Historically, startups have built their products on blockchains outside of the Bitcoin network to avoid the slow transaction speeds, high fees, and inability to communicate cross-chain.
But thanks to efforts like the Lightning Network and Taproot Assets (formerly Taro), which have improved the accessibility, speed, and scalability of the Bitcoin network, a number of enthusiasts are building on top of Bitcoin.
For reference, the Lightning Network is a layer-2 payment system that aims to enable faster transactions at a nominal cost to the blockchain. Separately, Taproot, which launched in April 2022, aims to issue digital assets on Bitcoin’s blockchain, which can then be directly transferred to Lightning Network in low-cost transactions.
In Wolf’s Clothing (Wolf), a startup accelerator launched by asset management firm Stone Ridge, is a similar effort that aims to bolster Bitcoin-focused applications and use cases. More than 100 teams from 36 different countries applied to be part of the flagship exclusive non-remote cohort based in New York City.
The first cohort, Wolfpack 1, consisted of eight teams and 23 founders from 10 countries, and they presented their ideas at a demo day Wednesday, covered exclusively by MinRegion+.
All teams received seed money from Wolf, said the accelerator’s CEO, Kelly Brewster. NYDIG, a subsidiary of Stone Ridge, also supports the program, in addition to mentorship and investment from Bitcoin-focused VC firms and operating companies.
Many of the startups presented real-world use cases that weren’t about improving the bitcoin ecosystem, but about products and services people can use every day, made possible only by faster payment rails. The majority of startups integrated the Lightning Network into their technology.
The program featured 30 guest speakers from Stone Ridge and NYDIG, among others, including Lightning Labs co-founder and CEO Elizabeth Stark; Alex Gladstein, chief strategy officer at the Human Rights Foundation; and Lyn Alden, founder of Lyn Alden Investment Strategy.
What it does: Decentralized trading on Bitcoin
founders: Philip Howenisch, Richard HolzeisLucas Soriano del Pino, Mariusz Klochowicz, Daniel Karzel
The field: 10101 (Ten Ten One) offers decentralized finance and bitcoin trading through its mobile application. The company is a self-custodial, on- and off-chain wallet that allows users to trade perpetual futures without counterparty risk or third-party intermediaries such as exchanges.
The application is completely open source and powered by the Bitcoin Dev Kit and the Lightning Dev Kit. The company plans to add synthetic stablecoins and other products such as binary options, futures, structured products and prediction markets to its application in the long term, co-founder Philipp Hoenisch said during his pitch.
It raises a $2.7 million seed round and plans to publicly launch in the third quarter of 2023.
What it does: Global peer-to-peer marketplace built on Nostr
founders: Christopher DavidEric Aronesty
The field: Arcade is building a decentralized global marketplace for peer-to-peer trading with an initial focus on expanding into the Nigerian market. It wants to build a global order book that allows people to buy any product or service worldwide. Peer-to-peer Bitcoin onramps need to be uncensored, global, mobile and extensible, “so that’s what we’re building,” said co-founder and CEO Christopher David.
The marketplace hopes to reclaim the market share vacated by the recent closure of P2P marketplaces like LocalBitcoins. It builds on censorship-resistant open networks for payments such as Bitcoin, Lightning and the data network Nostr. The application is live in beta mode with about 500 test users.
Arcade is currently raising $2 million in seed funding through YC SAFE.
What it does: Social debate platform
founders: James Pierog, Ruban Sundara Raj T
The pitch: Agora is a gamified social debate platform where people can post ideas, argue their points in the comments, and vote with satoshis, bitcoin’s smallest currency, to determine which side wins. When the debate is over, the funds are divided among those who voted for the winning party. The company takes about 5% of each prize pool. It has seen about 140,000 satoshis — or $36.98 — in payment volume in the past two weeks in 1,085 transactions and 30 debates, said co-founder and CEO James Pierog.
The platform plans to launch a mobile app by the end of 2023.
What does it do: Streamlined tournament tools
founders: Neil Woodfine, Richard Bensberg, Adam Woodfine
The pitch: Dustup aims to elevate the esports competition space through its streamlined tournament tools that integrate bitcoin payments, giving players the ability to pay entry fees and collect prizes quickly. The typical esports tournament registration process is extremely slow and requires a ton of redirects, said CEO and co-founder Neil Woodfine, but the company’s tool allows players to register directly in a Discord in less than 30 seconds. The startup also offers automated results and custom scoring, as well as a bot that can help manage battle royale tournaments.
It raises a $350,000 pre-seed expansion round.
What it does: Lightning-focused web infrastructure
founders: Justin Hilton, Hatim Boufnichel
The pitch: ShockNet provides infrastructure and tools to bridge web applications with the Lightning Network for fast payments. The infrastructure connects Lightning micropayments to any app so people can deliver content and earn money. The startup is also building its platform, Lightning.video, which uses its technology stack to give creators a chance to monetize publishing and monetize their own content without having to post to platforms like YouTube.
Company: Route Finance
What it does: Corporate treasury operating system
founders: Nate Castillo, Ramin Keene
The pitch: Route is building a corporate treasury operating system that enables companies to automate cash management, analytics, forecasting, reconciliation, and integrate payments directly into treasury workflows by pulling data from over 170 different integrations. The service offers a programmable financial data platform — with support for AI, ML, and Bitcoin — that provides custom support for advanced treasury workflows.
Over time, the startup aims to enable payments through Lightning and Taproot technologies, and “essentially replace Swift” and “become the Stripe for Treasury,” says Nate Castillo, the company’s co-founder. It has four clients – Amboss, StackHawk, Denali and Teachable – in its pilot program. However, after this story was published, Amboss CFO Asher Hopp contacted MinRegion+ to clarify that Route had pitched Amboss, but there is no formal agreement between them.
Likewise StackHawk SVP Holly Hamann told us that StackHawk is also not a customer of Route and is not involved in the program. We’ve reached out to both Route and Wolf and will update this story accordingly with their comments.
What it does: Retention of pay slips
founders: Today Kamal, Javier Vargas
The pitch: The Zawda platform helps workers in MENA, Lebanon, Turkey and Pakistan allocate portions of their salary directly through their employers to bitcoin and stablecoins to maintain monetary value.
Countries in the Middle East are experiencing high inflation and rising costs, and people in those regions are seeing their local currency and purchasing power plummet, said the company’s co-founder Oday Kamal. The platform requires no technical integration and aims to work with people to improve their ability to hold currency and give them a way to receive a small portion of their salary in bitcoin to keep their money.
It is beginning its pilot phase with the United Arab Emirates and plans to finalize licensing with regulators in the country by the third quarter of 2023; it expects to exit this phase by the end of the year. It also wants to expand payroll offerings to stablecoins, through Taproot Assets. It later plans to launch in Lebanon, Turkey, Pakistan, as well as adding services such as money transfers, staking and lending.
What it does: Bitcoin wallet, node management
Founder: Evan Kaloudis
The pitch: Zeus is an open source, non-custodial Bitcoin wallet and node management client that aims to provide a better option for lightning interfaces and node fees. The entire process of setting up his wallet takes less than 30 seconds, founder Evan Kaloudis showed during his presentation. The wallet currently has about 10,000 users, accounting for more than 10% of all Lightning Network users. It is also building Olympus by Zeus, a lightning service provider, which aims to provide easier connectivity to the lightning network. The wallet is supported by Eclair, LND and Core Lightning and is integrated by BTC Pay, MyNode and Nodl, among others. It wants to raise $2 million to $3 million.