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Lightning Labs releases Taproot Assets alpha, bringing stablecoins to Bitcoin

Coin Telegraph
Lightning Labs releases Taproot Assets alpha, bringing stablecoins to Bitcoin
bip-300

Taproot Assets is “how we bitcoinize the dollar and the world’s financial assets,” says Ryan Gentry, director of business development at Lightning Labs.

Bitcoin layer-2 infrastructure firm Lightning Labs has released the mainnet alpha of Taproot Assets, a protocol aimed at enabling stablecoins and real-world assets to be issued on the Bitcoin and Lightning Network.

The current version, Taproot Assets v0.3, will provide a “feature-complete developer experience” to issue, manage and explore stablecoins and other assets on the Bitcoin blockchain, according to Ryan Gentry, head of business development at Lightning Labs.

“We believe this new era for Bitcoin will see a myriad of global currencies issued as Taproot Assets, and the world's foreign exchange transactions settled instantly over the Lightning Network.”

“With this release, developers can issue financial assets on-chain in a scalable manner,” Lightning Labs stated on Oct. 18 in a separate post. “Today marks a new era of multi-asset bitcoin.”

This version of Taproot Assets will work by routing through existing Bitcoin liquidity on the Lightning Network.

Gentry says the integration will extend Bitcoin’s network effects and move it one step closer toward “bitcoinizing the dollar.” He added:

“This is how we make bitcoin the global routing network for the internet of money. This is how we bitcoinize the dollar and the world's financial assets.”

Gentry described developer demand for stablecoin applications on Bitcoin as “overwhelming” — particularly given that some stablecoin issuers hold more United States Treasuries than the likes of Germany, South Korea.

“[It] signifies the importance of these assets globally, and gives a sense of scale for the global user demand,” Gentry added.

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Nearly 2,000 Taproot Assets were minted on testnets over the last several months in the lead up to the mainnet alpha launch, according to Gentry.

Alpha launches typically mean the development isn’t in its final state. Lightning Labs said the alpha tag indicates that they expect the community to test it for potential bugs.

Bitcoin Drivechains (through Bitcoin Improvement Proposal-300), Botanix Labs’ Spiderchain and the BitVM are among the other developments in the Bitcoin ecosystem looking to expand Bitcoin’s capabilities.

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Bitcoin needs Ethereum VM to reach its full potential — Web3 exec

Coin Telegraph
Bitcoin needs Ethereum VM to reach its full potential — Web3 exec
bip-300

Botanix Labs founder Willem Schroé argues a “huge amount of value” from real-world assets will be captured on Bitcoin, provided it connects to the Ethereum Virtual Machine.

Mainstream Bitcoin (BTC) adoption won’t happen until it bridges to the Ethereum Virtual Machine (EVM) — the first point of entry for many real-world assets moving on-chain, a Web3 executive argues.

Speaking to Cointelegraph, the founder of cross-chain infrastructure firm Botanix Labs, Willem Schroé, claimed Bitcoin “needs to start playing in the EVM world” for it to build real-world use cases to increase its adoption and utility.

“Bitcoin is the most technologically secure and truly decentralized protocol [and] the EVM has proven itself to be the application layer for the global financial system,” Schroé said.

While Bitcoin is typically used as a peer-to-peer payment system or for storing value, Schroé said its potential won’t be fulfilled unless the cryptocurrency can connect to the broader financial system, such as with security and commodity markets.

Connecting Bitcoin to Ethereum-based real-world assets, stablecoins, decentralized finance and nonfungible tokens via the EVM is the first step in that direction, Schroé argued.

“That’s a huge amount of value and development waiting to happen.”

Schroé’s Botanix Labs aims to connect the Bitcoin and Ethereum ecosystems through its “Spiderchain” — a proof-of-stake layer 2 that implements EVM to EVM bridges to enable Bitcoin to interact with the EVM.

Staked assets are secured by a decentralized multisignature mechanism, and its design doesn’t require Bitcoin to be forked.

Schroé believes the current solutions involving wrapped Bitcoin on Ethereum and other EVM-compatible chains are problematic and argues they are susceptible to censorship and regulatory scrutiny, as they’re operated by the centralized United States-based company BitGo.

A similar proposal to bring Ethereum functionality to Bitcoin is also being proposed through “drivechains,” also known as the Bitcoin Improvement Proposal-300, which Bitcoin developers are again discussing. If implemented, it would allow “sidechains” to be built on the network.

