Sparkswap raises $3.5 million to build a crypto exchange on Bitcoin Lightning Network

2019 saw multiple attacks on crypto exchanges, many of which resulted in the loss of millions. In a bid to check such cases, Sparkswap, is planning to launch a cryptocurrency exchange using the features of the Bitcoin Lightning Network.

Terry Griffith, Founder of Sparkswap, was recently successful in acquiring $3.5 million in solid funding from institutional players like Pantera Capital, Initialized Capital, and Foundation Capital. Griffith stated,

“They’re just frustrated by the fact that it takes weeks to pull their money out. By building Sparkswap on Lightning Network Atomic Swaps, we can get performance and currencies needed to build liquid markets without giving up control of your assets.”

At the moment, the cryptocurrency exchange only supports BTC-LTC trading pairs, with the company also planning to enable the addition of assets like ZCash and Ethereum [ETH]. The company also gave a detailed breakdown of how users can make use of Sparkswap’s features,

“A market maker first downloads and runs Sparkswap’s software
The maker then deposits litecoin or bitcoin into their respective wallets and connects to an order-book system managed by Sparkswap
The maker broadcasts their order to Sparkswap
Sparkswap connects the maker’s order to a market taker who wants to fill that order
Both traders execute their trades using Atomic Swaps”

Sparkswap also admitted that the firm’s initial targets are semi-professional to professional traders who have a keen interest in making their own custom trading software.

Although the Lightning Network has drawn a lot of positive attention over the months, it still has its critics. Peter R Rizun, the Chief Scientist of Bitcoin Unlimited, had recently claimed that users on the LN can lose all their assets, for no fault of their own. He tweeted,

“A Lightning user can lose all of their money through no fault of their own, in an environment with high and volatile L1 fees. BTC’s block size limit ensures high and volatile fees whenever demand for block space spikes.”

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