Lightning Network Hits Record Capacity As Exchange Adoption Surges
The Lightning Network, Bitcoin’s layer-2 scaling solution, has set a new all-time high in capacity, surpassing 5,600 BTC in December 2023—worth around $490 million—after months of growth driven largely by increased adoption from major crypto exchanges such as Binance and OKX. Despite the decline in the number of active nodes and channels since their 2022 peaks, more Bitcoin has been deployed on the network, indicating greater transactional potential rather than expanded user participation. Functionality has improved, as seen in Lightning Labs’ upgrade of Taproot Assets to version 0.7, introducing features like reusable addresses, transparent asset supply, and support for larger transactions. Taproot Assets allows the minting and transfer of assets, including stablecoins, on the Lightning Network, aiming to leverage Bitcoin’s security and low fees. Stablecoin usage may expand following Tether’s $8 million investment in Lightning startup Speed. Meanwhile, MetaMask added basic Bitcoin support, but not direct Lightning integration. These developments collectively enhance Lightning’s utility and ambitions to become a multi-asset network.
