Lightning Labs has announced the launch of Taproot Assets on Lightning. This new protocol enables the minting of assets on Bitcoin and their instant, low-fee transfer via the Lightning Network, according to a blog post by Lightning Labs.

The release of Taproot Assets on Lightning represents the first multi-asset Lightning protocol to become operational on Bitcoin's mainnet. It is designed to make Bitcoin and the Lightning Network multi-asset platforms, with a focus on scalability, security, and decentralization. This advancement paves the way for users to access a variety of financial assets in an open and interoperable payments network that routes through Bitcoin liquidity.

Lightning Labs expressed gratitude towards the Bitcoin and Lightning developer community for their contributions, which included feedback on the protocol, testing of early software versions, and the creation of initial products for end-users. The post highlighted that over the course of development, more than 170,000 assets were minted on-chain, and tools such as wallets, exchanges, and explorers for universes were built.

The Taproot Assets protocol allows any asset issuer to leverage the existing network effects of the Lightning Network, which currently includes 5,400 Bitcoin allocated for liquidity purposes. This design choice aims to foster rapid adoption by enabling assets to route through Bitcoin as the global routing currency. Developers can now open Lightning channels in their preferred unit of account, which can natively interoperate with the rest of the Lightning Network.

The blog post by Lightning Labs also acknowledged the geopolitical significance of stablecoins, citing their growth and adoption in various markets. With over half of the relative global on-chain transaction value in USD terms being attributed to stablecoins, their impact on financial systems has become increasingly noticeable. K33 Research projects that annual stablecoin volume will surpass $30 trillion in 2024, outstripping Visa's annual volume.

The new Taproot Assets release is included in the most recent Polar release, a popular tool for rapid prototyping among application developers. Lightning Labs has provided detailed installation instructions, API documentation, and a getting started guide for developers. However, the company has indicated that the alpha tag on the release suggests a measured approach to deployment due to the novelty of these features in real-world testing.

The launch of Taproot Assets on Lightning is poised to expand the capabilities of the Bitcoin network, offering a multi-asset platform that connects exchanges, wallets, and merchants with various financial institutions. With this new release, Lightning Labs is encouraging developers to innovate and explore the potential of a multi-asset Lightning Network.

Lightning Labs Blog Post