- Lightning Labs has completed a $70M Series B funding round to support stablecoin transfers via Bitcoin’s Lightning Network.
- The services will be enabled by the proposed Taro protocol and Bitcoin’s Taproot Upgrade.
Bitcoin software firm Lightning Labs has just raised funding to support fast and affordable money transfers across the world through the Lightning Network. More specifically, the proceeds will be used to support a protocol known as Taro which enables stablecoin transfers on Bitcoin’s layer-two network.
Valor Equity Partners led the $70 million Series B round, with participation from Baillie Gifford, Robinhood CEO Vlad Tenev, Goldcrest Capital, and several others. Previously, Lightning Labs raised $10 million in its September Series A round. The latest round brings the total funds raised to $82.5 million, including the $2.5 million acquired in 2018’s seed round.
Lightning Labs enables Stablecoin transfers
Of note, the Taro protocol is powered by Bitcoin’s Taproot upgrade that went live in November last year. The upgrade improves transaction efficiency and privacy, and unlocks smart contracts for the Bitcoin network, thereby eliminating third parties. Taro now adds to the list of products that Lightning Labs has built for the Lightning Network.
Additionally, the development paves way for further adoption of Bitcoin, which has already been catapulted by the development of the Lightning Network. For instance, El Salvador, which made history as the first nation to make Bitcoin its legal tender, extensively utilizes the Lightning Network. The layer-2 solution is also utilized by payments platform Strike and Twitter’s tipping feature.
According to Binance, Bitcoin’s layer-one network supports about five transactions per second (TPS). With Taro, the Lightning Network will be able to support hundreds of thousands of TPS, according to Lightning Labs CEO and co-founder, Elizabeth Stark. Additionally, the new protocol gives the unbanked access to stablecoin remittance services through mobile applications. Stark adds that Taro increases the potential for “all the world‘s currencies to route through Bitcoin over the Lightning Network.”
Notably, Lightning Labs will not become a stablecoin issuer – it will only provide the infrastructure for smooth stablecoin transfers.
“If I Were Visa, I’d Be Scared…”
Stark is confident in the project, saying its competitive features will likely put traditional financial firms out of business.
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.
Presently, Lightning Labs is gathering developer feedback on Taro to inform future developments on the protocol.
Despite having received massive resistance from global regulators, stablecoins are beginning to gain approval from certain economies. The UK’s Economic and Finance Ministry, for one, plans to adjust its regulatory framework to reflect stablecoins as a legal means of payment.
Read More: U.K. prepares roadmap to become a global crypto hub, will mint its NFT this summer
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