developers have focused on maintaining the simplicity of the network to avoid complicating the core use case of peer-to-peer transactions. However, recent advancements such as BitVM and Ordinals inscriptions have paved the way for layer 2 platforms to expand the use cases of the Bitcoin blockchain to include NFTs and programmable smart contracts.

With Citrea, Chainway Labs aims to enable Bitcoin to support decentralized finance (DeFi), NFTs, and other functionalities that were previously exclusive to smart contract-based blockchains like Ethereum. Citrea utilizes zero-knowledge technology to enhance the capabilities of Bitcoin blockspace, ensuring that every transaction is securely verified using zero-knowledge proofs and optimistically verified on the Bitcoin blockchain.

Zero-knowledge cryptography enables fast, private, and secure data transfer between parties, and it has been instrumental in scaling the Ethereum blockchain through rollups. Rollups are layer 2 networks that process transactions off-chain and settle them on the main chain, resulting in improved transaction speeds and lower fees for users.

Citrea’s zero-knowledge rollup will be based on the Ethereum virtual machine (EVM), allowing developers to easily port over applications built for Ethereum and other compatible networks. Chainway Labs co-founder Orkun Mahir Kılıç expressed confidence in Citrea’s potential, stating that it will bring decentralized finance to the secure, battle-tested, and decentralized Bitcoin blockchain.

Although Citrea has not yet been launched, Kılıç mentioned that his team plans to release a test network in the next quarter. The development of Citrea represents a significant step towards expanding the capabilities of the Bitcoin blockchain and making it more versatile for a wide range of use cases beyond traditional transactions.