Lightning Labs – the main team behind the Lightning network announced today, that they have secured 10M in Series A funding to further develop the payments technology and scale the developer ecosystem. They also announced launch of their Lightning Loop beta service, which will allow users to move funds between the Bitcoin blockchain and the Lightning network, in a non-custodial manner.
Lightning Labs is scaling!
Announcing our $10M Series A to fuel LN development, and the Lightning Loop beta release, a product making it easier send/receive #bitcoin instantly.
With 4000 developers and 30+ startups, the next decade of Lightning is on 🔥https://t.co/3P4gVm89OV— Lightning Labs⚡️ (@lightning) February 5, 2020
What’s The Lightning Network?
Often cited as a solution to the Bitcoin’s scalability problems, the Lightning network is a Layer 2 payment protocol. It is deployed for making near instant payments and rapid settlement of high volume of transactions, by offering multiple micro-payment channels, operating independent of the main Bitcoin blockchain. However, the payments would get updated on the actual Bitcoin blockchain later, when such channels are open or closed.
Lightning Network, if adopted widely and used properly, can theoretically relieve congestion on the Bitcoin network and result in fees savings. Traditionally, every transaction has to be processed by every node on the network, a time consuming and resource intensive task. Lightning network solves this problems, by offering transactions to be processed between multiple users or parties, operating an inter-connected web of channels, who can transact between themselves in a secure and decentralized fashion, without the need for each and every node to record/update transactions on the Bitcoin blockchain immediately.
They can also process “atomic swaps” – which can enable the conversion of cryptocurrencies among each other, without using exchanges or intermediaries.
The Lightning Loop
According to the official description, “Lightning loop offers the easiest way to manage inbound and outbound liquidity on the Lightning network”
The service has two components. Loop in system allows funds to be replenished via FIAT routing channels or exchange or other services. Loop out, on the other hand, allow merchants or users to send funds outside of the Lightning network to any other source on the actual Bitcoin blockchain, by managing capacity and re-balancing routing channels.
The Lightning Loop can aid in providing liquidity, reducing fees by managing payment channels, to route funds to “on-chain” services and users, configure wait times and transaction batching and refill/offload funds from Lightning channels in a single on-chain transaction.
The Lightning Labs And Funding Participants
The principal driving force behind the Lightning network, the Lightning Labs was launched in 2016, to build second layer payment protocol on Bitcoin blockchain. Since its inception, the Lightning Labs has worked on open source and secure system to allow transactions to be sent easily and efficiently. They also offer non custodial and trusted financial services.
An exhaustive list of the participants in the Series A funding (taken from the official medium post) is present below:
- Craft Ventures
- Ribbit Capital
Angel Investors and Funds
- Ross Stevens (CEO and Founder of Stone Ridge)
- John Pfeffer (Pfeffer Capital)
- David B. Heller (former co-Head of Securities at Goldman Sachs)
- Howard Morgan (Founder of First Round Capital)
- Avichal Garg (Founder of Electric Capital)
- Proof of Capital,
- CMT Digital
- Abstract, and others.