Navigating the DeFi Ecosystem: How Stroom Network Bridges the Gap

Navigating the DeFi Ecosystem: How Stroom Network Bridges the Gap

Stroom Network acts as a bridge connecting the Lightning Network and EVM-compatible blockchains such as Ethereum.

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4 min read

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In the world of decentralized finance (DeFi), innovation is the guiding light. In this dynamic landscape, Stroom Network emerges as a bridge connecting the realms of the Lightning Network — a Layer 2 solution running on top of Bitcoin — and EVM-compatible blockchains such as Ethereum. 

This article unravels the core of Stroom, exploring its roots, purpose, and vision that position it at the heart of crypto convergence.

Stroom's Genesis

Founded on the premise of simplifying the complexities of Bitcoin's integration into the Lightning Network, Stroom Network aims not only to revolutionize the technical intricacies associated with cross-chain interactions but also to create innovative global payment solutions. Additionally, we seek to set a new industry standard for openness and transparency.

Our mission is ambitious yet straightforward: to seamlessly blend the Lightning Network with EVM-compatible blockchains, starting with the juggernaut that is Ethereum, the world’s second-largest cryptocurrency by market cap. 

Stroom is built by a team of visionaries, led by our Founder and Core Builder, Rostyslav Shvets. With seven years of experience in the crypto space, Rostyslav's journey from early Lightning Network researcher and Product Manager at Lido Finance to the helm of Stroom exemplifies his deep understanding and commitment to DeFi. 

Alongside him, Slava Zhygulin, our Chief Technology Officer and co-founder, brings his pioneering expertise in the Lightning Network, while Viktor Ihnatiuk, our our Advisor in  Business Development and Partnerships and the founder of blockchain development company Boosty Labs, infuses his entrepreneurial spirit and business acumen into Stroom’s operations.

What we are building

Stroom Network is a Bitcoin liquid staking mechanism that enables users to gain routing fees via the Lightning Network by staking their BTC. This approach introduces a range of DeFi functionalities, featuring a standout offering: the opportunity to earn yield on Bitcoin based on its use as a method of payment.

For those new to the concept, staking in its traditional form refers to the process of holding and locking cryptocurrencies in a wallet to support the operations of a blockchain network. Essentially, it involves participating in network operations, such as validating transactions in PoS-based blockchains like Ethereum. In return for their contribution, stakers are rewarded with additional cryptocurrency. This method is an alternative to the energy-intensive Proof-of-Work (PoW) model used by networks like Bitcoin. Compare it to earning interest in a traditional bank for holding your money there, but in the context of a blockchain network.

Liquid staking represents an advancement in this area, offering a method that allows users to earn passive income from staking while maintaining control and liquidity over their assets. It enhances traditional staking by enabling users to tap into the value of their staked assets and accrue additional yields in the DeFi ecosystem. 

Traditionally, liquid staking has been linked with Proof-of-Stake (PoS) networks. However, Stroom Network is breaking new ground by adapting this concept for Bitcoin, thereby increasing the appeal of liquidity provision through a dual yield model.

Beyond lines of code and smart contracts, our belief is that liquid staking will both enhance the efficiency of the Lightning Network and lead to higher APR for stakers, leading to mutual reinforcement and potentially increased participation and growth within the ecosystem.

Stroom’s Values: Transparency, Openness, Community Involvement 

We at Stroom have identified several critical problems that, in our opinion, require immediate attention. These include Bitcoin’s scalability issues, which result in slower transaction times and higher fees, enhancing liquidity in decentralized networks, particularly in a trustless environment, and addressing the lack of transparency and community governance in DeFi projects.

Our decision to tackle these specific challenges stems from a deep-seated belief in the foundational principles of blockchain technology: decentralization, transparency, and community involvement. Our core values of promoting an open, inclusive, and participatory financial ecosystem are the driving forces behind our initiatives.

In our commitment to transparency and bolstering community involvement, we're also setting our sights on the introduction of a DAO-like structure, a significant step forward in our journey. This innovative governance mechanism will be based on a multi-party signature computation model, enabling trustless management of funds allocated to payment channels as liquidity.

Our goal, as detailed in our whitepaper, is to enable the community to play a pivotal role in the governance and evolution of Stroom. Through the DAO structure, the community will have the power to:

  • Establish and modify incentives, ensuring the integrity and honesty of signature holders.
  • Replace validating nodes if necessary, maintaining the highest standards of network performance and security.
  • Propose and adopt upgrades to the Stroom protocol, fostering continuous innovation.
  • Manage the DAO treasury, funding development and core functionality of the protocol.
  • Govern the allocation and use of funds collected from service fees, ensuring fair and transparent financial management.

This DAO framework is not just about decentralization; it's about bringing real power to our community, allowing users to be an integral part of Stroom's growth and success.

Seed Funding and Strategic Partnerships

Stroom achieved a significant milestone in the summer of 2023, raising $3.5 million in an oversubscribed seed funding round. This fundraise, led by crypto investment firm Greenfield with strategic support from Mission Street, the venture arm of ANKR, is a testament to the confidence and belief in our vision and our core values. 

This funding is not just financial capital; it represents a network of strategic partnerships and resources that will propel Stroom forward in our mission to bridge Bitcoin and DeFi. Today we are well-positioned to accelerate our development and expand our reach in the DeFi space.

Stroom Network is at an exciting juncture in its journey. With a commitment to innovation, transparency, and community governance, we are reshaping the landscape of decentralized finance. Join us as we continue to break new grounds, build bridges in the crypto world, and empower our community like never before.

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