Original Title: "Taproot Assets: Leading the New Era of Multi-Asset Bitcoin"

Original Source: Yinan's Opinion

What is Taproot Assets

Taproot Assets is a new protocol based on the Bitcoin blockchain. It leverages Bitcoin's latest upgrade - Taproot - to achieve higher privacy and scalability, providing core functionality for developers to issue, send, receive, and discover assets on the Bitcoin blockchain.

Protocol Overview:

Taproot Assets (formerly known as Taro) is a new Taproot-based protocol that allows for the issuance of assets on the Bitcoin blockchain. These assets can be deposited into channels on the Lightning Network and can be transferred through the existing Lightning Network.

The design intention of this protocol is to avoid congestion in the blockchain by allowing the creation and movement of unlimited assets in a single chain transaction.

Privacy and Scalability:

Taproot Assets utilizes the new tree structure of Taproot, allowing developers to embed arbitrary asset metadata within existing outputs. It uses Schnorr signatures to improve simplicity and scalability, and importantly, it can work with multi-hop transactions on the Lightning Network.

Trading and Asset Transfer:

Taproot Assets allows assets to be transferred through on-chain transactions or via the Lightning Network after being deposited into a channel. Participants in the Taproot Assets transfer bear the cost of verification and storage, which is achieved by storing Taproot Assets witness data in local data storage or information repositories called "Universes".

Interoperability with the Lightning Network:

Through Taproot Assets, assets can be stored in Lightning network channels, and nodes can provide atomic conversions from Bitcoin to Taproot assets. This allows Taproot assets to interoperate with the wider Lightning network, benefiting from its coverage and strengthening its network effects.

Other features:

Taproot Assets also allow for atomic swaps between assets and BTC, handling unique and non-unique assets and collections, supporting creative multi-signature and co-signature arrangements, and enabling Taproot asset channels and BTC channels to be created in the same UTXO, allowing Taproot assets to exist on the Lightning network without consuming additional resources.

Taproot Assets 能做什么

translates to

What can Taproot Assets do?

Taproot Assets allows for the creation and exchange of various assets (such as other types of tokens) on the Bitcoin blockchain. Taproot Assets is a great protocol for creating fungible tokens, but currently falls short in implementing non-fungible tokens. Taproot Assets does not rely on Bitcoin as a complete data availability layer (similar to the Lightning Network). Below are some potential use cases:

- Introducing stablecoins on Taproot assets (the main direction emphasized by Lightning Lab).

- Transfer of issuance of other tokens on Taproot assets

- Asynchronous receiving function and one-to-many token sending and transfer in a single transaction.

- Taproot assets + Lightning Network implementation for Bitcoin DeFi use cases.

- And the combination of BRC-20, Atomicals, and proof-of-work mining, and so on.

- Creation and transfer of ERC-721 and ERC-1155 assets (ps: metadata is not stored on the chain)

和其它比特币元协议的异同

Differences between Bitcoin and other blockchain protocols

Taproot assets are similar to Bitcoin meta-protocols such as Ordinals, BRC-20, Runes, Atomicals, TAP, PIPE, or RGB. Taproot assets are fully based on UTXO (just like Runes and PIPE), which means that they integrate well with Bitcoin native technologies such as RGB, Lightning Network, and DLC.

Taproot Assets does not use Bitcoin as a complete data availability layer (like the Lightning Network), which is different from Ordinals, BRC-20, Runes, PIPE, etc. Users store their data by default, or you can add additional trust assumptions through off-chain data storage (called Universe).

In this case, off-chain means storing it on your own machine (which is the default option), or using Universe (essentially an off-chain indexer/data availability layer) to store it. This is also where the risk lies, as if you or a third-party indexer you rely on loses the off-chain data, you essentially lose your tokens.

Taproot assets Progress

During the development of the testnet in the past few months, early adopters and the team have been iterating constantly, forging nearly 2,000 assets on the testnet and synchronizing them with the Universe server. The Universe server is a repository that stores all the information needed for wallet initialization and wallet state download. Specific Taproot assets have been forged over 420,000 times.

Currently, Taproot assets v0.3.0 alpha version is the alpha version of the mainnet. This version is also starting to be backward compatible, which means that the protocol will no longer have any major changes that will affect the issuance of assets on the mainnet.

Due to the fact that Taproot assets do not use Bitcoin as a complete data availability layer, it also relies on the development of third-party storage and indexing, including technical barriers of the Bitcoin protocol, which makes it difficult for many non-technical users to enter the protocol. Currently, participating in Taproot assets requires running a Bitcoin full node/btcd and nodes such as lnd and tapd. Lowering the entry barrier for participation requires the construction of third-party infrastructure, such as wallets and third-party indexers that support Taproot assets, and reducing the conditions for users to run nodes themselves.

Lightning Labs Introduction

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