Elizabeth Stark, the CEO of Lightning Labs, has announced the creation of Taro, a new Lightning Network protocol intended to support stablecoins. Taro is the first of its kind. As part of its Series B financing, Lighting Labs raised $70 million from investors such as Valor Equity Partners and Baillie Gifford.
A Stablecoin On Bitcoin will be on a Layer 2 network
Lightning Labs’ CEO, Elizabeth Stark, really has revealed the company’s vision for a new product called Taro (Taproot Asset Representation Overlay), which will attempt to expand the number of assets available for transacting on the Lightning Network to include stablecoins. Taro is an acronym for Taproot Asset Representation Overlay, which stands for Taproot Asset Representation Overlay. Taro is a system developed by Stark, who introduced it in a Medium article on Tuesday, stating that it attempts to “Bitcoinize the dollar.”
In order to facilitate high-speed transactions on the Bitcoin blockchain, Taro is based on the Lightning Network, a Layer 2 technology that establishes payment channels between different addresses. Once a channel has been established, users are free to do business with one another until the channel has been closed, at which time the transactions are recorded on the Bitcoin blockchain and eventually resolved.
While part of the Bitcoin Improvement Proposal (BIP) process, Lightning Labs has made the technical specifications for Taro available to the community in order to solicit feedback as the protocol is developed.
Taro, according to Stark, is only feasible as a result of the Taproot update, which was released last year and provided a number of important changes to the Bitcoin system. Together, the enhancements made to Taproot have made it possible for developers to create more complicated, smart contract-driven apps on top of the Bitcoin network.
Taro’s introduction was preceded by the statement that Lightning Labs had received $70 million in a Series B fundraising round headed by Valor Equity and Beillie Gifford, as well as the announcement of Taro’s release. Other notable investors include Kingsway Capital, Goldcrest Capital, Brevan Howard, and Moore Strategic Ventures, to name just a few.
Stark has said that the monies would be utilized to further build Lightning Network as well as expand the company’s operations.