Lightening Cash, the privacy protocol based on Binance Smart Chain, has received a significant boost in the form of a $2 million seed injection. The project, which is developing its privacy-focused application, has confirmed that Vietnamese investment fund HC Ventures is providing the backing. The move comes as the DeFi ecosystem on Binance Smart Chain (BSC) is in a period of rapid expansion.
Lightening Cash emerged last month as one of the latest DeFi projects to set up home on the BSC, joining the likes of SushiSwap, 1inch, and PancakeSwap. It is developing a privacy protocol using zero-knowledge proofs, along with an innovative yield farming mechanism aimed at achieving a more stable token price.
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DeFi’s Privacy Problem
The Lightning Cash app aims to solve the problem of privacy in DeFi. Although anyone can transact using blockchain without signing up for a named account, it’s still relatively easy to follow someone’s transactions once you know their public address. For hackers and cybercriminals, this is useful information as they can try to target individuals through tactics such as spearphishing or malware in an attempt to gain access to their private keys.
Lightening Cash uses zero-knowledge proofs, the same technology as privacy coin Zcash, to cloak transactions and offer users an assurance of privacy. Zero-knowledge proofs allow miners and validators to confirm a transaction via an encrypted proof that it took place, without the need to see the details or upload them to the public blockchain ledger. Therefore, the protocol is likely to prove attractive to DeFi users concerned about the visibility of their transactions.
The project also has its own utility and governance token, called LIC. Users who transact with the Lightening Cash app pay a small transaction fee. Profits from the protocol are forwarded into a LIC Treasury, which is then provided as a reward to farmers, and used as liquidity for the LIC pools on PancakeSwap.
To offset the risks of high inflation, Lightening Cash operates a multi-yield farming and staking mechanism that aims to achieve sustainable long-term growth without compromising a high APY. Periodically, the project will buy back tokens from the automated market makers on PancakeSwap, helping to push the token price and ensuring a continuous supply of LIC to reward farmers and stakers.
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The Road to Interoperability
In its first iteration, Lightening Cash will support DeFi users on the Binance Smart Chain, which it has selected due to the speed, security, and low transaction fees. However, the project is ultimately aiming to become interoperable with dApp ecosystems on other blockchains. As the BSC is compatible with the Ethereum Virtual Machine, it’s theoretically already possible for Ethereum developers to interact with Lightening Cash and other applications on the BSC. This interoperability is part of the reason that Ethereum-based apps, including SushiSwap and 1inch have migrated to the BSC.
The $2m funding from HC Ventures will now help to incubate Lightening Cash as it develops a roadmap to interoperability with other blockchain networks. HC Ventures is a Vietnamese venture fund founded by Ryan Nguyen, who is also the CEO of Lightening Cash.
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