Bitcoin will be backed by an open source project called "Taproot Asset Representation Overlay" or Taro for short, powered by the Lightning network.
Introducing Taro, Lightning Labs co-founder and CEO Elizabeth Stark announced that thanks to this new project, new assets such as stablecoins can be added to the Bitcoin Blockchain.
In his statement, Stark said that with Taro, the functionality of BTC will increase, and this is possible thanks to the Taproot update, which was activated last year. With Taproot, there were three new upgrades called Schnorr signatures, Tapscript and Merkelized Abstract Syntax Trees (MAST). Thanks to Taproot, the efficiency, privacy and flexibility of the network increased, but these were added to Bitcoin only if the developers used the tools in question.
Stark claims that thanks to Taro, the Taproot update can be used to its fullest extent.
“With this technology, you could route all the world's currencies through bitcoin. People will be able to seamlessly go between bitcoin and say, a USD stablecoin, or peso, euro, yen, etc. And they can send those globally, instantly and with extremely low fees,”
Ryan Gentry, Lightning Labs Business Development Director, said the following about Taro:
"Powered by Taproot, Taro will place spending conditions on MASTs without the need to disclose all the details on the Blockchain. With the use of MASTs, Taro will bring new assets that can be evaluated like BTC to the Bitcoin Blockchain."
The ultimate goal is to create a frictionless on-ramp to the global economy requiring only a mobile phone, in order to include as many people as possible in the process.
Lightning Labs – which also announced it raised $70 million in Series B funding led by early Tesla and SpaceX backer Valor Equity Partners – says it is releasing the technical spec for the Taro protocol, so that it can incorporate feedback from developers as it continues to build the protocol.