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name: bitcoin-l2-taproot-assets description: | Taproot Assets (formerly Taro) by Lightning Labs: client-side validation asset protocol on Bitcoin + Lightning. Multi-asset Lightning channels, AddressV2, multi-hop asset routing. USE WHEN: issuing/transferring assets on Bitcoin, integrating asset Lightning channels, evaluating TAP vs RGB. allowed-tools: Read, Grep, Glob

Taproot Assets (TAP)

Lightning Labs' protocol for issuing and transferring assets on Bitcoin and routing them over Lightning. Assets live in Taproot outputs; transfers use client-side validation.

Repo: github.com/lightninglabs/taproot-assets (Go).

Concept

• An asset is "minted" by committing its definition to a Taproot leaf script.
• Asset state lives off-chain in client wallets; chain just commits hashes.
• Transfers reveal Merkle proofs of ownership (similar to RGB's client-side validation).
• For privacy: only the parties involved in a transfer see asset amounts.

Components

tapd (daemon)

Companion to LND. Runs alongside, provides:

• Asset minting RPC.
• Asset transfer handling.
• Address generation (TAP-aware).
• Lightning channel asset support.

Assets

Each asset has:

• Asset ID — derived from minting tx + script.
• Group key — optional, for collections of related assets.
• Universe — the public registry of asset metadata.
• Genesis — initial issuance event.

Lightning integration (v0.6 / v0.7+)

Multi-asset Lightning channels:

• Channel can hold BTC + multiple assets.
• Invoices priced in asset amount; channel routing converts via Lightning's existing path.
• Multi-hop asset payments routed through bitcoin liquidity.

v0.8 features (v0.8.0 June 2026 → v0.8.3 September 2026)

• Wallet backup/restore: three modes — raw (v1, complete proof files), compact (v2, chain-derivable proof fields stripped and rebuilt on import), optimistic (v3, no proofs at all, refetched from a universe federation server on import). Covers the Taproot Assets layer only; a restore still needs the matching lnd wallet.
• Orphan-UTXO garbage collection: tombstone and burn outputs are swept on every burn, transfer and AnchorVirtualPsbts. On by default; disable with wallet.disable-sweep-orphan-utxos.
• Asset forwarding history: routing nodes log asset forward events and query them with tapcli rfq forwardinghistory. Wants lnd started with --store-final-htlc-resolutions for full coverage.
• RFQ limit orders: quotes carry limit prices (asset_rate_limit) and minimum fill sizes (asset_min_amt / payment_min_amt), an execution policy (IOC by default, or FOK), and a negotiated fill quantity in the accept message.
• PortfolioPilot: RFQ pricing, hedging and acceptance policy can be delegated to an external service via experimental.rfq.portfoliopilotaddress.
• Burn by group key: tapcli assets burn --group_key burns units across every issuance in a group.
• Auth-mailbox cleanup: messages whose claimed outpoints are spent are deleted server-side; receivers can call RemoveMessage.
• v0.8.1 (Aug 2026) added ListInvoices / ListPayments and the streaming SubscribeInvoices / SubscribePayments / TrackPayment RPCs on the TaprootAssetChannels service. v0.8.2 (Aug 2026) and v0.8.3 (Sept 2026) are fix and performance releases (MS-SMT proof verification, universe federation push, RFQ/HTLC races).

v0.8 breaking changes

• RFQ option experimental.rfq.skipacceptquotepricecheck renamed to experimental.rfq.skipquoteacceptverify.
• BurnAssetRequest now identifies the asset with an AssetSpecifier (asset ID or group key); the old asset_id / asset_id_str oneof fields and the singular burn_proof response field are deprecated in favour of repeated burn_proofs.
• universe.multiverse-caches.proofs-per-universe removed in favour of universe.multiverse-caches.max-proof-cache-size, which bounds the proof cache by memory (e.g. 64MB) rather than proof count.
• Every v0.8.x release ships a one-way DB migration: downgrading to an earlier tapd is not supported. Back up the tapd database first.

v0.7 features (November 2025)

• AddressV2: static, reusable Taproot Assets addresses with grouped assets and zero-amount-friendly support.
• Set-and-forget asset layer: minting + LN integration unified workflow.

v0.6 features (June 2025)

• "Decentralized FX": Lightning routes assets via BTC, enabling cross-asset payments with conversion at routing nodes.

Compared to RGB

Aspect	Taproot Assets	RGB
Backing	Lightning Labs	LNP/BP Standards Association
LN integration	Native (tapd + LND)	rgb-lightning-node
Asset model	Single-issuer + multi-issuance	Schema-based, contracts
State validation	Sparse-merkle commitments	Client-side validation
Maturity	v0.8.3 production (Sept 2026)	rgb-lightning beta (as of late 2025)
LND ecosystem	Tight	Loose

Use cases

• Stablecoins on Bitcoin — Tether announced USDT-on-TAP roadmap.
• Tokenized funds / securities — regulated asset issuance.
• Reward points / loyalty tokens with LN spendability.
• NFT-like collectibles — though not the primary focus.

API

# Mint an asset
tapcli assets mint --type normal \
  --name "USDC-Test" --supply 1000000 --meta "..."

# Generate receive address
tapcli addrs new --asset_id <id> --amt 1000

# Send asset
tapcli assets send --addrs <recipient_addr>

# Lightning asset invoice
tapcli ln invoice --asset_id <id> --amount 100

Universe

Asset metadata + proofs are published to universes — server-side indexers that act as discovery layer:

• Public asset registries (Lightning Labs runs one).
• Per-issuer universes.
• Federated universes (multiple servers cross-replicate).

Wallets query universes to verify asset existence and lookup metadata.

Implementation status

• tapd — production for asset issuance + transfer (mainnet).
• LND integration — production for asset Lightning channels. tapd v0.8.3 (Sept 2026) builds against lnd v0.21.3-beta.
• Wallets:
  • Lightning Labs' Lit (Lightning Terminal) — UI.
  • Stripe's BTCPay integration — partial.

Common bugs

• Asset proof validation requires complete history; missing proof fragment = unable to verify.
• LND + tapd version mismatch → channel asset features fail (tapd v0.8.3 tracks lnd v0.21.3-beta, Sept 2026).
• Downgrade hazard: every v0.8.x release applies a one-way DB migration. Rolling tapd back to an earlier version after upgrading is unsupported — snapshot the DB before you upgrade.
• Universe sync delay → outdated metadata in wallet.

See also

• rgb/SKILL.md
• liquid/SKILL.md
• ../../lightning/lnd/SKILL.md
• ../../libraries/tapd-go/SKILL.md