Author: Prayank 2021-10-15 14:47:56
Published on: 2021-10-15T14:47:56+00:00
Asset issuance on the Lightning Network is a topic of discussion in an email exchange between Prayank and ZmnSCPxj. Prayank asked if it is possible to issue assets on LN and what the process is. He also mentioned Omni BOLT as a potential solution but was unsure about its status. Use cases for tokens on Lightning include DEX, stablecoins, and liquidity improvement. ZmnSCPxj mentioned plans for RGB colored coin project to be compatible with Lightning so that channels could be denominated in an issued asset. However, this complicates channel gossip and colored coins would need to be provable as existing to any node on the LN. Blockstream plans to include support for Liquid-issued assets in C-Lightning. The assumption is that there would be a Lightning Network where channels have different asset types and you can forward via any channel, suffering some kind of asset conversion fee if you have a hop where the incoming asset is different from the outgoing asset. However, the American Call Option problem may make issued assets unusable on Lightning even if someone makes the work to make non-Bitcoin assets on Lightning channels. Some solutions to the problem include trust-requiring solutions, Ethereum-based solutions, and Barrier Escrows.
Updated on: 2023-06-03T06:22:15.537402+00:00