Lightning Labs raises funding to enable stablecoin transfers through Bitcoin network
Source:https://techcrunch.com/2022/04/05/lightning-labs-raises-funding-to-enable-stablecoin-transfers-through-bitcoin-network/ Lightning Labs raises funding to enable stablecoin transfers through Bitcoin network 2023-01-20 22:57:04

Lightning Labs is building infrastructure that would enable users to send money across the world almost instantaneously and at a low cost through the Bitcoin network.

The company just raised funding to support a protocol it has built called Taro, which would allow stablecoins to be transferred on Bitcoin’s Lightning Network, Decrypt first reported.

Taro is the latest of multiple products Lightning Labs has built specifically for the Lightning Network, which is a layer-two solution that makes the Bitcoin blockchain more efficient. Bitcoin’s Lightning Network is currently used by El Salvador, which recognizes the cryptocurrency as legal tender and major companies and crypto exchanges such as Kraken.

Valor Equity Partners led the $70 million Series B round with participation from Baillie Gifford, Robinhood CEO Vlad Tenev, Goldcrest Capital and others, according to Decrypt. Proceeds will be used to enable stablecoin transactions based on the Taro protocol, made possible by Bitcoin’s Taproot upgrade in November 2021.

Lightning Labs brought in $10 million from its Series A last September after its $2.5 million seed round in 2018, bringing its total raised to $82.5 million, including the fresh capital. The company has fewer than 30 employees today, Lightning Labs co-founder and CEO Elizabeth Stark told TechCrunch.

The Bitcoin layer-one network itself supports about five transactions per second, according to crypto exchange Binance. Taro will support developers transferring assets on the Bitcoin Lightning Network by executing hundreds of thousands of transactions per second, a much greater volume than what the Bitcoin network could otherwise support, Stark said.

Stark explained the significance of the new protocol, saying that it will allow individuals without bank accounts to send and receive money in the form of stablecoins that represent their domestic fiat currency through mobile applications. While Lightning Labs won’t be issuing the stablecoins directly, Taro will provide the infrastructure and rails for stablecoin transfers to take place.

“If I were Visa, I’d be scared, because there are a lot of people out there that have mobile phones, but now don’t need to tap into the traditional system, and then the merchants don’t need to pay the 3% fee plus 30 cents [for a transaction]. You can have fees that are dramatically lower than the legacy system,” Stark said.

Stark added that Lightning Labs has already begun soliciting feedback from the developer community on its proposal for Taro and plans to incorporate that feedback as it further develops the protocol.

Tech, Technology Source:https://techcrunch.com/2022/04/05/lightning-labs-raises-funding-to-enable-stablecoin-transfers-through-bitcoin-network/

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