Taproot Assets will allow Lightning Network developers to create tokens and stablecoins that can be fully natively integrated into the LN network and used to build a Bitcoin-centric DeFi ecosystem.
The highly anticipated Taproot Assets service has entered the mainnet alpha stage, providing developers with a comprehensive toolset to issue, manage, and explore stablecoins or other assets on the Bitcoin blockchain. This milestone signifies a new era for Bitcoin, where builders can transform it into a multi-asset network while maintaining its core values. This is thanks to the release of Taproot Assets v0.3, the newest version of this exciting protocol for Bitcoin and Lightning Network.
The announcement was posted on Lightning Labs' X account, and has raised a stir about the capabilities of this project, especially focused on allowing Bitcoin to deploy tokens and stablecoins natively on its network.
With Taproot Assets, Bitcoin developers can imagine a future where stablecoins can be issued on top of Bitcoin, while allowing currency transactions to be settled instantly over the Lightning Network. These Taproot Assets Lightning transactions will be seamlessly routed through existing Bitcoin liquidity, allowing routing nodes to forward them without any modification, further expanding Bitcoin’s global network effects and strengthening its security. This is the path to making Bitcoin the global routing network for the Internet of Money, bitcoinizing the dollar and the world's financial assets.
A new era of Bitcoin tokens
The announcement comes with the release and update of the Taproot Assets software, which is available in the latest version of Polar. Polar is a popular tool used for rapid prototyping among app developers. Taproot Assets has also been integrated into litd, the suite of tools from Lightning Labs that includes the lnd service for Lightning Network node operations.
The team also reported that during the testnet development phase, early adopters continuously collaborated with the development of the project, creating almost 2000 assets on the testnet and synchronizing their nodes with the Universe server more than 420.000 times. This data indicates a huge interest in the technology and its possibilities, especially in the generation of a DeFi ecosystem on Bitcoin. A demand that can further boost the use of the Lightning Network, which has been growing significantly in recent years.
All of this represents an important milestone in the development of digital assets on Bitcoin, especially because it will allow tokens to be generated on the network in a very simple way and served on the Lightning Network.
Unique functionalities
Lightning Labs highlights that this version of Taproot Assets v0.3 includes a series of significant improvements in the issuance and redemption APIs, asynchronous receiving functionality, Multiverse mode for Universes, and scalability, security, and developer experience. Here are some of its benefits:
Full-featured issuance and redemption API
The Asset Issuance APIs are the means to create new tokens on Taproot Assets. In this release, they have been enhanced to accommodate the expected flows of mainnet usage. Tiered issuance, i.e. minting multiple sets of assets at different times while preserving fungibility, is now fully supported.
Issuers will sign new tranches of issued assets with a pool key, allowing users to automatically verify that new issuance is fungible with old tranches. Additionally, Taproot Assets v0.3 includes new asset burning APIs to facilitate when asset issuers perform redemptions.
Asynchronous reception functionality
For on-chain Taproot Assets transactions, users will need to send and receive assets without both parties being online at the same time. For receivers, that means providing the ability to generate an address that anyone can send to at any time.
Taproot Assets v0.3 accomplishes this by giving developers tools to add a proof-retrieval Uniform Resource Identifier (URI) to an on-chain address. The receiver’s wallet will then sync with the specific Universe server detailed by that URI to download the off-chain proof data they’ll need to send their newly received assets in the future.
Multiverse Mode for Universes
Universes are the repositories that hold all the information needed for a Taproot Asset wallet to initialize and synchronize the state of a specific Taproot Asset. Multiple Universe servers can be operated as a federation and all remain in sync for a given asset, so even if the sender's server is offline, a receiver can have many different data sources to verify that the sender's assets are legitimate.
A key feature of Taproot Assets v0.3 is the introduction of Multiverse functionality. Multiverse mode allows a given Universe server to support multiple assets, and more importantly, all relevant transaction history for each asset. This allows developers to acquire and host all the data needed to create the familiar block explorer experience for end users.
Improvements in scalability, security and developer experience
Developing a mainnet alpha version of the Taproot Assets daemon required significant improvements to security, scalability, and developer experience. On the scalability front, the new release includes a build-loadtest command that will allow developers to stress test the software themselves. To help DevOps teams ensure their infrastructure can handle the daemon’s load, the ability to report metrics to Prometheus, the popular time-series database and monitoring system, has also been included.
On the security front, Taproot Assets v0.3 adds more secure proofs with block height and header validation. Also included are limitations on proof decryption to prevent resource exhaustion, reorg security in the event of blockchain forks from the main bitcoin network, and a number of other lower-level updates.
A major milestone is the addition of protocol versions for all upgradeable parts of the protocol. This provides developers with the future-compatibility assurance needed to issue assets on the mainnet today and know that they will remain usable if improvements are made to the protocol. Additionally, test vectors are now produced for Bitcoin Improvement Proposals (BIPs), allowing developers to verify the integrity of the protocol by reimplementing it themselves. Finally, this release includes a number of command-line improvements based on extensive feedback to provide the smoothest experience for developers.
Taproot Assets v0.3 represents a significant advancement in the development of digital assets on Bitcoin. Improvements to APIs, functionality, and security make Taproot Assets a more robust platform for the creation and issuance of digital assets. A platform with the potential to revolutionize the digital asset space by allowing developers to issue digital assets on Bitcoin, while opening the door to a wide range of new and exciting applications on top of Bitcoin and the Lightning Network.
Continue reading: Bitcoin and Lightning Network join publisher monetization tools MASH and TFTC
