by Joseph Young
Blockchain technology investment and development firm Coinsilium Group Limited has invested US$100,000 in RSK Labs, the operators of smart contract platform RootStock, in a co-led funding round.
Coinsilium’s wholly owned subsidiary, Seedcoin, also participated in the round, investing US$50,000 in bitcoin and an additional US$50,000 on behalf of Coinsilium’s co-investors for a convertible instrument which gives the right to the shares of RSK Lab’s equity to Coinsilium. At a US$5 million valuation, Coinsilium successfully acquired 1% of RSK Lab’s equity.
“We are delighted to announce that Coinsilium has acquired an early strategic stake in RSK and we’re excited at the prospect that the RootStock platform can potentially deliver the strength and security of Bitcoin with the smart contract capability of Ethereum,” said Coinsilium’s Executive Chairman Cameron Parry. “We are also pleased to be able to utilise our co-investor network to see Coinsilium and its co-investors contribute approximately 28% of RootStock’s initial seed funding round.”
RSK Lab, better known for its platform RootStock operates a sidechain that is interoperable with the Bitcoin blockchain with a two-way peg. The implementation of a sidechain enables RootStock to add value and new functionalities to the core Bitcoin network. One of the few beneficial application of the RootStock technology is a Bitcoin blockchain-based smart contract platform.
Described by renowned cryptographer and researcher Nick Szabo as the “Best of Bitcoin + best of Ethereum,” the RootStock platform intelligently synergizes the advantages and strengths of the Bitcoin network as a transaction settlement system and the Ethereum protocol as a smart contract issuer and management platform.
The RSK Lab team already released their white paper “Bitcoin Powered Smart Contracts,” which is set to be launched in mid-2016. Prior to the highly anticipated release of the RootStock software, RSK Lab agreed to have Coinsilium join their team as an investor in a critical stage of the venture.
“We are excited to have Coinsilium join us as an investor at this stage of the company,” said RootStock’s Chief Scientist and co-founder Sergio Lerner. “We have designed RootStock to add value to the Bitcoin network by providing smart contracts capabilities through a merge-mined sidechain, thereby enabling sophisticated transactions as secure as the Bitcoin network. RootStock also provides Bitcoin miners and mining pools the opportunity to participate in the smart contracts revolution and an additional revenue stream via merge-mining.”
Over the past few years, many Bitcoin and blockchain startups have attempted to develop ambitious projects and platforms, such as the “Internet of Things” and alternative blockchain protocols like Ethereum and Bitshares. However, these platforms were left with criticism regarding their monetization of their services and products.
At this stage of the company, RSK lab envisions a clear revenue model, by generating income via merge-mining and other blockchain-based paid services.