One of the great strengths of the Ethereum network (ETH) compared to Bitcoin (BTC), in addition to smart contracts, was to be able to accommodate various sub-tokens very easily. This facility first allowed the appearance of stablecoins (often indexed on the US dollar) and then of decentralized finance (DeFi). But the developers of the Bitcoin ecosystem intend to remedy this delay by making it easier to use stablecoins on the Lightning Network (LN).
70 million raised to develop the Lightning Network
Since the very first Lightning Network trials in 2017, first conducted on the Litecoin blockchain network (LTC), this second layer (layer 2) solution for Bitcoin has continued to grow. Although this growth is not perceived as fast enough by some.
Lightning Labs, one of the main developers of the Lightning Network, wants to accelerate the adoption of this Bitcoin-backed network. As reported by The Block, Lightning Labs has just revealed that it has successfully completed a Series B funding round, raising $70 million.
This new investment round (after a first one of $10 million in February 2020) was led by Valor Equity Partners and Baillie Gifford. This funding also saw the participation of well-known names in the cryptosphere, such as the NYDIG group, Alan Lane the CEO of Silvergate and Vlad Tenev the CEO of Robinhood.
Taro protocol to boost stablecoin trading via Bitcoin
Another big news announced at the same time by Lightning Labs is the launch of its Taro protocol. The latter aims to enable easy use of stablecoins in applications present on the LN network.
With the Taro protocol, and beyond the mere speculation of DeFi, the ultimate goal is to promote and facilitate everyday payments:
“With [our module for the network] Lightning, you are routing through bitcoin. (…) You’re literally converting [stablecoins from] dollars to bitcoins and back to [stablecoins from] dollars. (…) [Lightning Labs] wants to bring Bitcoin to billions of people.”Block Elizabeth Stark, co-founder and CEO of Lightning Labs
These advances in the use of stablecoins on Bitcoin’s Lightning network are enabled in part by the Taproot update, which became operational in November 2021. Among other improvements, this soft fork of Bitcoin’s code improves the confidentiality, as well as the security, of transactions on the blockchain network invented by Satoshi Nakamoto.