Bitcoin Protocol Update: Lightning Labs Addresses BRC-20 Issues
Bitcoin (BTC) tickers are down, currently at $27,135. However, users now have a more efficient way to mint new assets on the blockchain, thanks to the updated edition of the Taproot Assets Protocol released by Lightning Labs.
In a blog post on May 16, Lightning Network infrastructure firm Lighting Labs expressed criticism towards the current methods of inscribing assets on the Bitcoin blockchain, describing them as “particularly inefficient.” They specifically pointed out the cumbersome protocols that directly write asset metadata into block space.
The Taproot Assets Protocol has been designed to operate “maximally off-chain” in order to avoid network congestion, which has become a prevalent issue on the Bitcoin network since the introduction of the BRC-20 token standard by anonymous developer “Domo” on March 8.
Lightning Labs announced that Protocol users will soon be able to integrate BRC-20 assets into the Lightning Network seamlessly, with wallets, exchanges, and merchants already in place, eliminating the need to start a new ecosystem from scratch.
Currently, the majority of BRC-20 tokens use Ordinal inscriptions of JSON data for deploying token contracts, minting tokens, and transferring them. However, this method has faced widespread criticism from developers, who argue that it costs four times as much in transaction fees compared to using binary.
The Taproot Assets Protocol is the rebranded version of the original “Taro” protocol. Lightning Labs was compelled to change the name following a trademark infringement suit filed by blockchain development firm Tari Labs on December 8 of last year, which they considered frivolous.
On May 9, the total value of BRC-20 tokens briefly exceeded $1 billion, but it has since decreased to $500 million, representing a drop of nearly 50%.