Author: Alex Schoof 2022-04-07 19:11:39
Published on: 2022-04-07T19:11:39+00:00
Olaoluwa Osuntokun has developed a new protocol called Taro, which enables the issuance of normal and collectible assets on the main Bitcoin chain. The protocol uses Taproot script tree to commit extra asset structured meta data based on a hybrid Merkle tree, referred to as a Merkle Sum Sparse Merkle Tree or MS-SMT. The MS-SMT combines the properties of a merkle sum tree with a sparse merkle tree, enabling easy verifiable asset supply proofs and efficient proofs of non-existence.Taro asset transfers are embedded in a virtual/overlay transaction graph that uses a chain of asset witnesses to provably track the transfer of assets across Taproot outputs. Taro also has a scripting system that allows for programmatic unlocking/transfer of assets. In the first version, the scripting system is a recursive instance of the Bitcoin Script Taproot VM. Future versions of the scripting system can introduce new functionality on the Taro layer, like covenants or other updates. The Taro design also supports integration with the Lightning Network (BOLTs) as the scripting system can be used to emulate the existing HTLC structure, allowing for multi-hop transfers of Taro assets.The Taro protocol proposes to only recognize "assets at the edges" rather than modify the internal network. This means only the sender and receiver need to know about and validate the assets. All asset transfers will utilize the Bitcoin backbone of the Lightning Network, meaning increased demand for transfers of these assets as the edges generate increased demand of LN capacity, resulting in more transfers and more routing revenue for the Bitcoin backbone nodes.The set of BIPs for Taro is a multi-part suite, including the main Taro protocol, the MS-SMT structure, the Taro VM, the Taro address format, the Taro Universe concept, and the Taro flat file proof format. These BIPs can be found in the links provided.In an email to Laolu, Alex asked some questions and shared comments about the Taro protocol. He asked about other mechanisms to commit to a merkle root, the transfer proofs kept off-chain in another file, the issue of conditional transfers in Taro assets, and whether some covenant designs might be useful with Taro. In a separate email, Ruben Somsen expressed concerns about the scripting expectations for this protocol, stating that Taro script fundamentally cannot handle conditional payments. He also discussed issues related to fungible tokens and their histories getting fragmented or linked, which could potentially affect scaling and privacy. Ruben has raised questions about the purpose of the sparse Merkle tree in the design and the transfer of Taro token ownership from one Bitcoin UTXO to another.
Updated on: 2023-06-03T08:07:11.764546+00:00