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The Lightning Lab · Aug 12, 2025

Summer of Lightning: From Billions to Trillions with Bitcoin and Stablecoins ☀️😎⚡

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Ryan Gentry · The Lightning Lab

Welcome to the latest edition of the Lightning Lab 🧪newsletter! 2025 started off with a bang as Tether announced they are bringing USDT to bitcoin, and the outlook for the Lightning Network has only gotten stronger as the summer has gotten hotter. In this edition, we cover how Lightning has 1000xd in volume terms over the last several years, and how stablecoins will be the catalyst behind its next phase of exponential growth.

Earlier this summer, Lightning Labs CEO Elizabeth Stark spoke at the Bitcoin Conference in Vegas, and said:

“A couple of years ago… Lightning annually was doing tens of millions [of USD] in volume… today we’re doing tens of billions, and soon we’re going to be at tens of trillions. We 1000xd in a matter of a couple of years.”

That comes as no surprise to those of us who have been building out the technology and onboarding users these last several years, and who believe in the network effects of the Lightning Network. And with the advent of vibe coding, more people can build Lightning apps democratizing adoption worldwide, including Lightning Labs board member Brian Murray!

Today, Lightning has grown into the default payment rail for bitcoin, as evidenced by the recent launch of bitcoin payments from the popular American franchise Steak ‘N Shake only supporting Lightning instead of including an on-chain payment option. Their CEO shared the reason why at Bitcoin Vegas: after launching Lightning payments at over 400 restaurants worldwide, they’re saving 50% in processing fees by accepting bitcoin over Lightning, with settlement times much faster than credit cards. And just this past Friday, they attributed 10.7% Q2 growth in same-store sales to the addition of Lightning payments!

Not to be outdone, Block announced at Bitcoin Vegas that not only are 25% of Cash App’s outbound bitcoin transactions now happening over Lightning, but they’re bringing Lightning payments to all 4M Square merchant Point-of-Sale terminals after piloting the Lightning payments acceptance tool at The Bitcoin Conference all week. By the end of July, according to Block’s Head of Business Owen Jennings, they had already begun onboarding Square merchants to Lightning payments! This is enormous news for merchant adoption, as it will allow Square PoS users to increase their margins without changing their operations, simply by cutting out the fees of rent-seeking middlemen card networks.

Block also shared that their Lightning routing node, c=, is earning 9.7% annual yield on millions of dollars of bitcoin liquidity. Importantly, this is non-custodial yield in native bitcoin, which does not come with the substantial, compounding risk of yield products on other chains that involve custodians wrapping bitcoin into non-native environments and smart contract risk for the yield protocols themselves. This may be the biggest proving point to the market that the demand for Lightning payments is outpacing the supply of bitcoin liquidity currently allocated to the network.

And of course, once Tether issues USDT on Taproot Assets, they’ll be bringing as much as $10T in annual volume to the Lightning Network. Read on for more thoughts on that… 💸

Voltage onboarded a host of new companies to the Lightning Network: BitGo, the enterprise-grade multi-sig custodian, Unbank, the bitcoin ATM company with 40k locations in Walgreens and CVS stores, Alt Sigma, a Canadian exchange and payments processor, Amber App, the Australian dollar cost averaging app, Blockware Solutions, who runs a marketplace for bitcoin mining equipment, and finally Taxbit, to offer a Lightning payments solution with full tax + accounting compliance built-in.

Speed officially launched bridged USDC on Taproot Assets for their merchant and wallet users and launched Lightning Address integration for USDT for their Taproot Assets LN users.

Botanix, LNFi Network, and Astra Labs launched a trust-minimized bridge from the Botanix spiderchain to the Lightning Network. With Botanix's recent mainnet launch, users can easily interface with a myriad of Lightning applications, demonstrating the importance of bitcoin interoperability.

DFX Swiss announced that 30 SPAR supermarkets across Switzerland and Liechtenstein are now live with LN payments! SPAR was founded in 1932 and has grown to become the world's largest food retail chain, with over 13,900 stores across 48 countries, bullish!

Braavos Wallet, a self-custodial Starknet wallet, announced their integration of the Lightning Network as an interoperability layer via Atomiq Labs as a swap provider.

Neutron announced that Cobo, the popular digital asset custodian, will use them to integrate LN payments to “power all of Asia”, after separately announcing new support for off-ramping to Chinese bank accounts.

Xverse announced they’ll be integrating LN into their self-custodial bitcoin wallet via Sati and Ibex.

PayPerQ, an AI <> LN startup founded by Matt Ahlborg, announced a $500k fundraise from Initial Capital and Fulgur Ventures to leverage LN to lower the barrier to entry for premium AI. Lightning News later interviewed Matt about PPQ, and how LN enables global, cost effective access to the top AI models.

Amboss launched their Rails product, a self-custodial bitcoin yield service that earns liquidity providers a return on their bitcoin for routing LN payments after releasing a new Liquidity Subscriptions product that allows node operators to pay for automated liquidity provisioning via a monthly subscription, instead of per-use.

The GENIUS ACT became US federal law this summer, establishing a legal framework for stablecoins and stablecoin issuers. There are over $263B of stablecoins issued today, with Tether ($164B) and Circle ($63B) comprising the vast majority of the supply, demonstrating the natural demand around the world for these assets. Now that the GENIUS ACT is law, news is already coming out about other domestic entities looking to join the stablecoin race.

