Lightning Labs’ CEO, Elizabeth Stark, has announced the launch of Taro, a new Lightning Network protocol suited for stablecoins.
In addition, Valor Equity Partners and Baillie Gifford led a $70 million Series B fundraising round for Lighting Labs.
Stable Protocol on Bitcoin
CEO Elizabeth Stark of Lightning Labs has announced the company’s concept for a new product, named Taro (Taproot Asset Representation Overlay). It would aim to add stablecoins to the list of assets that can transact on the Lightning Network. Stark announced the system in a Medium essay on Tuesday, adding that Taro’s mission is to Bitcoinize the dollar.
Taro is a Layer 2 protocol based on the Lightning Network. It creates payment channels between addresses on the Bitcoin blockchain, allowing for lightning-fast transactions. Users can freely transact with each other once a channel launches until it is terminated. The transactions settle on the Bitcoin blockchain at this stage.
Taro’s technical specifications have publicized as part of a Bitcoin Improvement Proposal (BIP). This is to get feedback from the community as the protocol is developed
Taro is only conceivable because of the Taproot improvement, according to Stark. It introduced last year and included several substantial changes to the Bitcoin system.
On top of the Bitcoin blockchain, developers may now build more complex, smart contract-driven applications. Thanks to Taproot’s improvements, this is now possible.
Lightning Labs also announced a $70 million Series B funding round led by Valor Equity and Beillie Gifford. Other significant investors in the company include Kingsway, Goldcrest Capital, Brevan Howard, and Moore Strategic Ventures.
The funds will put to good use, according to Stark, in boosting Lightning Network’s development and expansion.
Fostering Crypto in Developing Nations
Taro’s introduction, according to Lightning Labs CEO and Co-Founder Elizabeth Stark, will aid in increasing Bitcoin acceptance in developing countries. This is because folks without bank accounts will be able to send and receive money in the form of stablecoins. Through mobile applications, these suppose to preserve their value in respect to other currencies such as the Mexican peso or the US dollar.
El Salvador is the first country to use Bitcoin’s Lightning Network. To name a few, there’s Bitcoin payments business Strike, Twitter’s tipping tool, and the Kraken bitcoin exchange. Anyone desiring to send stablecoins will be able to do so promptly and securely using the Lightning Network.
Stablecoin regulation is looming large in the backdrop, prompting the announcement. Last month, President Biden signed an executive order instructing the US federal government to investigate cryptocurrencies.
As a result of its findings, it will publish a report on the future of money and payment systems. Last Monday, two US congressman introduced legislation requiring stablecoins to back by US dollars as well as government-issued derivative contracts.