Arch Labs Raises $13M to Bring Native Smart Contracts to Bitcoin

Bitcoin DeFi developer Arch Labs has secured $13 million in funding to advance its efforts toward enabling smart-contract capabilities on the Bitcoin blockchain. The funding round, which values the company at $200 million, was led by Pantera Capital, signaling continued investor interest in expanding Bitcoin’s utility beyond its traditional use case as a store of value.

The company’s central innovation, dubbed ArchVM, is designed to allow developers to build decentralized applications and protocols natively on Bitcoin. According to Arch Labs, the new virtual machine will handle off-chain computations to enable Turing-complete smart contracts directly on Bitcoin’s base layer. This would eliminate the need for external scaling solutions and offer Solana-like transaction speeds while maintaining Bitcoin’s security infrastructure.

The push to introduce smart contract functionality to Bitcoin gained traction last year with the introduction of BitVM, a computing model that offers the theoretical foundation for smart contracts on the network. Since then, several projects have been experimenting with BitVM-based designs, mostly focused on layer-2 implementations and bridge solutions that shift activity off the main chain.

However, Arch Labs is taking a different approach by attempting to bring this functionality directly to Bitcoin’s core layer, without relying on asset bridges that are often seen as points of vulnerability.

“We’re trying to keep everything natively on Bitcoin,” an Arch Labs spokesperson said. “Avoiding bridges removes a whole category of potential exploits.”

ArchVM aims to provide developers with the tools to deploy decentralized finance products and services directly within the Bitcoin ecosystem. By processing complex logic off-chain and verifying it on-chain, the system promises the computational power of smart contracts without compromising the chain’s performance or security.

While Ethereum and Solana have long dominated the smart contract landscape, equipping Bitcoin with similar capabilities has sparked interest among developers and investors. Still, there are significant technical and philosophical hurdles to overcome.

Bitcoin’s conservative development culture and emphasis on security and decentralization have traditionally made rapid innovation a challenge. Arch Labs’ attempt to balance those concerns while introducing programmability could mark a pivotal shift in how Bitcoin is utilized in the broader blockchain ecosystem.

With funding now in place and development underway, all eyes will be on how effectively Arch Labs can implement its vision—and whether Bitcoin’s core user base is ready for a new chapter in its evolution.

Editorial Note: This news article has been written with assistance from AI. Edited & fact-checked by the Editorial Team.

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