The first USDT stablecoin transaction on a Lightning Channel took place earlier this week as Synonym introduces broader use cases for Bitcoin.
Bitcoin company Synonym sent the first USDT stablecoin transaction to the Lightning Network earlier this week to demonstrate how Bitcoin and Lightning could be leveraged for cheap and fast issuance and transfer of tokens and credit.
While Bitcoin provides a decentralized and immutable monetary network and Lightning enables the scaling of this system with a payment protocol, Synonym asserts that tokens could bring additional innovation to the ecosystem as they enable the issuance of private credit and reputation in addition to the two robust layers. At the same time, tokens can benefit from Lightning’s instant and low-cost transactions for a better user experience.
“Databases don’t offer the digital support instrument that Bitcoin does,” Synonym CEO John Carvalho said in a statement. Twitter space Friday when asked why implement tokens on Lightning when there are supposedly easier options like databases on centralized servers. He added that the company encourages users and developers to push new technologies and alternatives as Synonym might ultimately settle on the most optimal solution.
Synonym’s current implementation is based on Omni Layer, a decentralized asset protocol for Bitcoin, and OmniBOLT, which transfers functionality from this layer to Lightning channels.
According to Carvalho, an Omni transaction is a Bitcoin transaction with additional metadata, which means it does not require a separate blockchain that alternative asset issuance protocols typically leverage.
The feature is not yet widely available to the public. Paolo Ardoino, CTO of Synonym’s parent company, Tether Holdings, said during the live chat that there is still a lot of work to be done on Omni and OmniBOLT to consider the token-on-Lightning feature ready for release.
Synonym plans to release a mobile wallet and browser extension wallet in the coming months that will support tokens on Lightning and Slashtags, a web-based trust protocol the company launched last year. Finally, a partnership with Blocktank should help Lightning’s liquidity.
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