Trey Griffith, CEO with Sparkswap, posted on Medium that the company raised 3.5 million USD from a number of highly prominent VC companies, such as Initialized Capital, Pantera Capital, Foundation Capital, and Y Combinator.
The startup has been gradually readying to roll out the decentralized exchange, enabled by the atomic swap functionality on top of Lightning Network. The new exchange will deliver high execution speeds, fully non-custodial processing and an infinite number of trading pairs.
At this stage, Sparkswap has launched only 1 trading pair, BTC/LTC, and limited permitted transaction sizes.
The team sees the crypto community’s need for decentralized solutions, believing that high-performance non-custodial trading is an essential building block for the emerging blockchain-based financial system that is set to replace the legacy economy.
In his blog post, Trey Griffith shares his belief that the new system will be able to compete with decentralized alternatives:
“For the first time, non-custodial trading will be truly competitive with the custodial exchanges. By taking advantage of the Lightning Network, traders on Sparkswap do not have to sacrifice execution and settlement speed to keep custody of their assets.”
An atomic swap is an exchange operation which includes cryptocurrencies, based on different blockchains, provided that the swap happens simultaneously or not at all. In atomic swaps, the parties don’t need to trust each other which leads the way to disintermediation.
Centralized crypto exchanges have imposed high use and withdrawal fees on traders, while also opening them to such risks, as hacking, exchange exit schemes and lagging trade execution due to price slippage. Sparkswap claims that the platform will disrupt the crypto trading industry by gradually doing away with all of these pain points.