Squid secures $4m to fuel competition in one-click transfers between blockchains

DeFi’s $57 billion market is spread across blockchains requiring bridges, routers, and other forms of middleware for cryptocurrency and NFT flow throughout these unconnected networks.

Bridges enable users to send crypto across blockchains while routers aggregate bridges and decentralised exchanges into a single application to make the process much easier. Cryptocurrency worth about $6.7 billion has moved across blockchains thanks to these bridges and routers in the past month, DefiLlama data shows.

Squid, one of those crypto routers that launched last year, has raised an additional funding of $4 million from investors led by Polychain Capital to command a larger share of the market.

“We anticipate expanding to Bitcoin soon and other major ecosystems throughout the year, and we’ll be integrating additional interoperability service providers in order to accomplish that,” Christina Rüd, Squid Router co-founder, told DL News.

Interacting with different blockchains — what the industry calls interoperability — requires these middleware protocols, but they can also be clunky for users. The process often involves long wait times and multiple clicks to approve transactions. Sometimes, funds can get stuck during the chain-hopping process, a problem that can be difficult to solve.

Squid’s trying to make things a little easier with just one-click transfers that take less than 20 seconds.

“The one-click user experience is essential,” Christina Rüd, Squid Router co-founder, told DL News. “You don’t see Web2 apps make users click multiple times to accomplish a single action, and they’re definitely not making users wait minutes or hours for things to happen.”

But Squid Router is competing in a fierce market not alone in offering this single-click feature. Bridges like Celer Network and decentralised exchanges like Rubic and Universal Swap also have similar one-click cross-chain transaction capabilities.Celer is perhaps the most well-known of the lot with the protocol processing over $165 million in cross-chain transactions in the last month.

Need for speed — and security

For DeFi middleware, speed is paramount. People seek to quickly move around assets, capturing arbitrage opportunities as they arise, making the option of one-click transactions highly attractive.

While quick transfers are key for moving digital money between different networks, keeping those transfers safe is just as important.

After all, DeFi middleware protocols remain a top target for hackers. In 2022, hackers stole over $2 billion in several cross-chain bridge attacks. Heco Bridge, another victim of these hacks, lost $86 million in 2023, as well as Multichain which saw $125 million disappear from its cross-chain bridge.

Bridge hackers even signed off last year by stealing $81 million from the Orbit Bridge.

When asked whether one-click poses a security trade-off for users, Rüd only highlighted that Squid is built on top of Axelar, a cross-chain bridge protocol for DeFi.

Unlike many bridges and routers, Axelar held up well during the UST collapse in 2022, and so it has been widely associated with stability. But LlamaRisk, a crypto risk assessment group, said in an April 2023 report that although “technical security risk appears to be well-managed,” the protocol currently operates on an upgradable smart contract controlled by eight signers.

Since its launch, Squid says it has facilitated over $890 million in crypto bridge volume across more than 60 blockchains. The protocol ranks 14th on DefiLlama’s log of crypto bridges based on 24-hour transaction volume.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. To share tips or information about stories, please contact him at osato@dlnews.com.