Blockchain start-up Lightning Labs unveiled the Taro protocol, a technology that will route fiat-pegged stablecoins and other digital assets through the bitcoin monetary network. While the project is still in the development phase, the startup claimed that this would enable the seamless transfer of U.S. digital dollars around the world without a bank in a cost-effective way.
According to sources, Taro uses Lightning, a payments platform built on top of bitcoin’s base layer that boasts of providing global, high volume, virtually instantaneous, and low-fee transactions using the security of the bitcoin blockchain. Speaking on its use case, CEO Elizabeth Stark of the start-up Lightning Labs in an interview said,
It’s one of those things where people don’t really know how the credit card system works and it just works. Typically, this ‘layer two’ payments platform is all about making bitcoin easier to spend and receive but Lightning Labs has decided to extend the use case of this tech to other types of virtual cash. People will be able to seamlessly go between bitcoin and say, a USD stablecoin, or peso, euro, yen, etc. And they can send those globally, instantly, and with extremely low fees.
Taro’s Modus Operandi
Taro’s Bitcoin payment functionality would act as a hybrid of the SWIFT financial messaging system [the communication layer] and correspondent banking [routing component]. Usually, all nodes agree to confirm a transaction on the bitcoin network, verifying every transaction on the blockchain making the whole process much slower and more expensive.
Lightning Network, on the other hand, has nodes that verify those transactions with which they are directly interacting. That difference is key according to Stark who then went on to add that Lightning enables the execution of several thousand transactions per second.
The start-up will release tech spec for feedback
That said, Lightning Labs is doubling down on the Taro protocol which it claims would leverage Taproot and the Lightning Network to bring more scalability and assets to Bitcoin.
The crypto start-up also announced securing $70 million in Series B funding spearheaded by early Tesla and SpaceX backer Valor Equity Partners revealed that it is releasing the technical specifications for the Taro protocol so that it can receive feedback from developers while it continues to build the protocol.
