Bitcoin L2 solution Lightning Labs announces Taproot Assets alpha on mainnet

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Bitcoin Layer-2 Lightning Labs has introduced the alpha version of Taproot Assets on the mainnet, enabling the issuance of stablecoins and real-world assets on Bitcoin and Lightning Network.

Ryan Gentry, head of business development at Lightning Labs, described Taproot Assets as a “feature-complete developer experience” for issuing, managing and exploring stablecoins and other assets on the Bitcoin blockchain.

“We consider this new period for Bitcoin will see a myriad of worldwide currencies issued as Taproot Property, and the world’s international change transactions settled immediately over the Lightning Community,” Gentry said.

On Wednesday, Lightning Labs emphasized in a statement that the launch of Taproot Assets enables builders to issue financial assets on-chain, saying, “With this launch, builders can concern monetary belongings on-chain in a scalable method.”

Lightning Labs also described the launch of Taproot Assets as the start of a new era for multi-asset Bitcoin.

Furthermore, Taproot Assets’ current version, v0.3, will utilize the existing Bitcoin liquidity on the Lightning Network. Gentry expressed his belief that this integration will strengthen Bitcoin’s network and advance it closer to the objective of “bitcoinizing the dollar.”

“That is how we make bitcoin the worldwide routing community for the web of cash. That is how we bitcoinize the greenback and the world’s monetary belongings,” Gentry said.

Strong demands on Bitcoin stablecoin

Gentry mentioned a strong demand from developers for using stablecoins on Bitcoin, especially considering that some stablecoin issuers hold more United States Treasuries than countries like Germany and South Korea.

“[It] signifies the significance of those belongings globally, and provides a way of scale for the worldwide consumer demand,” Gentry said.

Gentry also disclosed that nearly 2,000 Taproot Assets had been created on testnets over the past several months leading up to the mainnet alpha launch.

Since alpha launches often signify that a project is not in its final state, Lightning Labs emphasized that the alpha tag indicates expectation for the community to test it for potential bugs.

Taproot Assets’ features, limitations

Taproot Assets offers features that enhance protocol scalability and resilience, making it suitable for low-powered mobile devices and bandwidth-restricted environments. Notably, it is light client-friendly, boasting low verification costs and requiring access only to untrusted Bitcoin transactions.

This protocol supports atomic swaps between assets and BTC, accommodating unique and non-unique assets, including collections. It also allows for creative multi-signature and co-signatory arrangements.

Furthermore, Taproot Assets can coexist with BTC channels within the same utxo, seamlessly integrating into the Lightning Network without extra resource consumption.

To ensure efficiency and privacy, Taproot Assets uses a Sparse-Merkle Tree for fast retrieval and updates of transaction data and a Merkle-Sum Tree for proving validity and non-inflation. Assets are transferred through on-chain transactions or within the Lightning Network by depositing them into a channel.

Participants in Taproot Assets bear the costs of verification and storage by keeping witness data off-chain in local data stores or “Universes,” similar to a git repository. To verify an asset’s validity, transaction history is checked from creation outputs. This process involves receiving a verification file via the Taproot Assets gossip layer, allowing clients to cross-check with their blockchain copy and add their proofs as the asset moves.

In Bitcoin, all the scripts that manage the coins are openly visible on the blockchain and accessible to everyone.

In Taproot, these instructions are concealed within a private structure referred to as the “tapScript branch.”