Original author: Daniel Li, CoinVoice
As the Bitcoin halving market approaches, the idea of Bitcoin becoming a global settlement asset has attracted more and more institutions and begun to make arrangements on this track. Whether it is RWA (Real World Assets) or Ordinals (Inscription Assets), they all advance Bitcoin’s goal of becoming a global settlement asset to some extent. In this process, Taproot Assets, as a Bitcoin meta-protocol directly integrated by the Lightning Network, will play an important role.
Just on October 21st, Lightning Network developer Lightning Labs announced the release of Taproot Assets v 0.3 on the mainnet alpha version. This release will pave the way for the issuance of stablecoins and other assets on Bitcoin. Elizabeth Stark, CEO and co-founder of Lightning Labs, said that Taproot Assets v 0.3 heralds the arrival of a new era for Bitcoin and will further consolidate Bitcoin’s importance in the global financial system.
What are Taproot Assets?
Over the past week, Bitcoin has gained more than 15%, briefly topping a high of 35,000. Bitcoin spot ETFs have become the focus of market attention, and the new narrative surrounding Bitcoin has also become a mainstream trend in the current encryption industry. In addition to the most talked about Bitcoin spot ETFs, there is also a new way of issuing Bitcoin assets that has attracted the attention of investors, which is Taproot Assets.
Taproot Assets Protocol
Taproot Assets is a new protocol based on Taproot that aims to implement asset issuance on the Bitcoin chain. The protocol allows assets to be deposited into Lightning Network payment channels and transferred through the existing Lightning Network. Taproot Assets provides a comprehensive set of tools for developers interested in issuing, managing, and exploring mainnet assets on-chain. The protocol introduces corresponding new features and improvements in scalability, security, and developer experience.
Taproot Assets was first developed by Lightning Labs, a developer of Bitcoin Lightning Network infrastructure. Lightning Labs was founded in 2016 to improve Bitcoin’s scalability so that transactions can be made faster and cheaper. On October 21, Lightning Labs announced the launch of Taproot Assets v 0.3, the latest version of the Taproot Assets protocol.VersionOne of the highlights is forward compatibility, ensuring that Taproot assets are not affected by any future protocol changes, providing stability and confidence to asset issuers and users.
Elizabeth Stark, CEO and co-founder of Lightning Labs, said in an interview with The Block that Taproot Assets will help lead the “Bitcoin renaissance” and make Lightning Network a multi-asset network, further consolidating Bitcoin’s role in the “Internet of Money” field. status.
Core part of the Taproot Assets protocol
Schnorr Signature Algorithm: Taproot Assets uses the Schnorr Signature Algorithm, an efficient and more private Bitcoin transaction signature algorithm. Allowing multiple inputs to share the same signature, Schnorr signatures reduce transaction size, improve privacy, and provide users with a more secure and efficient transaction experience.
Merkleized Abstract Syntax Tree (MAST): MAST is a data structure used for organizing and validating complex scripts. Taproot Assets leverages MAST to combine multiple conditions and branches into a single Merkle tree, reducing transaction complexity and size and providing more flexible asset management and trading rules.
Scriptless Scripts: Taproot Assets introduces Scriptless Scripts, a new contract feature introduced in Taproot. It allows for more complex conditions and protocols in Bitcoin transactions without exposing scripts on the blockchain, improves transaction privacy, reduces transaction size, and provides users with a more secure and private transaction environment.
Taproot Assets Core Features
Asset issuance and redemption: Taproot Assets allows asset issuers to issue assets in batches on the Bitcoin mainnet and destroy assets at any time, achieving flexible management of asset supply while ensuring that the public can obtain the latest asset information.
Asynchronous receiving function: Taproot Assets supports asynchronous receiving function, that is, even if both parties to the transaction are not online at the same time, assets can still be sent and received. By being associated with a Uniform Resource Identifier (URI), the recipients wallet can automatically sync and process newly received assets in the background.
Multi-Universe Model: Taproot Assets adopts a multi-universe model where participants involved in the transfer of assets can verify and store information about the assets. This information is stored in the issuers local data storage or information warehouse called Universes. Even if the issuers server fails, the legal validity of the assets can still be verified through other universes.
Issuing stablecoins: Taproot Assets is suitable for issuing stablecoins, which are tokens that are anchored one-to-one to legal currency. Combined with the Lightning Network, Taproot Assets provides stablecoin support and provides users with payment channel functions, so that stablecoins on the Bitcoin chain can be used for daily high-frequency payments, with convenience and synergy.
Atomic swaps: The Taproot Assets protocol also allows for atomic swaps of assets to and from Bitcoin, handling unique and non-unique assets as well as collections. This means that users can directly exchange different assets without involving a third party, achieving efficient flow and transfer of assets.
Lightning Network support: Taproot Assets protocol assets can be deposited into Lightning Network payment channels and transferred through the existing Lightning Network. As a second-layer solution for Bitcoin, the Lightning Network features high speed, scalability, and low fees, making Taproot Assets’ asset transfers faster and more cost-effective.
