Γεια σας! Welcome to the 37th edition of Latest Strikes, your weekly recap of everything that happened in the Lightning world last week. I'm currently on vacation in Crete, and hence writing this newsletter between two hikes and a cocktail with a view, hence why it is a bit more concise and comes a bit later than usual. Still, I really hope you'll like it and find it useful. Let's find out what happened in Lightning last week!
Lightning Labs released the version 0.2 of its Taproot Assets protocol, formerly known as Taro. This new release brings improvements to the developer experience and the on-chain space usage, with new features such as vPSBT ("virtual partially signed Bitcoin transactions) and the ability to perform actions on multiple assets in only one on-chain transaction ; as well as APIs for Universes (basically, where the data regarding a specific asset can live, off-chain).
Taproot Assets, like other protocols such as RGB, takes a completely different approach to tokens on Bitcoin than the current en vogue Ordinals and Stamps protocols. Where the latter are by essence very hungry for on-chain space and don't scale very well, the former are designed precisely to handle as much things as possible off-chain, and use on-chain space as efficiently as possible.
On top of that, both Taproot Assets and RGB are built with Lightning strongly in mind, and Taproot Assets on Lightning are around the corner with the incoming support for unannounced Taproot channels in the next LND release. Really looking forward to that!
Lightning infrastructure provider Lightspark published a wallet SDK, which enables businesses to give their customers access to the Lightning Network in an easy way (but with all the tradeoffs of using Lightspark, which we covered here). Lightspark founder David Marcus also shared some updates, with Middle Eastern Bitcoin exchange Rain integrating Lightspark's solution, as well as some frowned upon partnerships with surveillance companies such as Chainalysis.
I think I've made my stance regarding privacy's foremost importance quite clear in previous issues and, while I understand the compliance requirements companies need to observe to operate in a regulated environment, I completely get why such a partnership is frowned upon in the community - actually, I'm a frowner myself. We don't have the exact details of what this partnership entails exactly, but I really believe we should strive to protect Lightning users privacy as much as possible. That's already what's being worked on at the protocol level (with things such as path blinding), and it should remain centric in application and business development too.
So while it's very cool to see more exchanges, merchants (and hence users) adoption of Lightning thanks to very seamless solutions such as Lightspark's, I just hope it will not be at the expense of Bitcoin core values of privacy and permissionlessness.
Zebedee Opens To The World
Bottlepay Shuts Down
Bottlepay announced it will shut down its consumer facing services on Monday 24th July 2023. The app was known for providing an easy on-ramp to Bitcoin and Lightning from euros or pounds, as well as criticized by some for its heavy KYC. It was acquired by NYDIG back in October 2021 for a whopping $300M, after having previously closed due to regulation in 2019 and opening again in 2020. Is this really the end for Bottlepay?
Strike Expands To 65 Countries, Moves HQ To Bitcoin Country
Strike announced its expansion to 65 countries, the relocation of its headquarters in El Salvador, as well as revamped app with smoother onboarding and LNURL support.
Azteco Raises $6M ; River $35M
Two Lightning companies raised some money last week! Azteco, which enables people around the world to buy Bitcoin vouchers than can be redeemed to a Lightning wallet, raised 6 million dollars in a round led by Jack Dorsey.
River, which unveiled its Lightning offering back in October 2022 raised $35M in a Series B led by Kingsway Capital. This funds will notably help River expand its Lightning services, which gain traction amidst high on-chain fees.
Wallets & Tools
There is a new non custodial Lightning wallet in town! EttaWallet is an open source mobile wallet based on the Lightning Dev kit (LDK), inspired by the Bitcoin Design "Daily Spending Wallet" reference design, and hence with a sharp focus on usability. The wallet packages a real mobile Lightning node, and users can open their own channels or get just-in-time channels automatically from an LSP. The project is still in the early stage, so like always be extra cautious with the funds you deposit in the wallet, but it definitely looks very fresh and promising!
Another cool thing about EttaWallet is its story. I recommend giving this blog post a read, but one thing I found interesting is how it greatly illustrates the power of open source. EttaWallet builds upon the LDK and Synonym's React Native LDK library, and in turn Collin (EttaWallet's developer) open sourced his work, including some very useful UI library he wrote for his own project.