On Oct. 9, Bitcoin developer Robin Linus released a white paper titled “BitVM: Compute Anything on Bitcoin,” which details how Ethereum-like optimistic rollup smart contracts could be made on the Bitcoin network.

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Unlike the Spiderchain, BIP-300 would require Bitcoin to soft fork and would be activated by miners — similar to the Taproot soft fork in November 2021 that paved the way for the NFT-emulating Ordinals and BRC-20 tokens.

The BIP’s creator, Paul Sztroc, says those favoring BIP-300 believe it will offer new privacy and scaling use cases to Bitcoin, among other benefits.

However, not everyone likes the idea of expanding Bitcoin’s ecosystem beyond its current use cases.

Cory Klippsten, the CEO of BTC-only exchange Swan Bitcoin, believes drivechains and solutions that bring other assets to Bitcoin will bring an influx of scammers.

Saifedean Ammous, the author of The Bitcoin Standard, opposes the idea of issuing altcoins on Bitcoin, suggesting that “good money” is the only token needed.

However, Schroé said he thinks bringing together Bitcoin and Ethereum could produce a new array of applications “with decentralization and security as first principles.“

“EVM is the winning virtual machine, and Bitcoin is the best money,” he said.

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BIP-300 biff: Debate reignites over years-old Bitcoin Drivechain proposal

Coin Telegraph
BIP-300 biff: Debate reignites over years-old Bitcoin Drivechain proposal
2 way peg

The proposal would allow other blockchains to be built on the Bitcoin network. In August, a core developer rewrote the proposal’s code and requested it be added to Bitcoin’s codebase, sparking new debate over its merits.

A debate has reignited among Bitcoiners over a six-year-old Bitcoin Improvement Proposal (BIP) to add “sidechains” on top of the network, with some warning it could increase scams on the Bitcoin network and others saying it will bring new users of the cryptocurrency.

Meanwhile, one developer claims to have found a way to achieve the proposal’s goal without a soft fork of the blockchain.

The proposal in question, BIP-300 — also known as Bitcoin (BTC) Drivechains — was first introduced in 2017, which proposed introducing “sidechains” that are separate blockchains on top of the Bitcoin network.

Paul Sztorc, the proposal’s author and founder of the Drivechain development firm LayerTwo Labs — which raised $3 million in December — has explained that the blockchains would allow for BTC to move onto them and create altcoins.

The debate over the proposal was kicked up again on Aug. 22, when a Bitcoin core developer known as Luke Dashjr rewrote the proposal’s code and requested to add it to Bitcoin’s codebase.

BIP-300 would require a soft fork of Bitcoin that would be activated by miners — not unlike the Taproot soft fork in November 2021 that paved the way for the equally controversial nonfungible tokenemulating Ordinals and BRC-20 tokens that launched earlier this year.

On Sept. 10, Maxim Orlovsky, the CEO of blockchain scaling solutions project Pandora, posted on X (Twitter) claiming he was able to create a two-way peg on Bitcoin without a soft fork of the blockchain, which BIP-300 requires.

In an accompanying note, Orlovsky explained an old project proposal could work as a BIP-300 alternative with an oracle working to validate a sidechain and “the protocol will reach consensus on whether the state reported by the oracle is correct.”

Details, so far, are sparse. Orlovsky said he would work on a paper describing the setup “in [an] understandable way.”

Meanwhile, BIP-300 proponents, including Sztorc, argue that Drivechains will allow users to choose a blockchain security model they agree with and how they want their Bitcoin to work. Sztorc also claimed the proposal has “enormous upside” with “literally zero downside.”

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Others, including Cory Klippsten, the chief of the BTC-only exchange Swan Bitcoin, rejected the proposal — with Klippsten claiming Drivechains would increase the amount of scams on Bitcoin, which may catch the ire of regulators.

Pierre Rochard, the VP of research at Bitcoin miner Riot Platforms, said the proposal’s messaging relies on “speculative economic arguments rather than substantive engineering ones” and added it was “pure hopium.”

Others who lent their voice to support BIP-300 included educator Dan Held, who claimed that Bitcoin is better off with more speculative assets as they “introduce new audiences to Bitcoin.”

Meanwhile, Bitcoin wallet provider Casa co-founder Jameson Lopp said he’s yet to see a “convincing concern” of how sidechains could be dangerous to the main Bitcoin blockchain.

He added if a sidechain becomes more valuable, it could signal that the base chain “should implement that sidechain’s features.”

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