Taproot Assets leads a new direction in Bitcoin asset issuance
In the cryptocurrency space, asset issuance and trading have always been a focus. With the introduction of Taproot Assets, Bitcoin will usher in a new era, opening the door to multiple asset transactions. Taproot Assets was originally designed to enable efficient, secure and privacy-preserving asset management and transfer, bringing a more integrated and secure approach to the Bitcoin network.
The core idea of Taproot Assets is to combine the transfer of assets with the security and stability of the Bitcoin chain. Through specific protocols and the Lightning Network, Taproot Assets not only supports on-chain asset transfer, but also off-chain asset transfer. This dual mechanism provides users with dual guarantees of flexibility and security. At the same time, through the so-called Pocket Universe"” design, Taproot assets realize the aggregation and verification of assets on the chain, further enhancing the security and privacy of asset transfers.
Compared with traditional asset issuance and trading methods, Taproot Assets brings many important innovations.
First, Taproot Assets enables multi-asset trading on Bitcoin, providing users with a wider range of trading options. Both fungible and non-fungible assets can be expressed on the Bitcoin network through Taproot Assets. This openness and compatibility provides users with a more flexible, secure and convenient trading experience.
Second, Taproot Assets introduces the speed, scalability, and low fees of the Lightning Network. As a second-layer solution for Bitcoin, Lightning Network enables instant and low-cost transactions by establishing a two-way payment channel. This enables Taproot assets to enable large-scale transactions and reduces the burden of transaction fees. This is an important breakthrough for asset holders and transaction participants, creating more business opportunities and transaction possibilities for them.
In addition, Taproot Assets is designed to make asset transfer efficient, secure and privacy-protecting. Asset holders can transact with Taproot Assets in the same manner as regular Bitcoin transactions. This means that the security and verification methods during the asset transfer process are consistent with Bitcoin’s core technology and will not create additional risks. At the same time, through Taproots design, the asset transfer process has been further optimized and protected, ensuring the privacy and security of asset holders.
Overall, the introduction of Taproot Assets not only brings more innovation and development opportunities to Bitcoin and the entire cryptocurrency field, but also opens up new prospects for asset issuance and trading. As Taproot Assets develops, we can foresee that more assets will be issued as Taproot and widely used on the Bitcoin network. This will promote asset liquidity and trading activity, while also providing investors and users with more choices and opportunities.
Taproot Assets: Unleashing the potential value of Bitcoin
Taproot Assets aims to transform the Lightning Network into a multi-asset network. Lightning Labs is working hard to make this happen following the release of Taproot Assets v 0.3. They have minted nearly 2,000 assets on the testnet, including stablecoins, collectibles, and assets with real-world potential. In addition, some projects such as Joltz Rewards, Nostr Assets, Royllo, Deezy, Speed, DFX Swiss and Tiramisu Wallet are also building infrastructure related to Taproot Assets, including web wallets, mobile wallets, open source software development kits and developer tools, etc. .
Lightning Labs said that with Taproot Assets v 0.3, builders have all the tools needed to make Bitcoin a multi-asset network while maintaining the core value of Bitcoin in a scalable way, which will undoubtedly greatly unlock the potential value of Bitcoin.
First, the introduction of Taproot Assets will significantly improve Bitcoin’s scalability. By combining the Schnorr signature algorithm and the Taproot protocol, Taproot Assets can integrate multiple transactions into one transaction, reduce the amount of transaction data on the blockchain, improve transaction processing efficiency, reduce costs, and provide better services for more users and applications. experience.
Secondly, the launch of Taproot Assets will enhance Bitcoin’s privacy protection capabilities. By hiding scripts and improving privacy-preserving signatures, Taproot Assets makes transactions more difficult to track and analyze, enhancing user transaction privacy and financial privacy.
In addition, Taproot Assets will promote the development of Bitcoin smart contracts. Bitcoins issued through Taproot Assets can support more complex smart contracts. This will provide developers with more possibilities for innovation and expansion, and bring more flexible and diverse application scenarios to the Bitcoin ecosystem.
Finally, the release of Taproot Assets will stimulate innovation and development in the Bitcoin ecosystem. It opens up more possibilities for asset issuance and usage scenarios, attracts more developers and enterprises to join the Bitcoin ecosystem, and drives the ecosystem forward.
Asset issuance has always been the core market in the blockchain field. Blockchain builders have been committed to realizing the digitization and tokenization of real-world assets and the free flow of real-world assets. Against this background, the emergence of Taproot Assets provides Bitcoin with a more comprehensive and professional asset issuance method, which will further attract innovative projects to join the Bitcoin ecosystem.
Through the joint efforts of Taproot Assets and related protocols, the Bitcoin ecosystem is moving towards a mature payments infrastructure, while also spawning the development of various derivative products. For example, areas such as wallet applications, NFT markets, and social applications will benefit from these efforts. The construction work of Taproot Assets lays a solid foundation for realizing these scenarios.
