Interlay: UK blockchain interoperability startup raises $3M and gets Cosmos grant


Interlay, an interoperability startup focusing on investing, earning and paying with BTC on any blockchain, recently announced its seed capital raise of $3.04 million.

The seed funding round was led by IOSG Ventures, and co-investors including Blockchain.com, Launchub Ventures, CMS Holdings, KR1, Hypersphere, Zeeprime, and angels (Blockchain.com CEO & ex-Bitmain leadership) as other major participants.

This equity financing raise was to accelerate the company’s growth to other blockchains beyond Polkadot, put the company on track of team expansion, and meet strong demand on developing v2 of the bridge technology powering interBTC.

“We are extremely pleased to have the support of top investors from various ecosystems and geographic locations, who believe in our mission to bring Bitcoin to all major blockchains such as Polkadot, Ethereum and Cosmos,” said Alexei Zamyatin, Founder and CEO of Interlay. “Together, we will accelerate the development and adoption of interBTC, Interlay’s flagship product, and allow people to invest, earn and pay with BTC on any blockchain in a truly trustless and decentralized way.”

After a few years of academic research on Bitcoin interoperability, Alexei Zamyatin and Dominik Harz, the first two PhDs of Imperial College’s cryptocurrency lab and co-founders of Interlay, created XCLAIM, the first trustless protocol for cross-chain ‘wrapped’ assets.

Development started on Polkadot – chosen as the most promising multi-chain project that envisioned a truly decentralized bridge to BTC. In 2020 Interlay built the interBTC (former PolkaBTC) parachain, supported by Web3 Foundation grants and in collaboration with Parity Technologies. interBTC solves challenges related to capital efficiency and decentralization, which other wrapped Bitcoin attempts had failed to crack:

  • Integration of staking derivatives for capital efficiency,
  • Trustless, multi-collateral stake delegation for more decentralization,
  • MakerDAO-style multi-collateral balancing for peg stability,
  • On-chain ECDSA key derivation for better Vault security…

The result – interBTC is resilient against price fluctuations; vaults will be earning competitive APY, and anyone can become a Vault, anytime.

“Robust and decentralized infrastructure is a key enabler for a vibrant multi-chain ecosystem. We are very excited to be working with this outstanding team combining the scientific rigour and entrepreneurial spirit,” said Xinshu Dong, Partner of IOSG Ventures. ‘Connecting Polkadot and Bitcoin securely and efficiently is the first strategic move for Interlay, and we’re looking forward to a lot of solutions and applications that’d be unlocked by the potential of Interlay’s technology.”

— Press release