The Lightning Network (LN) has set a new all-time high for capacity, helped by adoption by big exchanges and technical improvements.
On 15 December the figure reached 5,606 BTC, surpassing the previous peak set in March 2023.
On 16 December analytics platform Amboss recorded a peak of 5,637 BTC (about $490m). According to 1ML, the current level is 5,287 BTC (~$457.7m).
The sharp rise in November and December followed a year of stagnation. More bitcoin in the network signals demand for faster, cheaper transactions.
The fly in the ointment
Bitcoin Visuals puts the number of active nodes at 14,940, well below the March 2022 peak of 20,700.
The number of payment channels has also fallen from three-year highs—to 48,678.
The data point to a liquidity inflow into LN that is not matched by a corresponding expansion of infrastructure in the form of more nodes and channels.
More firms embrace LN
Amboss stressed that inflows into the Lightning Network have become a broad-based trend rather than the actions of a few participants.
Analysts reckon the surge is driven by big exchanges. In particular, Binance and OKX have materially increased liquidity in the micropayments network this month.
The issuer of stablecoins, Tether, led an $8m funding round for start-up Speed. The team will use the proceeds to launch stablecoin payments via LN.
Meanwhile the popular Web3 wallet MetaMask added bitcoin support. Transactions use the SegWit address format.
Taproot Assets
The Lightning Labs team released an update to the Taproot Assets protocol. Key changes in v0.7: support for reusable addresses, tools for full issuance audits and improved transaction stability.
The solution enables the issuance and management of financial assets such as stablecoins on the blockchain of the original cryptocurrency. Taproot Assets combines bitcoin’s reliability with the Lightning Network’s efficiency, creating an alternative to stablecoins on centralized platforms and offering instant, low-fee transfers in a secure environment.
The new functionality allows users to verify the volume of issued assets independently, removing the need to trust third parties.
Lightning Labs believes that with the upgrade the bitcoin–LN tandem is gradually turning into a global network supporting multiple assets.
“With this release, we are laying the foundation for a trillion in turnover,” the developers said.
In May, fintech company Revolut launched LN payments.