all about cryptop referances
On Wednesday, Galoy, the firm behind El Salvador’s Bitcoin Beach Wallet, announced that the company raised $4 million in funding in an investment round led by Hivemind Ventures. That same day, the startup launched a new product called Stablesats, a stablecoin concept that leverages derivative contracts to create a bitcoin-backed synthetic dollar pegged to the US dollar. The Stacksats product allows people to trade via the Lightning Network and hedge against crypto market volatility at the same time.
Galoy, the startup behind the Bitcoin Beach Wallet, has made two announcements on August 3rd. The initial announcement shows that the company has raised $4 million from strategic investors to “advance bitcoin-native banking infrastructure.” The funding round was led by Hivemind Ventures, but recent funding came from Alphapoint, Valor Equity Partners, Timechain, El Zonte Capital, Kingsway Capital and Trammell Venture Partners. Galoy also stated that “other leading bitcoin investors” joined the funding round.
The founder of Hivemind Ventures, Max Webster, believes open source bitcoin banking is very important to strengthen the global adoption of technologies such as the Lightning Network. “Galoy dramatically lowers the barrier for any community or organization to become its own bank and connect to the world’s first open money and payment standard,” Webster explained in a press release.
The Lightning Network (LN) is a layer two (L2) protocol built on top of Bitcoin that aims to scale the payment network and allow peer-to-peer transactions with lower fees than onchain transactions. Galoy founder Nicolas Burtey wholeheartedly believes LN is the future of BTC payments. “It’s no secret that bitcoin and Lightning are disrupting traditional finance,” Burtey said during the fundraising announcement. “We see the Galoy team, contributors and customers as a community working together to build a bridge towards a more open and inclusive global financial system.”
Currently, the value locked in the LN system is about $79.60 million, or about 3,418.14 BTC. In addition to the fundraising announcement, Galoy also revealed a new product called the Stacking Kit. Galoy said in a blog post that the Stacksats product is one of the latest features added to the crypto payment platform. “An alternative to stablecoins or fiat bank integration, Stablesats uses derivative contracts to create a bitcoin-backed synthetic dollar pegged to the USD,” Galoy’s blog post said. Galoy’s announcement adds:
This enables dollar-equivalent USD accounts inside Lightning wallets, solving one of the biggest problems for people using bitcoin for daily transactions: short-term exchange rate volatility.
Burtey believes that technologies such as the Lightning Network and Stacksats will help digital transactions flourish in regions around the world. “Bitcoin has brought digital transactions to previously unbanked communities across Latin America, Africa and beyond,” Burtey said Wednesday. “However, the volatility makes it difficult to manage financial obligations. With Stackrate-enabled Lightning wallets, users can send from, receive to, and hold funds in a USD account in addition to their standard BTC account. While the dollar value of their [bitcoin] account fluctuates, $1 in their USD account remains $1 regardless of the bitcoin exchange rate.”
The Stacksats product has its own website which provides a detailed summary of what it is and how to use the technology. Galoy’s open source codebase for Stacksat and its other products can be viewed on Github. Stack rate, specifically, uses “an instrument called perpetual inverse swap to create synthetic USD” and the team notes that there are “other interesting avenues to explore.”
What do you think about Galoy raising $4 million from strategic investors? What do you think of Galoy’s Stacking Kit product? Let us know what you think about this topic in the comments section below.
Image credit: Shutterstock, Pixabay, Wiki Commons, Galoy,
Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or an endorsement or recommendation of products, services or companies. Bitcoin.com does not provide investment, tax, legal or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on content, goods or services mentioned in this article.
