Bitcoin developer Lightning Labs said Tuesday (April 5) it has raised $70 million in a Series B funding round, while also launching Taro, a protocol designed to expand the worldwide reach of bitcoin and Lightning by turning it into a multi-asset network that brings stablecoin to bitcoin.
“Taro helps bitcoin in numerous ways, including onboarding people to bitcoin through fiat where they can easily swap between assets,” Lightning Labs Founder and CEO Elizabeth Stark wrote on the company’s Medium page.
This is especially useful in times of high inflation, as people around the world see their currencies losing value. In these situations, Taro can help facilitate fiat to bitcoin rails.
“Further, as Taro uses bitcoin liquidity to route assets issued on the protocol, there will be greater demand for bitcoin on the Lightning Network,” Stark wrote. “As a result, bitcoin will route dollars, fiat, and everything in between. This is how we bitcoinize the dollar.”
Assets such as stablecoins will route through the bitcoin monetary network using Lightning, a new protocol that fixes bitcoin as the “internet’s native digital money and protocol for value transfer,” Stark said.
Writing on the Lightning Labs website, Business Development Lead Ryan Gentry said Taro uses Taproot, the most recent bitcoin upgrade, for “a new tree structure that allows developers to embed arbitrary asset metadata within an existing output” and Schnorr signatures for “improved simplicity and scalability.”
Speaking to PYMNTS last year, BitPay CEO Stephen Pair called Taproot a game-changer, saying it would inspire more people — especially developers — to capitalize on features and capabilities that have always been there but have stayed untapped.
Gentry adds that Lightning Labs finds itself in need of more assets following “an explosion of growth” last year, with a host of new users in Latin America and West Africa using its service for the first time. Gentry said the company has “continually heard from people, developers, and startups in emerging markets” that adding stablecoin assets to Lightning would provide greater financial access for their communities.