Lightning Labs, a Bitcoin layer-2 infrastructure developer, announced the first mainnet release of Taproot Assets on Wednesday, a protocol that allows developers to issue and manage stablecoins and other assets on the Bitcoin blockchain via the Lightning Network.
See related article: Weekly Market Wrap: Bitcoin falls below US$27,000 following CPI and Israeli conflict
- With Taproot Assets, Lightning Network users can hold assets beyond Bitcoin in their wallets. Payments through Taproot Assets will be routed through the Lightning Network, while Bitcoin will offer liquidity for payments denominated in other assets.
- Developers minted nearly 2,000 assets on the testnet, including real-world assets like gold, U.S. Treasuries and corporate bonds with programmatic coupon payments.
- The Lightning Network is a layer-2 scaling network on Bitcoin. A layer-2 network can improve transaction speed and reduce network congestion.
- The Bitcoin network has faced congestion issues this year, due to a surge of interest in Ordinals inscriptions, an iteration of non-fungible tokens (NFTs) on Bitcoin. Layer-2 solutions like the Lightning Network can reduce network congestion by processing transactions off the main blockchain.
- Other layer-2 protocols, such as Stacks and Liquid Network, also improve transaction speed and reduce congestion on Bitcoin.
See related article: Fake BlackRock ETF news prompts US$57 mln in Bitcoin long liquidations