🥕What is Taproot Assets?

Taproot Assets is a new Taproot-powered protocol for issuing assets on the bitcoin blockchain.

Taproot Assets (formerly Taro) is a new Taproot-powered protocol for issuing assets on the bitcoin blockchain that can be transferred over the Lightning Network for instant, high volume, low fee transactions.

At its core, Taproot Assets taps into the security and stability of the bitcoin network and the speed, scalability, and low fees of Lightning.

Why is the taproot important?

The answer lies in its dual focus on privacy and efficiency. Before Taproot, it was very simple to distinguish single-signature transactions from multi-signature transactions, which made it easier to track transactions, compromising privacy.

Taproot cleverly blends these transactions together so they are indistinguishable from each other. This enhanced anonymity is an important step towards protecting the privacy of users of the Bitcoin network. Not only does this make it more challenging for third parties to trace transactions back to individual users, but it also adds a layer of security to prevent potentially malicious actors from potentially exploiting transaction data for nefarious purposes.

How Taproot works?

Technically, Taproot incorporates Schnorr signatures, which are a more secure and streamlined alternative to existing ECDSA. This allows for faster batch verification of transactions thanks to the linear nature of Schnorr.

In addition to this, Taproot also introduces a feature called “Merkleized Abstract Syntax Trees” (MAST). MAST allows more complex conditions to be embedded in transactions, but only displays conditions that are met when the transaction is executed. This feature enhances privacy and also reduces the amount of data that needs to be stored on the blockchain.

The settlement and security of assets still rely on the Lightning Network, and the DDEP protocol itself does not issue assets, but only introduces assets to DDEP through the protocol.