Lightning Labs on Wednesday released the first version of the Taro open-source software to enable the minting, sending, and receiving of assets on the Bitcoin blockchain.
The alpha version of the Taro daemon allows developers to issue tokens on testnet, an alternative Bitcoin blockchain specifically designed for public testing. It allows developers to test applications with testnet coins instead of actual BTC with the added benefit of not exposing the actual Bitcoin blockchain (mainnet) to any risk. Projects usually only go live on the mainnet after extensive testing and bug fixes.
Lightning Labs said in a statement that Lightning Network integration, a major Taro feature for instantly sending and receiving assets, will be enabled in a future development phase. The feature requires Taproot channels to be first merged into the company’s lighting implementation (LND), which is currently a work in progress.
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In the meantime, the company said it is working on adding “universe functionality” to Taro’s daemon, which will allow users and asset issuers to provide evidence on the provenance of assets. assets and supply issuance, as well as interact more easily with asset data. Universes will be added to the demon in the coming months, along with other improvements.
How Taro Works
Announced in April, Taro relies on Taproot, the latest major Bitcoin update that went live last year, to enable the issuance of assets privately and securely without bloating the Bitcoin blockchain. Lightning Labs’ proposal differs from most existing alternatives for the Bitcoin asset use case in that it does not require a separate blockchain or rely on adding additional data directly to the chain.
Under the hood, Taro brings assets to Bitcoin through the “leaves” of the Taproot script tree, as each leaf in the tree is completely independent and can be selectively revealed, allowing for structured engagement. By adding information about these assets (known as metadata) into the Taproot script tree, the proposed protocol can work as a layer built on top of Bitcoin, allowing Taro asset transactions to look like transactions. Regular bitcoins –– as only the Taproot output is revealed on-chain –– while allowing evidence of asset movement on the transaction graph.
A Taro asset is issued via an on-chain Bitcoin transaction that includes the hash of (commits to) certain metadata in a Taproot output. Taro assigns the asset to a private key held by the issuer and broadcasts the transaction to the network. The newly created Unspent Transaction Output (UTXO) then acts as a unique identifier for that asset, serving as the genesis point. Multiple asset mints can be performed with a single Bitcoin transaction, and once Lightning integration is enabled, the technology will benefit from instant second-layer network transfers to send and receive assets cheaply and efficiently.
For more information on Taro, see this explainerofficial documentation and BIPs.
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