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Lightning Labs Raises USD 70 mln to bring stablecoins to Bitcoin

Thursday 7 April 2022 11:26 CET | News

Lightning Labs has raised USD 70 million in Series B funding and has introduced Taro, an open-source protocol meant to bring assets such as stablecoins to the Bitcoin blockchain, CoinDesk reports.

Bitcoin is getting a boost by way of a new Taproot-enabled protocol known as Taproot Asset Representation Overlay, or Taro. In addition to Taro, Lightning Labs also announced the USD 70 million investment led by Valor Equity Partners and joined by global asset manager Baillie Gifford.

Stark said Taro improves Bitcoin’s functionality and is possible because of Taproot, an upgrade that was activated in 2020. Taproot featured three upgrades: Schnorr signatures, Tapscript, and Merkelized Abstract Syntax Trees (MAST). Taproot reportedly provides efficiency, privacy, and flexibility gains to Bitcoin, but only if it is built into tools for users by developers. Taro represents what might become possible when Taproot is put to work.

Lightning Labs describes Taro as an asset overlay network on Bitcoin. The security of Taro is based on embedded consensus, which means that transactions on Taro include Bitcoin data that needs to be verified on the Bitcoin blockchain.

Most importantly, Lightning Labs released the technical specifications for Taro as a Bitcoin Improvement Proposal (BIP) so that the protocol can be built with feedback from the broader developer community.

While Taro might become available first on lnd, Lightning Labs’ implementation of Lightning Network (LN), its status as an open-source protocol will allow other popular LN implementations, like ACINQ’s eclair or Blockstream’s Core Lightning, to use Taro. A critical distinction between Taro and other stablecoins, like UST on Terra, is that Taro is only the infrastructure to enable the movement of assets over Lightning, be they stablecoins or some other asset. Taro is not a stablecoin, collateralised, algorithmic, or otherwise, it is simply infrastructure to enable the movement of assets. Developers still need to build projects using Taro, CoinDesk states.

When asked about the $70 million Series B announced in conjunction with Taro, Lightning Lab’s CEO said the combined approach was intentional. The funds will be used to bolster Lightning Lab’s runway flexibility and act as fuel to grow the company. In addition to Valor Equity and Baillie Gifford, Goldcrest Capital, Kingsway, Moore Strategic Ventures, Brevan Howard, Robinhood CEO Vlad Tenev, NYDIG, and Silvergate CEO Alan Lane participated in the funding round.


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Keywords: investment, product launch, blockchain, stablecoin, Bitcoin
Categories: DeFi & Crypto & Web3
Companies: Lightning Labs
Countries: World
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DeFi & Crypto & Web3

Lightning Labs

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