On Wednesday, Galoy, the company behind the Bitcoin Beach Wallet in El Salvador, raised $4 million in an investment round led by Hivemind Ventures, the company announced. On the same day, the startup announced a new product called Stablesats. The Stablesats product allows users to trade via the Lightning Network and hedge against crypto market volatility at the same time. Stablesats products allow users to trade via the Lightning Network and simultaneously hedge against crypto market volatility.
Fintech startup Galoy raises $4 million in a funding round led by Hivemind Ventures
Galoythe startup behind the Bitcoin Beach Wallet, made two announcements on August 3. The first announcement detailed that the company had raised $4 million from strategic investors “to advance its bitcoin native banking infrastructure.” The funding round was led by Hivemind Ventures, but recent funding has come from Alphapoint, Valor Equity Partners, Timechain, El Zonte Capital, Kingsway Capital, Trammell Venture Partners. Galoy also noted that “other leading bitcoin investors” participated in the funding round.
Max Webster, founder of Hivemind Ventures, believes open source bitcoin banking is crucial to bolster global adoption of technologies like the Lightning Network. Webster explained in a press statement, “Galoy dramatically lowers the barriers for any community or organization to become its own bank and connect to the world’s first open currency and payment standard.”
The Lightning Network (LN) is a layer 2 (L2) protocol built on top of bitcoin that aims to extend the payment network and enable peer-to-peer transactions with lower fees than on-chain transactions Galoy founder Nicolas Burtey sincerely believes that LN is the future ofand BTCpayments.” It’s no secret that Bitcoin and Lightning are disrupting traditional finance.” Burtey said during the funding announcement.” We see the Galoy team, contributors, and clients as a community working together to build bridges toward a more open and inclusive global financial system.”
Galoy unveils Stablesats, a Bitcoin-backed synthetic dollar using the Lightning Network
. The value currently locked into the LN system is approximately $79.6 million, or about $34} 3,418.14 btc. In addition to the funding announcement, Galoy also revealed a new product called Stablesats; Galoy detailed in a blog post that the Stablesats product is one of the latest features to be added to the crypto payment platform.” Instead of stablecoin or fiat bank consolidation, Stablesats will use derivative contracts to create bitcoin-backed synthetic dollars pegged to U.S. dollars,” Galoy’s blog post states, adding that Galoy’s announcement will.
This creates a dollar-equivalent USD account within the Lightning Wallet, solving one of the biggest problems for people who use bitcoin for everyday transactions: short-term exchange rate fluctuations.
Burtey believes that technologies such as the Lightning Network and Stablesats will allow digital transactions to flourish in regions around the world. Bitcoin has brought digital transactions to previously unbanked regions such as Latin America and Africa,” Burtey said Wednesday. But its volatility makes it difficult to manage financial obligations, and with the Stablesats-enabled Lightning Wallet, users will be able to transfer money from, to, and hold it in a USD account in addition to their defaultBTCaccount. BTCaccount, as well as send, receive, and hold from a USD account. The dollar value of your (Bitcoin) account will fluctuate, but a dollar in your USD account will remain a dollar regardless of the Bitcoin exchange rate.”
The Stablesats product has its ownwebsitethat provides a detailed summary of what it is and how it uses the technology.Galoy’s Stablesats and other products’ open source codebase can be found at Github; Githubspecifically, Stablesats “uses a means called permanent reverse swap to create synthetic US dollars,” and the team notes that “there are other interesting avenues.”
What do you think about Galoy raising $4 million from strategic investors, and what do you think about Galoy’s Stablesats product? Please share your thoughts on this topic in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons, Galoy,