# Taproot Assets

The Taproot Assets Daemon `tapd` implements the
[Taproot Assets Protocol](https://github.com/Roasbeef/bips/blob/bip-tap/bip-tap.mediawiki)
for issuing assets on the Bitcoin blockchain. Taproot Assets leverage
Taproot transactions to commit to newly created assets and their
transfers in an efficient and scalable manner. Multiple assets can be
created and transferred in a single bitcoin UTXO, while witness data is
transacted and stored off-chain.

## Features

- Mint and burn assets
- Synchronize to universes
- Send and receive assets
- Export and import Taproot Asset proofs
- Create and manage CLI profiles

## How It Works

When minting a new asset, Taproot Assets will generate the relevant
witness data, assign the asset to a key held by you and publish the
corresponding bitcoin UTXO -- the minting transaction.

The outpoint this minting transaction consumes becomes the
`genesis_point` of the newly minted asset, acting as its unique
identifier. Assets can be spent to a new recipient, who provides the
sender with the necessary information encoded in their Taproot Asset
address.

To transact assets, the witnesses in the prior transaction are
recommitted into one or multiple taproot outputs while the necessary
witness data is passed to the recipient. Similar to bitcoin
transactions, the remaining balance is spent back to the sender as a
change output.

[Learn more about the Taproot Assets Protocol.](https://docs.lightning.engineering/the-lightning-network/taproot-assets)

## Architecture

Taproot Assets are implemented as the Taproot Assets Daemon `tapd`
and the Taproot Assets Command Line Interface `tapcli`. Additionally,
`tapd` exposes a gRPC interface to allow for a direct integration into
applications.

Taproot Assets leverage several `lnd` features including the Taproot
wallet and signing capabilities. These facilities are accessed through
`lnd`’s gRPC.

### The Taproot Assets Stack

`Bitcoin blockchain backend <-> lnd <-> tapd`

Custody of Taproot Assets is segmented across `lnd` and `tapd` to
maximize security. `lnd` holds the private key, which has had a taproot
tweak applied to it, controlling the Bitcoin UTXO holding the Taproot
Asset. The taproot tweak on the other hand is held by `tapd`. This
increases the requirements for asset recovery as both the internal key
as well as the taproot tweak are necessary to spend the output. This
prevents `lnd` from accidentally burning Taproot assets.

## Prerequisites

Taproot Assets require [lnd](https://github.com/lightningnetwork/lnd/)
version `v0.20.0-beta` or later to be synced and running on the
same Bitcoin network as Taproot Assets (e.g. regtest, simnet,
testnet3). RPC connections need to be accepted and a
[valid macaroon](https://docs.lightning.engineering/lightning-network-tools/lnd/macaroons)
needs to be present.

```shell
$ git clone https://github.com/lightningnetwork/lnd.git
$ cd lnd
$ make install tags="signrpc walletrpc chainrpc invoicesrpc"
```

## Installation

### From Source

Compile Taproot Assets from source by cloning this repository.
[Go version 1.24](https://go.dev/dl/) or higher is required.

```shell
$ git clone https://github.com/lightninglabs/taproot-assets.git
$ cd taproot-assets
$ make install
```

## Initialization

Run Taproot Assets with the command `tapd`. Specify how Taproot Assets
can reach `lnd` and what network to run `tapd` with by passing it
additional flags. The Bitcoin backend and `lnd` need to be running and
synced before the Taproot Assets daemon can be started.

```shell
$ tapd --network=testnet --debuglevel=debug \
    --lnd.host=localhost:10009 \
    --lnd.macaroonpath=~/.lnd/data/chain/bitcoin/testnet/admin.macaroon \
    --lnd.tlspath=~/.lnd/tls.cert
```

## Usage

See a full list of options by executing:

```shell
$ tapd --help
```

Use `tapcli` to interact with `tapd`:

```shell
$ tapcli assets mint --type normal \
    --name fantasycoin --supply 100 --meta_bytes "fantastic money"
$ tapcli assets mint finalize
$ tapcli assets list
```

Synchronize yourself with a universe, for example the one running as
part of the issuer's `tapd`.

```shell
$ tapcli universe sync --universe_host testnet.universe.lightning.finance
```

Add multiple universes to your local federation to always stay up
to date. You can also use the universe to query existing assets and
their metadata. You may also configure your tapd instance to listen
to incoming requests with `--rpclisten 0.0.0.0:10029` to run your own
universe.

```shell
$ tapcli universe federation add \
    --universe_host testnet.universe.lightning.finance
$ tapcli universe roots
```

Once you have obtained the necessary proofs and asset IDs, you can
generate a Taproot Asset address for a specific asset and amount.

```shell
$ tapcli addrs new --asset_id bab08407[...]129bf6d0 --amt 21
```

The sender can now fulfill the request by initiating the transfer:

```shell
$ tapcli assets send --addr taptb1q[...]tywpre3a
```
## Development

### API

Taproot Assets exposes a gRPC (port 10029) and a REST
(port 8089) API. Connections are encrypted with TLS and
authenticated using macaroons. The API is documented
[here](https://lightning.engineering/api-docs/api/taproot-assets/), and
further guides can be found
[here](https://docs.lightning.engineering/lightning-network-tools/taproot-assets).

### Mainnet

`tapd` has supported mainnet since version `v0.3.0`.

**IMPORTANT NOTE**: To avoid loss of funds, it's imperative that you read the
[Operational Safety Guidelines](docs/safety.md) before using `tapd` on
mainnet!

The daemon is still in `alpha` state, which means there can still be bugs and
not all desired data safety and backup mechanisms have been implemented yet.

#### Important Note for Umbrel and Lightning Terminal Users

**DO NOT UNDER ANY CIRCUMSTANCE** uninstall (or re-install) the "Lightning
Terminal" app without first making a manual backup of all local `tapd` data,
if you are using Taproot Assets as part of the "Lightning Terminal" app with
Umbrel -- or any comparable node-in-a-box solution.  Uninstalling Umbrel apps
deletes application data. This Taproot Assets application data encumbers
Taproot Assets **AND** bitcoin funds. Receiving and sending `tapd` assets
updates the daemon's funds-custody material. Merely having the `lnd` seed phrase
is **NOT** enough to restore assets minted or received.

**WITHOUT BACKUP BEFORE DELETION, FUNDS ARE DESTROYED**.

## RFQ and Price Oracle System

Everything related to the RFQ (Request For Quote) system, the asset's currency
precision (decimal display) and the RFQ price oracle can be found in
[this document](./docs/rfq-and-decimal-display.md).

## Bug Reports and Feature Requests

Please use the [GitHub issue tracker](https://github.com/lightninglabs/taproot-assets/issues)
to report bugs, or to request specific improvements.

## Join us on Slack

Join us in the [Lightning Labs Slack](https://lightning.engineering/slack.html)
and join the `#taproot-assets` channel to ask questions and interact
with the community.