• Layer 2 Labs is launching with the goal of scaling and building out drivechains for the Bitcoin Network.
• The company has closed a seed round at launch, raising $3 million in funding.
• Drivechains define a specific way through which to create Bitcoin sidechains, which enable BTC to “flow” between the two networks in a two-way peg.
Layer 2 Labs is a company that has recently launched with the goal of scaling and building out drivechains for the Bitcoin Network. The company is backed by a seed round of funding, raising a total of $3 million. These funds will be used to develop the drivechain technology, which is a specific way through which to create Bitcoin sidechains.
The purpose of sidechains is to enable Bitcoin (BTC) to “flow” between the two networks in a two-way peg. This means that Bitcoin can’t actually leave the Bitcoin network, so sidechains are used to accomplish this task. To do this, BTC is locked up on the Bitcoin blockchain and represented in different ways in the sidechain. The goal of this process is to ensure that the representation of BTC in the sidechain maintains a 1:1 peg to the actual BTC locked on the Bitcoin network.
Liquid is currently the most popular sidechain in the Bitcoin ecosystem. Blockstream’s model leverages a federation to handle the on-chain lock-up and withdrawals, as well as sidechain block creations. Drivechains, however, aim to move away from the federated model in favor of something that is more decentralized –– Bitcoin’s own miners. Under the drivechain model, Bitcoin miners are responsible for creating blocks in the sidechain, which allows users to move BTC back and forth without having to trust a third-party.
Layer 2 Labs believes that drivechains have the potential to revolutionize the way we use Bitcoin by enabling greater scalability, extensibility, privacy, and flexibility on the network. The company believes that drivechains have the potential to kill altcoins, increase Bitcoin adoption, and provide the catalyst for hyperbitcoinization.
The team at Layer 2 Labs is determined to make everyone in the world a Bitcoin user and believes that drivechains are the way to make this happen. They are committed to pushing the drivechain technology forward and are confident that it will bring great benefits to the Bitcoin network.