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Liquid Staking Project Stroom Closes $3.5 Million in Seed Round

Stroom Network, a liquid staking project built on Bitcoin’s Lightning Network, has closed a $3.5 million seed investment round. Mission Street, Ankr’s venture arm, provided strategic support for the round, which was led by crypto-focused investment firm Greenfield. Lemniscap, No Limit Holdings, and Cogitent Ventures were among the other participants, along with a number of VC firms and angel investors. The network plans to use the money to grow its workforce and launch the Liquid Staking Token on the Ethereum mainnet.

How Stroom leverages the best of Lightning Network and Ethereum

The Lightning Network is a payment channel layer 2 solution built on top of the Bitcoin blockchain that promises faster and cheaper Bitcoin transactions. However, Lightning’s primary weakness is its limited liquidity, which can result in either the transactions being delayed or failed.

Stroom Network’s goal is to implement the mechanisms of liquid staking, allowing users to safely invest in both the Lightning Network (LN) and Ethereum with their Bitcoin holdings. When you stake tokens to a network, you’ll get a new token that represents your staked position in exchange. To govern user funds, Stroom creates DAO-like organisations with a multi-party signature computation process. This ensures trust and safety of the funds.

Stroom’s CEO, Rostyslav Shvets, said, “The recent surge to integrate deposits and withdrawals via Lightning by major exchanges like Binance and Coinbase further validates a huge potential behind it, and we intend to work closely with all of these exchanges.”

The firm believes that prudent management of liquidity will help enhance adoption, which could eventually lead to an APY of 6% that can be maintained over the long term. In Stroom’s platform, users can earn Bitcoin through routing fees by depositing Bitcoin on Lightning. At the same time, Stroom releases a wrapped Bitcoin token called lnBTC on Ethereum, which is backed by Bitcoin at a 1:1 ratio.