Lightning Labs Announces Release of Lightning Loop Alpha
In an official blog post released yesterday, Lightning Labs announced the release of the alpha version of Lightning Loop. This initial release is for Lightning Loop Out, which “allows users to increase their receiving capacity by offloading their funds from the network while keeping channels open.”
More simply put, when a channel reaches its maximum capacity, transactions can still occur. Previously, this feature was not available to users. A business, for example, using the Lightning Network before the release of Lightning Loop could reach a point where a channel’s capacity was maximized, resulting in the business no longer being able to receive funds.
By using the Loop Out feature, a business can move funds out of Lightning and into a “bitcoin wallet, cold storage, or fiat currency via an exchange” when the channel has been maximized, allowing for payments to continue.
Additionally, Loop Out allows a single entity to open a channel when they first join. Previously, one would have to rely on a secondary party to open a channel to create an initial receiving capacity.
The Lightning team also looks to advance in their next release the Loop In feature. This will allow users to “refill their Lightning channels with on-chain bitcoin from wallets or exchanges.” Loop In, moreover, means users who deplete their channel balances can continue to use the channel rather than have to create a new one.
The grand vision of Loop, is to “allow users to securely move funds in and out of the Lightning Network using non-custodial Bitcoin contracts. With Loop, users, businesses, and routing node operators are able to keep Lightning channels open indefinitely, making the network more efficient, more stable, and cheaper to use.”
Recently, the total capacity of the Lightning Network reached over 1,000 BTC. Activity has been booming recently. More than 54% of the network capacity came over the last 30 days alone. Additionally, the number of channels spiked by 47% in the last month.