By EZ in Releases — Oct 28, 2024

Lightspark Introduces Spark: Statechain-inspired Solution for Scaling Bitcoin

Lightspark, a startup aimed at facilitating Lightning Network adoption by enterprises, announced the launch of an alpha version of Spark, a statechain-inspired, trust-minimized solution designed to scale Bitcoin and extend the Lightning Network.

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"Spark is a new, payments-focused, high-performance, massively scalable Bitcoin L2. It extends Bitcoin and Lightning and enables non-custodial wallets to send and receive payments in real-time at virtually no cost. It’s early days for Spark, but we’re confident it’s the missing piece for Bitcoin to win at becoming the standard open protocol for money on the internet," announced Lightspark.

Spark is a Layer 2 Bitcoin protocol using statechain technology for off-chain transfers via private keys. It also employs atomic swaps, enabling instant, fee-free Bitcoin UTXO transfers.
Spark also supports issuing and using stablecoins, which can be transferred from Taproot assets, LRC-20, or RGB on the base layer. All assets on Spark are all UMA enabled.
The solution is interoperable with the Lightning Network and aims to make it easier to onboard new users to non-custodial layers of Bitcoin.
Per Lightspark, the protocol is not 100% trustless 'on day one' as Spark Operators play a critical role to facilitate fund transfers on the network.

"It's important to understand that the trust model in Spark is time-bound and specific to each transaction. In a non-threshold setting, the system requires only 1 honest operator out of nn participants at the time of transaction. With a threshold configuration, this increases to a minimum number of honest operators, represented by ((n−threshold)+1)/n((n−threshold)+1)/n, which is still a minority of SOs. Crucially, once a transaction is complete, the risk dissipates."

The company also revealed that later this year, it will launch two new Spark-related products:
- Wallet-as-a-Service: A platform that enables developers to build quick, affordable, self-custody wallets that are fully compatible with Lightning and support assets such as stablecoins.
- Stablecoin Issuance: A platform allowing stablecoin issuers to launch their stablecoins on Bitcoin, the largest and most secure cryptocurrency network.

"We’re building Spark with a clear purpose to make it as trustless and open as possible. This means committing to building Spark in public. It will be open source, and available for anyone to contribute to or audit on GitHub," added the firm.

You can find a technical overview of Spark here.

Key features

NOT 100% trustless on day one.
Native BTC.
Full self-custody.
Instant settlement.
Low fees.
Native tokens (e.g. stablecoins).
Native Lightning interface without needing to run a Lightning node.
Ability to scale to billions of users.
1/n trust assumptions (or minority/n) with the risk only at the time of transfer, not in perpetuity.
Unconditional unilateral exits.
Capital efficiency (no pre-funding, liquidity lockups, etc.).
Exists without the need for a new Bitcoin OPcode or any Bitcoin changes (although improves when they're available).

Lightspark also announced the launch of UMA Request, UMA Auth and Lightspark Extend:
- UMA Request. "With just a few taps, merchants can seamlessly request payments from any UMA-enabled wallet. This will unlock e-commerce, B2B invoicing, and simple P2P money requests across currencies, payment systems, wallets, and banks," said Lightspark.
- UMA Auth. UMA Auth functions like OAuth for financial transactions. Using Nostr Wallet Connect, it facilitates two-way connections between user wallets, platforms, and services. It allows for push/pull delegation with user-defined limits, enabling both subscription and recurring payments.
- Lightspark Extend. Extend is a new business solution enabling Lightning and instant payments to eligible US account holders. This compliant, low-cost, 24/7 integration allows UMA and Lightning-enabled wallets , exchanges, or bank accounts to send Bitcoin payments. Lightspark Extend will be available in the US and Mexico by year-end, with Brazil to follow shortly.