The layer-2 scaling solution of Bitcoin, the Lightning Network, has set a new record for total capacity as adoption from major cryptocurrency companies increases and technical upgrades continue to roll out.

According to Bitcoin Visuals, Lightning Network capacity climbed to 5,606 BTC on Monday, surpassing the previous peak recorded in March 2023. Data from LN analytics platform Amboss showed an even higher reading of 5,637 BTC on Tuesday, equivalent to roughly $490 million at current prices.

Capacity rose sharply in November and December after a prolonged period of decline earlier in the year, reflecting an influx of Bitcoin being locked into the network to support faster and lower-cost transactions.

At the same time, the number of Lightning nodes stood at around 14,940, down from a peak of roughly 20,700 in March 2022.

The number of payment channels connecting those nodes was also lower, at 48,678 compared with highs seen in 2022. This suggests that while more Bitcoin is being committed to Lightning, overall network participation, measured by nodes and channels, has not expanded at the same pace.

Exchanges and infrastructure providers add liquidity

Amboss noted that the recent increase in capacity is not being driven by a single participant. “It’s not just one company that’s putting more Bitcoin into the Lightning Network; it’s across the board,” the firm said.

The platform highlighted that large crypto exchanges have added significant amounts of BTC to Lightning in recent weeks, contributing to the jump in total capacity.

Broader ecosystem activity has also picked up. USDT stablecoin issuer Tether announced this week that it led an $8 million funding round for Bitcoin startup Speed, which is focused on enabling stablecoin payments over the Lightning Network. Meanwhile, MetaMask rolled out Bitcoin support in its wallet, although it clarified that transactions will use Native SegWit rather than Lightning.

Taproot Assets upgrade expands Lightning’s scope

Further technical progress came from Lightning Labs, which announced an upgrade to Taproot Assets version 0.7. The update introduces reusable addresses, a fully auditable asset supply, and support for larger and more reliable transactions.

Taproot Assets is a multi-asset protocol that allows assets such as stablecoins to be issued on Bitcoin and transferred via the Lightning Network. This approach aims to combine Bitcoin’s security with near-instant settlement and low fees.

Lightning Labs said the new auditable supply feature improves transparency without relying on trust, potentially positioning Bitcoin and Lightning as a broader multi-asset network. “With this release, we are laying the foundation for trillions of dollars to flow on Bitcoin and Lightning.”

Sources:

https://cointelegraph.com/news/lightning-network-capacity-hits-all-time-high-as-major-exchanges-add-more-btc

https://x.com/ambosstech/status/2001059135744627074

https://x.com/ambosstech/status/2001062647438172363

https://x.com/lightning/status/2000983802529645003

https://bitcoinvisuals.com/ln-capacity