The economic incentive for these additional issuers to get into the market is clear: Tether is likely the most profitable company per employee on the planet, and Circle’s recent IPO performed very well, showing strong public market demand for stablecoins. More USD-denominated stablecoins entering the market from credible issuers does present a UX issue for developers and users however: which USD should they support? In a perfect world, all of these stablecoins would natively interoperate behind the scenes, but on the blockchains people are using today both sender and receiver must trust the same issuer when transacting. In other words, if Alice is paying Bob, she cannot send USDT and have him receive USDC in the same transaction.

Thankfully a better architecture is possible: Taproot Assets on Lightning. With Taproot Assets, all multi-hop Lightning transactions route through bitcoin as the global routing currency, making Lightning a decentralized FX layer for stablecoins on bitcoin. This means that by default, users can spend USDT and the merchant can receive BTC, all natively interoperating within the network, as evidenced by the below Steak ‘n Shake payment:

This will allow more issuers to compete for end users without harming the end user experience. With Square turning on Lightning acceptance for all 4M of their Point-of-Sale terminals, they are also turning on the ability for users to pay with USDT, USDC, JPMcoin, Wal-Martcoin, or any other stablecoin issued on the Taproot Assets protocol… no integration work for Square required! It also means that non-USD stablecoins can leverage the existing bitcoin liquidity in the Lightning Network to be treated as first class citizens, which Lightning Labs Technical Content Lead Leo Weese first wrote about nearly three years ago, and Lightning Labs Head of Product Growth Michael Levin illustrated perfectly earlier this year.

This native interoperability feature of the multi-asset Lightning Network will be a cheat code for adoption. Issuers will value it because it will let their asset compete in the marketplace from an even footing. Users will value it because they won’t be forced by liquidity network effects to trust an issuer they don’t like. Wallets and merchants will value it because they won’t have to integrate hundreds and hundreds of different stablecoins. And Lightning Network routing node operators will value it because they will see their routing fee earnings increase as stablecoins bring LN volume from the billions to trillions. ⚡

In June, we released Taproot Assets Daemon v0.6 which included enhancements and usability improvements to deliver on the promise of making the Lightning Network a decentralized foreign exchange network for Bitcoin. Namely, we enhanced the request for quote (RFQ) feature, which allows for the receiver of the payment to ask the node providing liquidity on Taproot Assets for a time-limited price quote between the relevant asset and bitcoin, to handle larger payments more reliably. This functionality is enabled by allowing receivers to combine the inbound liquidity of multiple edge nodes. Additionally, in this release, developers can use group_key Lightning flows like funding channels, sending, or receiving payments.

Further, we also released the latest major version of LND with v0.19 along with the follow up minor release v0.19.1, which included optimizations for improved LND start time, increased payment reliability, and improvements to the flexibility of co-operative close flows.

Finally, the Lightning Terminal (litd) daemon was updated to include the latest client releases of LND, tapd, and Loop. As always, we encourage builders to update to the latest software versions.

  • Lightning Labs CEO Elizabeth Stark spoke at the Bitcoin Conference about how stablecoins and vibe coding with AI will drive bitcoin adoption, and also said at the Proof of Talk conference in Paris that the Lightning Network will process over ten trillion of dollars of annual volume in the future.

  • Lightning Labs CTO Roasbeef spoke about preparing bitcoin for quantum computing at the Presidio Bitcoin Quantum Summit, and teamed up with Lightning Labs Full Stack Engineer Jason Brill to win the Presidio Bitcoin Hackathon 2025 with Autonomous-Rekt - a tool combining LLM-powered fuzzing with LN. He also sat down with Stephan Livera to dive into all things Bitcoin, Lightning Network and scalability at the Plan B Forum in El Salvador.

  • Lightning Labs Head of LN Liquidity Alex Bosworth spoke on a panel at the Web3 Festival in Hong Kong about the next chapter of the Lightning Network.

  • LL Head of BD Ryan Gentry closed out OPNEXT 2025 with a panel discussing “Where do we go from here?” alongside Casa CTO Jameson Loop, and Foundry Digital’s Jay Beddict. He also joined a Twitter Space with Botanix and LNFi to discuss Lightning as an interoperability layer.

  • Lightning Labs Head of Product Growth Michael Levin highlighted Lightning Labs’s automated node stack - Auto-Open, Auto-Fees, and Auto-Loop - that helps node operators focus their time and energy on building, instead of managing their node.

  • Lightning Labs Developer Advocate Hannah Rosenberg spoke on a panel about Blockchains as a Pillar of the New (Financial) Infrastructure at Fintech Summit Americas in Mexico City. She also released an article in Bitcoin Magazine’s physical Lightning Issue magazine.

Are you passionate about bringing bitcoin to billions? Does building the internet of money with incredibly talented people excite you? We are hiring for a number of roles across the company.

These roles include Senior Security Engineer, Assets Protocol Engineer, Cryptographic Protocol Engineer, Lightning Infrastructure Engineer, and more.

Join us in making magic internet money a reality! 🧙‍♂️

Want to get involved? Join the LND Developer Community on Slack.

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