The United States-based startup Sparkswap has completed a successful seed funding round to create a decentralized exchange based on the Bitcoin (BTC) Lightning Network. A blog post revealed the development on Monday, April 8.
According to Sparkswap’s founder Trey Griffith, the company raised $3.5 million from investors including Initialized Capital, Pantera Capital, Foundation Capital and Y Combinator.
The startup intends to create a decentralized exchange that will be protected from hacks, while still processing transactions on blockchain.
Sparkswap started testing its mainnet on Jan. 2, 2019, which is driven by Bitcoin’s Lightning Network. Its core technology, Atomic Swap, allows users to trade across blockchains and settle the transactions instantly.
Following the seed round, the company is going to open trading to the public. In the beta stage, the transactions will be limited to the BTC/LTC trading pair while Sparkswap is testing its software.
However, Griffith told crypto media The Block that the company is considering enabling trading for other assets, namely ZCash (ZEC) and Ethereum (ETH).
Earlier this month, Radar, the startup behind decentralized exchange Radar Relay that raised $10 million last year, announced that it will soon release new Lightning Network developer tools. The solutions aim to bring new users to the crypto scalability solution, which was developed to provide nearly free and instantaneous transactions.
As Cointelegraph previously reported, blockchain development company Lightning Labs announced the initial release of the Lightning Network offramp Lightning Loop in March.