After more than a year of tinkering, iterating, simplifying, and
implementing, I'm excited to officially publish (and request BIP numbers
for) the Taproot Assets Protocol. Since the initial publishing we've
retained the same spec/document structure, with the addition of a new BIP
that describes the vPSBT format (which are PSBTs for the TAP layer). Each
BIP now also contains a set of comprehensive test vectors (to be further
expanded over time.

https://github.com/bitcoin/bips/pull/1489

As the complete set of documents is large, we omit them from this email.

The breakdown of the BIPs are as follows:

  * `bip-tap-mssmt`: describes the MS-SMT (Merkle-Sum Sparse Merkle Tree)
    data structure used to store assets and various proofs.

  * `bip-tap`: describes the Taproot Assets Protocol validation and state
    transition rules.

  * `bip-tap-addr`: describes the address format used to send and receive
    assets.

  * `bip-tap-vm`: describes the initial version of the off-chain TAP VM used
    to lock and unlock assets.

  * `bip-tap-vpsbt`: describes a vPSBT (virtual PSBT) which is a series
    custom types on top of the existing PSBT protocol to facilitate more
    elaborate asset related transactions.

  * `bip-tap-proof-file`: describes the flat file format which is used to
    prove and verify the provenance of an asset

  * `bip-tap-universe`: describes the Universe server construct, which is an
    off-chain index into TAP data on-chain, used for: proof distribution,
    asset boostraping, and asset transaction archiving.

Some highlights of the additions/modifications of the BIPs since the initial
drafts were published last year:

  * Test JSON vectors for each BIP document now included.

  * The Universe construct for initial verification of assets, distributing
    asset proofs, and transaction archiving is now further specified. A
    naive and tree based syncing algorithm, along with a standardized
    REST/gRPC interface are now in place.

  * The asset group key structure (formerly known as asset key families) has
    been further developed. Group keys allow for the creation of assets that
    support ongoing issuance. A valid witness of a group key during the
    minting process allows otherwise disparate assets to be considered
    fungible, and nested under the same sub-tree. A group key is itself just
    a taproot output key. This enables complex issuance conditions such as:
    multi-sig threshold, hash chain reveal, and any other conditions
    expressible by script (and eventually beyond!).

  * New versioning bytes across the protocol to ensure extensibility and
    upgradability in a backwards compatible manner where possible. The asset
    metadata format now has been re-worked to only commit to a hash of the
    serialized meta data. Asset metadata can now also have structured data,
    key-value or otherwise.

  * Observance of re-org protection for asset proofs. The file format now
    also uses an incremental hash function to reduce memory requirements
    when added a new transition to the end of the file.

  * Specification of the vPSBT protocol [1] which is the analogue of normal
    PSBTs for the TAP layer. The packet format specifies custom key/value
    pairs for the protocol describes an aggregate TAP transaction. After the
    packet is signed by all participants, it's "anchored" into a normal
    Bitcoin transaction by committing to the resulting output commitments
    and witnesses.

We've also made significant advancements in our initial implementation [2],
with many wallets, explorers, services, and businesses working with us to
test and iterate on both the protocol and the implementation. We're actively
working on our next major release, which will be a major milestone towards
the eventual mainnet deployment of the protocol!


-- Laolu

[1]: https://lightning.engineering/posts/2023-06-14-virtual-psbt/
[2]: https://github.com/lightninglabs/taproot-assets