The Segregated Witness soft-fork activated in 2017 was a technical prerequisite for the Lightning Network, which has in turn grown to a capacity that has unleashed a subsequent wave of innovation. Similarly, Taproot (activated in November 2021) sets the stage for another wave. Of note is Lightning Labs’ Taproot Assets Protocol (TAP), facilitating asset issuance directly on the Lightning Network. If successful, TAP would allow the multi-asset reality to not only exist natively on the Bitcoin stack but also inherit the Lightning Network’s speed, very low cost and settlement finality.
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