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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.
Updated Dec 20, 2022, 5:09 p.m. Published Dec 20, 2022, 12:00 p.m.
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.
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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.
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“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.
Read more: How Two New Sidechains Proposals Could Change Bitcoin's DNA
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Exchange Review - March 2025
CoinDesk Data's monthly Exchange Review captures the key developments within the cryptocurrency exchange market. The report includes analyses that relate to exchange volumes, crypto derivatives trading, market segmentation by fees, fiat trading, and more.
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Trading activity softened in March as market uncertainty grew amid escalating tariff tensions between the U.S. and global trading partners. Centralized exchanges recorded their lowest combined trading volume since October, declining 6.24% to $6.79tn. This marked the third consecutive monthly decline across both market segments, with spot trading volume falling 14.1% to $1.98tn and derivatives trading slipping 2.56% to $4.81tn.
- Trading Volumes Decline for Third Consecutive Month: Combined spot and derivatives trading volume on centralized exchanges fell by 6.24% to $6.79tn in March 2025, reaching the lowest level since October. Both spot and derivatives markets recorded their third consecutive monthly decline, falling 14.1% and 2.56% to $1.98tn and $4.81tn respectively.
- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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