Lightning Labs has rolled out Taproot Assets Protocol on Bitcoin.
The new protocol is still in testnet and will permit multi-asset minting on Bitcoin.

Blockchain software developer Lightning Labs has rolled out its Taproot Assets protocol on the mainnet network. The newly released protocol is designed to facilitate the issuance of stablecoins and real-world assets on the Bitcoin (BTC) and Lightning Network. Taproot Assets v0.3 is the currently available version and it is built in such a way that the team expects it to offer a “feature-complete developer experience.”

Based on design and functionality, this version of the Taproot Assets protocol will leverage existing Bitcoin liquidity on the Lightning Network. Before its latest mainnet alpha launch, almost 2,000 Taproot Assets have been minted on testnets. It is worth noting that the development is yet to reach the final phase. In the meantime, it is open for developers to test for potential bugs.

Apart from enabling stablecoin and other asset issuance on the Bitcoin network, it would also help developers manage and explore the different asset classes on the same blockchain. Moreso, Ryan Gentry, the director of development at Lightning Labs explained that the Taproot Assets protocol will provide developers with the appropriate tools needed to make Bitcoin a multi-asset network, but this would be achieved in a scalable manner that still maintains Bitcoin’s core values. 

According to a Wednesday blog post, Gentry classified this recent development as a new era for the Bitcoin network. He is positive that a myriad of global currencies including stablecoins will be issued as Taproot Assets and the “world’s foreign exchange transactions settled instantly over the Lightning Network.” The Lightning Labs executive also perceives this move as a step further towards making BTC the global routing network for the internet of money, and “bitcoinizing” the dollar.

Generally, Gentry sees a growing global demand for stablecoins which is further underscored by an overwhelming developers’ request for stablecoin applications on Bitcoin. Some stablecoin issuers have been discovered to hold more United States Treasuries than the likes of Germany, and South Korea. The only foreseen challenge for Taproot Assets may be meeting this overwhelming demand while avoiding congestion on the Bitcoin network. 

Broad Plans to Improve Bitcoin Network

Bitcoin Improvement Proposal (BIP) 324, Botanix Labs’ Spiderchain, and the Bitcoin-based virtual machine (BitVM) are a few of the upgrades that have been introduced in the Bitcoin ecosystem to upscale the capabilities of the network. 

Spiderchain is focused on improving Bitcoin in terms of composability and scalability by creating an avenue for Ethereum smart contracts to coexist seamlessly with Bitcoin’s security. 

Botanix Labs’ founder, Willem Schroé, believes that mainstream adoption of BTC will not happen until it bridges to Ethereum Virtual Machine (EVM). 

For BIP 324, the aim is to bolster the Bitcoin network’s defenses against man-in-the-middle attacks, seeing that it would allow nodes to “opportunistically encrypt” their communications with network peers. Amongst other functions, BitVM is designed to address the problem of scalability on Bitcoin, especially for payments. 

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Filed under: Bitcoin - @ October 19, 2023 7:03 pm