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Arch Labs, the team behind the Bitcoin BTC +2.07% -native application platform Arch, has raised $7 million in a seed funding round.

Multicoin Capital led the round in a rare Bitcoin deal for the venture capital firm. Other investors in the round included Portal Ventures, OKX Ventures, Big Brain Holdings, CMS Holdings, and Tangent, Arch said Thursday.

Arch began raising for the round in March and closed it quickly in April due to an "extraordinary" amount of investor interest, Matt Mudano, co-founder of Arch, told The Block. The round was structured as a simple agreement for future equity (SAFE) with token warrants, Mudano said, declining to comment on the valuation.

What is Arch?

Arch claims to be the first Bitcoin-native application platform, bringing "bridgeless" trading directly to the Bitcoin blockchain. Mudano emphasized that Arch is not a Bitcoin Layer 2 network like dozens of others but is a Bitcoin-native application platform.

"Most Layer 2s are designed to enhance scalability or introduce lower fee models on top of the existing blockchains via additional layers by bridging assets to a side chain where users are forced to sacrifice custody and trust assumptions," Mudano said. "Arch doesn't force takers to bridge assets to an L2 to leverage programmable Bitcoin-based assets."

"User custody is the core difference between Arch and other Bitcoin L2s," he added.

Developers can deploy applications on Arch "pretty seamlessly," according to Mudano. The ArchVM is built completely in Rust, a programming language also used by Solana and is easier to master than Bitcoin script, Mudano said. ArchVM is "largely inspired by Solana," he added.

As for users, Arch-based applications will be easy to engage with no matter which Bitcoin wallet they use, Mudano said. "There is no need to bridge assets or download special wallets to engage with applications on Arch," he said. "This drastically reduces friction and improves the user experience."

Arch launch

Several projects within the Bitcoin ecosystem have already started migrating to Arch, Mudano said, adding that more than 20 stealth-stage projects across stablecoins, decentralized exchanges, borrow/lend markets, and more, are building on Arch's devnet.

The next phase of Arch rollout is a public devnet, followed by its mainnet launch sometime in the second half of this year.

"At that time, there will be an incentivized points program to help bootstrap the ecosystem and showcase the first cohort of applications to build and launch on Bitcoin," Mudano said.

The Arch Foundation also plans to support the Bitcoin ecosystem through upcoming hackathon and grant programs.

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