The Lightning Network (LN) has been successful in addressing the issue of congestion in the Bitcoin network by allowing off-chain BTC transactions. However, the emergence of Ordinals and BRC-20 tokens has caused the problem to resurface as these assets can only be mined and exchanged on-chain.
To address this issue, Lightning Labs has launched Taproot Assets v0.2, which enables assets to be issued on both Bitcoin and Lightning Network, allowing tokens mined on the Bitcoin network to be moved to LN. This new protocol could lead to the creation of decentralized stablecoins and exchanges on LN.
As Bitcoin's blockchain becomes more congested, layer-2 solutions like LN are expected to become the primary solution for off-chain transactions.
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