Lightning Labs is developing infrastructure that will allow users to transmit money across the Bitcoin network almost instantly and at a cheap cost. According to Decrypt, the business recently acquired funds to support Taro, a protocol it developed that would allow stablecoins to be moved via Bitcoin’s Lightning Network.
Taro is the newest in a series of Lightning Labs products designed exclusively for the Lightning Network, a layer-two solution that improves the efficiency of the Bitcoin blockchain. El Salvador, which recognizes bitcoin as legal cash, as well as significant enterprises and crypto exchanges like Kraken, are presently using Bitcoin’s Lightning Network.
According to Decrypt, Valor Equity Partners led the $70 million Series B round, which included Baillie Gifford, Robinhood CEO Vlad Tenev, Goldcrest Capital, and others. The funds will be utilized to facilitate Taro-based stablecoin transactions, which will be enabled by Bitcoin’s Taproot update in November 2021. After a $2.5 million seed round in 2018, Lightning Labs raised $10 million in its Series A in September, bringing its total raised to $82.5 million, including the new cash. Lightning Labs co-founder and CEO Elizabeth Stark told TechCrunch that the firm now has less than 30 workers.
According to cryptocurrency exchange Binance, the Bitcoin layer-one network can handle around five transactions per second. Taro will let developers transfer assets on the Bitcoin Lightning Network by processing hundreds of thousands of transactions per second, far more than the Bitcoin network can handle normally, according to Stark. The new protocol, according to Stark, would enable individuals without bank accounts to send and receive money in the form of stablecoins that reflect their local fiat currency using mobile applications. Taro will offer the infrastructure and rails for stablecoin transactions, while Lightning Labs will not be releasing the stablecoins directly.
“If I were Visa, I’d be terrified, because there are a lot of individuals out there who have mobile phones but don’t need to utilize the regular system, and retailers don’t have to pay the 3% charge plus 30 cents [for a transaction].” “You may have far cheaper fees than the old system,” Stark added. Lightning Labs has already began requesting comments from the developer community on its Taro proposal, according to Stark, and hopes to integrate that feedback as the protocol evolves.