Galoy’s synthetic dollar will run on top of the Lightning network, backed with BTC.
The project raised USD 4 million for the development of a banking infrastructure.
The company that developed the Bitcoin Beach wallet in El Salvador intends to create a market denominated in synthetic US dollars, backed by bitcoin (BTC). To achieve this, Galoy raised USD 4 million, with which they intend to strengthen their own infrastructure.
According to a release released today, the company would be ready to operate GaloyMoney, an open source banking platform based on bitcoin. The goal is to develop a native Bitcoin market through the Lightning network.
This is due to the fact that Bitcoin is the most secure and valuable network of money today, but it works as a settlement network (more secure, but slow). The Lightning network uses payment channels to exchange BTC, and now stablecoins, with a system that favors the fast and cheap exchange of value.
The project incorporates several productswhich include a browser-based wallet that can be used on any device, a point-of-sale app, an exchange, and integration with various applications, bitcoin ATMs, and hardware devices.
The most prominent integration of this ad is the creation of a synthetic currency backed by bitcoin, through a wallet designed specifically for the Lightning network. Galoy calls this currency stablesats, perhaps to differentiate them from stablecoins on other networks.
Galoy stablesats will have a 1:1 parity with the US dollar, at least in terms of its market value. According to the company, these coins “fulfill the same high-demand function that stablecoins are predominantly used for, but without introducing new assets or tokens. Stablesats are just sats, but tamed to behave like a dollar.” In other words, everything the market would revolve around Bitcoin and it would not be necessary to resort to networks such as Ethereum or another.
The key to this development seems to be the preference of cryptocurrency users in developing countries for an asset type that is as safe as bitcoin but less volatile.
This proposal is possible, now, thanks to developments such as Taro, which allows the creation of coins anchored to bitcoin through the Lightning network, as we reported in CriptoNoticias at the beginning of the year.