A new partnership led by the Lightning infrastructure company LNFi plans to accelerate the adoption of the Lightning Network. By leveraging the advancements of new protocols such as Taproot assets And Usthe LN Alliance hopes to mobilize industry partners and contribute to standards around the growing Bitcoin ecosystem. A recent one community discussion organized by UTXO management highlighted the group’s ambition to drive the emergence of this new Lightning-based, interoperable financial market.
Behind this initiative is: Darius from LNFi explained his motivation: “Nowadays the whole Lightning ecosystem is quite fragmented. There are all kinds of standards and protocols. The LN Alliance is just there to put everyone in the spotlight and create enough awareness and awareness for the existing Bitcoin , Lightning and Nostr projects on top of these standards so that we can hopefully move forward as a collective community.”
Additionally, by raising awareness of existing tools and protocols, members of the group aim to reduce duplication of effort, allowing developers to build on what already exists rather than reinventing the wheel.
LN link is one such standard developed and promoted by LNFi and its partners. Built as an extension of Our Wallet Connect (NWC)it allows Bitcoin applications to easily communicate with Taproot Assets, a protocol central to the LN Alliance’s mission
Preparing for Taproot Asset
One of the driving forces behind this union is the rise of Lightning Laboratories‘Tenroot assets. Ryan Gentry from Lightning Labs shared exciting updates on the protocol, revealing that more than 150,000 mints have been executed on the protocol since its launch last October. The upcoming release promises to integrate these assets with the Lightning Network, improving their usability.
Taproot assets are inspired by older concepts like Omni and Counterparty’s colored coins, but have been upgraded for the Taproot era. They enable advanced scripting and off-chain data commit within UTXOs, making them highly scalable without adding blockchain bloat. This architecture enables native composability with existing Lightning infrastructure.
“You can use any existing LND APIs you are familiar with. And suddenly you just have an asset ID parameter to tell the software that instead of sending Bitcoin, I want to send this Taproot asset,” Gentry said.
The goal is to make the issuance and management of assets on Bitcoin more efficient and user-friendly, leveraging the capabilities of the Lightning Network.
By shifting focus to the maturing Lightning Network infrastructure, Tension Director Graham Krizek emphasized the importance of an accessible and reliable network, especially with the potential integration of stablecoins. “Stablecoins on Lightning are a powerful thing that applies to many more people around the world than the network does now.” He emphasized that making the technology easy to use is crucial for wider adoption.
Joltz co-founder Linde Stark shared best practices taken to simplify user interactions with Lightning. Joltz implements zero-confirmation channels and subsea swaps to enable direct transactions between assets and layers without the need for extensive channel management. “We think zero-conf channels are best for the majority of users.”
Jordi, founder of, praised the ability of new Taproot assets to be seamlessly integrated and used for payments FewSats the potential for the Lightning Network to become “a network of networks.”
Banking on Lightning Interoperability
Lightning is increasingly seen as a crucial layer for interoperability, but has recently emerged as the connecting element between the supporting components of the broader Bitcoin ecosystem.
“I think we’re going to see a big trend in the coming years of Lightning swap services communicating with each other, similar to how Bolts is the driving force behind Aqua wallet. Users have funds on Liquid and do not have a Lightning channel at all, but can pass and receive via a Boltz swap service over the Lightning Network,” said Ryan Gentry of Lightning Labs.
Other participants confirmed their expectations that Lightning would become the interoperability layer connecting users and services from other supported networks. Lightning’s network effects are expected to increase as these new environments use it for interoperability. For example, a swap service could manage stablecoin transfers across platforms, simplifying the user experience.
Combining Nostr Wallet Connect and Taproot assets can improve user experiences, allowing users to transact across different asset types without worrying about the underlying complexity. “You can pay an invoice seamlessly, even if the recipient wants a different asset,” says Jordi from Fewsats. This functionality signals a significant evolution of how asset exchange could work, reducing dependence on centralized intermediaries.
Joltz is a company that is actively building the necessary infrastructure to support this interoperability. By developing an SDK that allows wallets to easily integrate with swap providers, Joltz aims to streamline the process of connecting various sidechains to the Lightning Network. Emphasizing the efficiency gains from using Lightning as a central hub. Joltz co-founder Linden Stark noted, “It really doesn’t make sense to integrate each sidechain separately.”
Stimulating financial opportunities
To further the success of the initiative, LN Alliance members discussed ways to incentivize the development of this infrastructure. One of the most common ways to benefit from the economic activity of the Lightning Network is through the revenue opportunities created by routing fees or channel leasing.
Jesse Schraderfounder of Ambassador explained that while routing payment revenues have historically been modest, Taproot’s assets are expected to generate significant volume, increasing the use of scarce liquidity on the network. “We are focused on payment routing and liquidity leasing opportunities.” Amboss’ efforts with their Magma marketplace and Hydro A liquidity management tool aims to simplify liquidity management for traders and improve returns by generating more payment volume through the network.
Ryan from Lightning Labs noted the uneven distribution of revenue from routing fees and emphasized the goal of providing equal access to all participants to earn revenue by routing payments on the Lightning Network. “Taproot assets will introduce new services and opportunities for entrepreneurs,” Ryan noted, predicting that the increased activity of Taproot assets will benefit even those not directly involved with these assets.
Other speakers backed the idea that the new protocol would attract many entrepreneurs to build dynamic ecosystems, especially around stablecoins, that could ultimately stimulate economic activity. Supported by new markets around Taproot assets, new businesses such as swap providers or market making activities can open new revenue streams for Lightning node operators.
The LN Alliance is yet another sign of the growth of the Lightning Network industry. After early headwinds caused by an emerging infrastructure, the introduction of Taproot Assets may mark the beginning of a new era of financialization using Bitcoin’s most proprietary protocol. With an increased focus on interoperability and new financial opportunities, the LN Alliance hopes to grow the economic pie and pave the way for more vibrant and efficient Bitcoin financial markets.