The broadening scope of fintech has attracted various big companies to this domain. The latest in this regard is banking platform Galoy which has planned to launch Bitcoin-backed synthetic dollar on the Lightning Network. It will allow the users to use Lightning Network for everyday payments where there will be no exposure to short-term volatility. Galoy has vast experience in open-source banking. It operates Bitcoin Beach wallet for El Salvador. It has begun to offer the Stablesats product this Wednesday.
It will open up opportunities for other companies to look for innovative solutions. The dominant bearishness in the market has resulted in a lowered influx of capital. While these steps from firms like Galoy and other names will help revive the market. It will also bring ease to the investors who have felt insecure due to recent security breaches and the market’s volatility.
Here is a brief overview of fundraise of $4 million from Galoy and how it will bring innovation to the market.
The influx of capital to fintech for innovation
Innovation has remained one of the main aims of the crypto industry. The very first name in the industry, i.e., Bitcoin, came with the aim to bring ease and replace the traditional banking system. Now, Bitcoin Lightning Network has been working on bringing the requisite innovations.
It has worked on Stablesats, an alternative to stablecoins that integrates regular banking into Bitcoin. It will use derivatives contracts to work on a synthetic Bitcoin that will be backed by Bitcoin and pegged to the US dollar.
Galoy made some announcements on 3 August, and one of them included the raise of $4 million for its synthetic dollar project. The raised funds will help it in the advancement of Bitcoin-native banking infrastructure. Various Bitcoin leading investors joined the funding round. These included names like Hivemind Ventures, Alphapoint, Timechain, El Zonte Capital, Valor Equity Partners, etc.
The participants said that open-source banking is a critical part of decentralized finance and will help the market thrive. It will attract investors and help bolster Lightning’s innovative networks. It will lower the barrier for those participating in decentralized finance. Thus, the users, whether in the form of individuals or community, will be able to utilize it.
Galoy raising $4 million for Bitcoin-backed dollar
Lightning Network, a layer-2 network that operates on Bitcoin, allows P2P transactions with lower fees than on-chain transactions. Galoy founder Nicolas Burtey said he wholeheartedly believes LN is the future of Bitcoin payments. He said during the fundraise announcement that they are working on building a more open and inclusive world, and Galoy will serve the role of a bridge.
Bitcoin Lightning Network currently has an amount of $79.60 million in its TVL. The announcement of the new product Stablesats will add further to its value as new investors join the club. It will solve one of the biggest problems people face with cryptocurrency as it will integrate fiat currency into Bitcoin. It is not aimed at a specific region butt will bring ease across the globe.
Though the financial volatility will be a problem, Galoy has plans to manage it effectively. As the dollar’s value in comparison to Bitcoin fluctuates, the users’ credit will remain $1 despite fluctuations. Thus, the Bitcoin exchange rate will not affect the value of funds of the investors, providing a safe option.
Fintech firm Galoy has announced a fundraise of $4 million for a new project. It has plans to launch Stablesats, a new project on Bitcoin Lightning Network. It is a fiat-currency integrated coin that will not be affected by the fluctuations of Bitcoin. While it could be used for transactions across the globe. It will bring ease for Bitcoin users who face difficulties in its use for daily life uses.