Ryan Gentry, business development leader of the Lightning Labs company, unveiled on April 5 a new protocol identified as Taro which will allow the issuance of digital assets on the Lightning network, for example, stablecoins.
Through a post by BlogGentry explained that the new protocol will be used to issue and transmit currencies backed by the US dollar, for example, or other types of tokens.
It is a process that the developer defines as the “bitcoinization of the dollar”. Taro is based on the Lightning Network, a network of payment channels built on the base platform of Bitcoin that forms a second layer or “layer two” where a variety of functions can be performed.
On this layer is that small payments with BTC (or fractions of the cryptocurrency) are being sent and received without intermediaries, and faster and cheaper than in the main network, due to lower commissions.
But now, through the new implementation, the functions of this network they extend to other tokens, such as stablecoins.
Thus, It will be possible, on the Lightning network, to exchange bitcoin for any stablecoin backed by dollars, euros or other currencies. These operations will be able to be executed quickly on a global level.
Consequently, “Taro allows developers of digital wallets to offer users a balance denominated in USD and a balance denominated in BTC (or any other asset)”, according to the writing.
The idea with Taro is to offer a greater variety of options to who use both Lightning and stablecoins. It is hoped that more people will be able to use Bitcoin technology more easily as the adoption of Lightning wallets grows.
For the development of the protocol, it was possible to raise the sum of USD 70 million in series B financing.
Accelerate access to bitcoin trading
The goal of the new protocol is give financial access to a greater number of people and achieve an increase in the number and speed of transactions. This taking into account that more and more Latin American communities – among them those of El Salvador, Guatemala, Argentina and Brazil – use this second layer of Bitcoin.
“This is how you want to bring bitcoin to billions,” says Gentry.
For your taro operation take advantage of the Taproot feature, a Bitcoin update available from last November, whose purpose is to increase the privacy, efficiency and capacity of the network to process smart contracts.
Nevertheless, the multiple functions of Taro are yet to be defined in the draft Bitcoin Improvement Proposals (BIPs). The final implementation of the protocol will depend on the resources and tools that the developers can design.
To achieve this goal, the Lightning Labs team is asking the community for feedback on how it works.