Andrew Thurman

Are stablecoins and other real-world assets coming to Bitcoin? A new release from Lightning Labs may enable just that.&nbsp;



Lightning Network developers Lightning Labs announced on Wednesday the “mainnet alpha” release of Taproot Assets, a protocol for minting non-native assets to Bitcoin, and eventually to the Lightning Network.&nbsp;



In a blog post from Lightning Labs, business development director Ryan Gentry wrote that developers now have “the complete set of tools to start issuing, managing and exploring mainnet assets on-chain.”



The blog post emphasized <a href="https://blockworks.co/tag/stablecoins">stablecoins</a> in particular as a promising design space, pointing to recent research that shows stablecoin projects are, in aggregate, now among the largest holders of US Treasurys in the world.&nbsp;



Additionally, the blog cited a recent Blockworks article, noting that stablecoins are an ideal <a href="https://blockworks.co/news/stablecoin-empire-emerging-economies-user-interface">alternative to local currencies in emerging economies</a>.&nbsp;



“Over 2 billion people live under double or triple digit inflation in their local currencies, making a stablecoin&#8217;s price stability relative to the dollar even more attractive. We believe that Taproot Assets bringing stablecoins to bitcoin wallets will only accelerate the process of bringing bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) to those billions of people,” he wrote. 



Developers have reportedly begun experimenting with “gold, US Treasurys, corporate bonds with programmatic coupon payments and more.”



The launch of the protocol comes amid a surge of activity in Bitcoin development. The 2021 <a href="https://blockworks.co/news/anticipating-bitcoins-taproot-upgrade-heres-what-you-need-to-know">“Taproot” upgrade to the network</a> — the first since 2017 — significantly expanded the theoretical capabilities of the chain from a development perspective. 



Since then, native NFTs from developer Casey Rodamor – also referred to as Ordinals – have led to a <a href="https://blockworks.co/news/new-bitcoin-ordinals-marketplace">surge in transactions and interest in Bitcoin</a> blockspace.&nbsp;



Likewise, in October a research paper proposed “BitVM,” a protocol that would leverage Taproot to <a href="https://blockworks.co/news/zerosync-starkware-zero-knowledge-proofs-bitcoin">enable the creation of a zero-knowledge light client for Bitcoin</a> that would theoretically be Turing complete.&nbsp;



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Bitcoin

Lightning Labs teases protocol for minting RWAs, stablecoins on Bitcoin

Casey Wagner

<div id="highlights-block_624da9268198b" class="highlights">
 <ul>
 <li>Taro aims to combine the security and stability of the Bitcoin network with the speed and scalability of Lightning</li>
 <li>Users will be able to send many global currencies quickly and for low fees, the company said</li>
 </ul>
 
</div>



Lightning Labs, a startup building payments infrastructure on the Bitcoin network, is creating a new protocol that will allow users to send cross-border payments faster and for lower fees, the company announced Tuesday.



Taro, which will be supported by the layer-2 protocol Lightning, aims to combine the security and stability of the Bitcoin network with the speed and scalability of Lightning, Ryan Gentry, business development lead at Lightning Labs, said in the <a href="https://lightning.engineering/posts/2022-4-5-taro-launch/" target="_blank" rel="noreferrer noopener">announcement</a>.



“This is what a lot of people get wrong about bitcoin,” Elizabeth Stark, co-founder and CEO of Lightning Labs, said in a statement. “It can be a medium of exchange without being [a] unit of account. Many users in the future will be using bitcoin without even knowing it.”



The project, which is still in the development stage, aims to “bitcoinize the dollar,” Lightning Labs said. It will allow users to route various global currencies through bitcoin by using stablecoins, making for seamless, instant payments at very low fees, the team added.



“We’ve talked to myriad community members in emerging markets who’ve told us what a big difference stablecoins on bitcoin and Lightning would make in their economies,” the company wrote in a <a href="https://medium.com/@lightning_labs/number-of-people-go-up-or-bitcoin-as-the-worlds-protocol-of-value-d1df7cefca37" target="_blank" rel="noreferrer noopener">statement</a>.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Taro makes sending assets like these possible using the bitcoin network with the instant, high volume, low fee nature of Lightning.”</blockquote>



Taro allows bitcoin to act as a “protocol of value,” Gentry said, by allowing app developers to integrate other assets alongside bitcoin on the blockchain and over the Lightning network.&nbsp;



The new functionality for Lightning was enabled by <a href="https://cms.blockworks.co/anticipating-bitcoins-taproot-upgrade-heres-what-you-need-to-know/" target="_blank" rel="noreferrer noopener">the Taproot upgrade</a> to Bitcoin in November, one of its most significant updates to the network since 2017.



“This expands the reach of Lightning Network as a whole, bringing more users to the network who will drive more volume and liquidity in bitcoin and allowing people to easily transfer fiat for bitcoin in their apps,” he added.&nbsp;



Alongside the Taro launch, Lightning Labs also announced its $70 million Series B fundraise from investors including Valor, Brevan Howard and NYDIG.



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