Lightning Labs team plans to allow BRC-20 token integration on Lightning Network.
On May 16th, Lightning Labs, a firm developing the Lightning Network infrastructure, presented an updated version of the Taproot Assets Protocol.
The development is set to provide Bitcoin (BTC) users with a potentially more efficient means to create new assets on the blockchain.
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In their blog post, Lightning Labs critiqued the existing methods of recording assets on the Bitcoin blockchain, which they termed "particularly inefficient." They highlighted the issues with protocols that insert asset metadata "directly into block space."
The Taproot Assets Protocol aims to function primarily off-chain, helping to alleviate network congestion - a problem that has haunted the Bitcoin network since the introduction of the BRC-20 token standard on March 8th.
The company suggested that, with this protocol, users could soon integrate BRC-20 assets into the Lightning Network. This would allow wallets, exchanges, and merchants to be transitioned to Lightning Network, eliminating the need to build a new ecosystem from the ground up.
In the past, BRC-20 developer Domo declared the Taproot Assets Protocol as a superior solution for creating new assets on Bitcoin, compared to existing methods like JavaScript Object Notation (JSON). This is due to its ability to facilitate easy transfers to the Lightning Network for "fast and cheap transactions."
The majority of BRC-20 tokens created to date have used Ordinal inscriptions of JSON data for deploying token contracts, minting tokens, and executing transfers. This approach has been criticized by developers due to its high transaction fees, which are reportedly four times higher than simply using binary.
The total value of BRC-20 tokens briefly exceeded $1 billion on May 9th but has since fallen to $500 million, marking a nearly 50% decrease.
