Lightning Labs has found a way to run stablecoins on bitcoin
Lightning Labs, a company developing infrastructure solutions for the most capitalized cryptocurrency - Bitcoin, has launched the mainnet alpha version of the Taproot Assets protocol. With this protocol, it's possible to issue stablecoins and other digital assets on BTC. The information was revealed in the company's blog. Let's discuss why members of the crypto community consider this event to be one of the most significant in the history of the crypto market.
About the Taproot Assets Protocol
Taproot Assets is a protocol that allows the launch of stablecoins and other digital assets based on Bitcoin and the second-level (L2) solution for BTC - Lightning. The tool expands the functionality of the most capitalized cryptocurrency.
"The release of [Taproot Assets v0.3] marks the beginning of a new era for Bitcoin. With this tool, developers will get the tools they need, allowing the Bitcoin network to support multiple assets. At the same time, we will preserve the cryptocurrency network's scalability features that resonate with its core values. We believe that in this new Bitcoin era, the market will witness a vast number of cryptocurrencies issued using Taproot Assets, with their transactions being processed by Lightning," described the development, Ryan Gentry, the head of business development at Lightning Labs, adding that Taproot Assets is a step towards the bitcoinization of the dollar.
The v0.3 version of Taproot Assets will operate based on the existing Bitcoin liquidity in the Lightning network. According to the developers, the protocol will transform BTC into a global internet money network. The current release provides tools for issuing and managing digital assets on Bitcoin.
Bitcoin vs Other Cryptocurrencies
Bitcoin is not the most technologically advanced cryptocurrency. Developers of alternative crypto projects have exploited this gap. For example, the popularity of Ethereum, the second most capitalized cryptocurrency, is largely associated with the use of flexible smart contract technology.
ETH's technical solutions made the project suitable for launching new coins on top of it. Among them, the two most capitalized stablecoins, Tether (USDT) and USDC Coin (USDC), operate on Ethereum. Other "stable coins" are present in the networks of other crypto projects such as TRON and Algorand, but they are not on Bitcoin. The reason is that there were no tools to launch stablecoins on BTC before. Taproot Assets might change the game.