In a significant development for the Bitcoin community, Lightning Labs has released an updated edition of the Taproot Assets Protocol, promising a more efficient approach to minting new assets on the blockchain. In a recent blog post, the previous methods employed for inscribing assets on the Bitcoin blockchain were deemed “particularly inefficient” by the Lightning Network infrastructure firm.
The Taproot Assets Protocol aims to optimize operations by functioning “maximally off-chain,” thereby mitigating the network congestion issues that have plagued the Bitcoin network since the introduction of the BRC-20 token standard. This move addresses the concerns raised by Lightning Labs about the cumbersome protocols that directly consume valuable block space to write asset metadata.
Lightning Labs also announced that users of the Taproot Assets Protocol could soon integrate BRC-20 assets into the Lightning Network without building an entirely new ecosystem from scratch. This advancement opens the doors for seamless integration of wallets, exchanges, and merchants into the Lightning Network, enabling faster and more cost-effective transactions.
Most BRC-20 tokens presently rely on using Ordinal inscriptions of JSON data to deploy token contracts, mint tokens, and facilitate transfers. However, this approach has faced criticism from developers due to its exorbitant transaction fees, which are reportedly four times higher compared to using binary.
The Taproot Assets Protocol, formerly known as the “Taro” protocol, underwent a rebranding following a trademark infringement suit filed against Lightning Labs by Tari Labs. Although the protocol has shown promise, the total value of BRC-20 tokens experienced a temporary surge to over $1 billion on May 9, only to decline to $500 million, representing a significant decrease of nearly 50%.
With the release of the updated Taproot Assets Protocol, Bitcoin users can look forward to a more efficient and cost-effective approach to minting assets on the blockchain. This advancement addresses the network congestion concerns and brings us closer to a more seamless integration of BRC-20 assets into the Lightning Network ecosystem, fostering faster and more affordable transactions for the Bitcoin community.