Bitcoin Development Company Layer 2 Labs Raises $3M to Bring Drivechains to Network

The round, which was funded by angel investors, will provide capital for the company to implement innovative sidechain systems on the Bitcoin network.

AccessTimeIconDec 20, 2022 at 12:00 p.m. UTC
Updated Dec 20, 2022 at 5:09 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

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.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.

Frederick  Munawa

Frederick Munawa was a Technology Reporter for Coindesk. He covered blockchain protocols with a specific focus on bitcoin and bitcoin-adjacent networks.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.