New Core Lightning App In Umbrel
Umbrel Core Lightning users rejoice! The new Core Lightning app for Umbrel is here, with a very nice user interface enabling node runners to easily manage their node. Looking very, very good!
Mempool Transaction Accelerator
Mempool.space unveiled a new tool called Mempool Accelerator. From the mempool.space website, you will soon be able hit the "Accelerate" button on an unconfirmed transaction and pay an additional fee off-band directly to the miners working with mempool.space. I have mixed feeling about this, as this feature, if used at scale, might make it harder to have proper fee estimation and may act as a centralizing force. However, I suspect the Accelerator uses Lightning for payment, and I think it's an interesting use case for the network: paying a small additional fee to bump your transaction without having to create yet another on-chain transaction. Looking forward to hearing more details about this!
Spec & Implems
During the Miami Bitcoin Conference last week Burak finally unveiled his new Layer 2 protocol called Ark, that aims at solving some of the current issues with Lightning, such as the need for inbound liquidity when trying to receive payments, or the strong requirement to have a Lightning node running 24/7 somewhere.
We'll take a closer look at Ark in the next Latest Strikes issue (which should come out next Tuesday), but it definitely looks interesting, although it requires soft forks like CheckTemplateVerify or Anyprevout.
Unjamming Lightning: HTLC Endorsement
As Bitcoin Optech already covered in their newsletter, there has been some discussions last week around the reputation that is currently being researched as a way to mitigate channel jamming. Carla Kirk-Cohen and Clara Shikhelman also put forth a specification proposition, which could be deployed by some node runners in an experimental mode, where the reputation score doesn't actually affects payment forwarding, but where the consequences it would have had are logged for further analysis. This will help fine tune the reputation scheme parameters and evaluate if it works as expected, and where it could be improved.
As a reminder, the idea is that routing nodes will split their channels in two separate buckets: one for endorsed payments, the other for payments for which the reputation is unknown or bad. This will allow nodes to resist DoS attempts and be able to keep on forwarding payments even under attack because they don't have all their liquidity stuck in malicious payments that never settle. Whether a payment is endorsed or not depends on two things: does the node that forwarded it to my node endorses it (by setting a specific field in the HTLC to 1), and do I trust this peer. If both are true, then my node will endorse this payment, allowing it to use the liquidity reserved for endorsed payment, and communicating this endorsement to the next peer in the route (again, by setting a field in the HTLC). This reputation system is hence local and transitive: all my node needs to know about is endorsement from direct neighbors ; and if a payment is not endorsed by someone in the route all subsequent hops will consider the payment as not endorsed.
Channel jamming is currently one of the big challenges that Lightning faces, because it leaves the network exposed to low cost attacks that could really damage the ability of users to transact on the network. We'll keep covering the subject, and take a deep look at the experimentation results when they come out!
Eltoo with MATT
Salvatore (from Ledger) shared a draft on how Eltoo could be achieved using only MATT. I still thing Anyprevout (APO) is the most likely next soft fork to happen on Bitcoin, which should be enough by itself to bring us Eltoo, but it's still very interesting to explore alternative path should another soft fork be favored over APO.
Onion Messages In LND (Kind Of)
If you've been following a bit on the drama in the Lightning community like I do, you've probably noticed that there has been some exasperation around LND presumably not implementing Bolt12 at the same pace as other implementations.
First, I think that's one of the cool things with having multiple implementations: each can prioritize features as they see fit, and users are free to chose the one that best serves their use case. Second, that may not be really true anymore: a lot of the things that Bolt12 is comprised of are already included in LND, and one of the last things that was still missing (Onion Messages) can be run as a standalone daemon on top of LND, thanks to Carla Kirk-Cohen's work. Looks like we're close to getting Bolt12 everywhere, folks!
La montagne énorme s'échoue dans la mer
C'est un monstre mythique!
Nous avons parcouru son échine
Trébuché contre les fragments de ses os usés
Et bu l'eau de son corps qui s'écoule en cascade.