The round, which was funded by angel investors, will provide capital for the company to implement innovative sidechain solutions on the Bitcoin network.
Layer 2 Labs has raised a $3 million seed round from angel investors to bring drivechains and other innovative technologies to Bitcoin.
Drivechains are a type of sidechain – a secondary blockchain that interacts with a primary blockchain and aims to offer a better user experience (UX). The company’s CEO and founder, Paul Sztorc, a well-known Bitcoin researcher and developer, has been working on drivechains since 2015.
Sztorc outlined the concept of drivechains in Bitcoin improvement proposals (BIPs) 300 and 301. The technology, which will be Layer 2 Labs’ primary focus, allows users to move bitcoin (BTC) back and forth between the main Bitcoin blockchain and multiple drivechains.
According to Sztorc, the purpose of drivechains is to give Bitcoiners access to innovative features and products currently confined to altcoin networks. Examples would be Zcash’s zero-knowledge proofs, a way of proving something without revealing sensitive information, and Ethereum’s Augur, a prediction market where users bid on specific outcomes.
“We believe that drivechains have the potential to kill altcoins, increase Bitcoin adoption, and provide the catalyst for hyperbitcoinization,” said the company in a release provided to CoinDesk. (Hyperbitcoinization is the point where Bitcoin becomes the world’s dominant monetary system.)
Besides Sztorc, Layer 2 Labs’ founding team includes Bitcoin Core contributor CryptAxe and 8-year Kraken veteran Austin Alexander.