A new project called Utexo is exploring how to enable Bitcoin-native stablecoin transactions. By combining the Lightning Network for fast payments with the RGB protocol for asset management, the initiative aims to facilitate transfers like USDT directly on Bitcoin’s ecosystem. The project has joined the collaborative CTDG Dev Hub, a platform for blockchain developers to exchange ideas and develop solutions.
Bitcoin has long served a simple purpose of storing and transferring value. Its blockchain’s limitations previously prevented use cases like high-frequency payments and smart contracts.
Launched in 2018, the layer-2 solution Lightning Network introduced noticeable improvements in scalability for faster, lower-fee transactions. Secondary protocols like the open-source RGB later enabled smart contracts and other digital assets on Bitcoin through private, offchain transactions.
The project Utexo examines how stablecoin transfers could be represented natively on Bitcoin. It combines the Lightning Network’s payment channels with RGB’s client-side asset model to move assets like USDT on Bitcoin-native rails.
Before such native solutions, the prevailing practice for using USDT on Bitcoin involved methods like wrapping and bridging. These methods add intermediaries to the process and increase security risks.
Utexo’s design uses RGB to issue and transfer USDT under a client-side validation model, keeping most transaction details off Bitcoin’s base layer. Meanwhile, the Lightning Network enables fast and low-cost execution, with Bitcoin’s layer-1 serving as the ultimate security anchor.
This combination is meant to avoid the extra trust assumptions that come with wrapping and bridging while maintaining speed. In Utexo’s design, separating execution from base-layer congestion can make cost behavior less sensitive to Bitcoin’s mempool conditions.
Utilizing the Lightning Network or RGB separately normally requires significant manual technical work from users. The Utexo project brings these steps into a single integration flow available via an SDK and REST API for programmatic access.
As part of the CTDG ecosystem, CTDG Dev Hub serves as a developer-focused hub for the blockchain community to exchange ideas and develop solutions. Through its participation, Utexo becomes part of a shared development environment where its approach can be reviewed by other contributors.
