Stroom, a Kyiv, Ukraine-based developer of a Bitcoin liquid staking protocol on the Lightning Network, has raised $3.5 million in seed funding. The round was led by Greenfield, with participation from Mission Street, Lemniscap, No Limit Holdings, Cogitent Ventures, and other venture capital firms and angel investors.
The company plans to use the funds to expand operations and work to release the liquid staking token on the Ethereum mainnet. Stroom is a financial protocol that allows users to earn Lightning Network revenue without locking up their BTC and maintaining their own node infrastructure. To do this, users deposit staking tokens into a DAO-controlled smart contract. The smart contract then stakes the tokens with DAO-picked staking providers. The users' deposited funds are controlled by the DAO, so the staking providers never have direct access to the users' assets.
In return for depositing their staking tokens, users receive tradable liquid tokens. These liquid tokens can be used to earn yield on other DeFi platforms, such as Compound or Aave. Stroom's liquid staking protocol is a promising way for users to earn passive income from their Bitcoin holdings without having to lock up their funds or maintain their own node infrastructure. The company's seed funding round is a strong indication of the growing interest in liquid staking protocols.
