We're excited to announce the release of LND 0.17.0 beta! In this release, we've upgraded LND with Simple Taproot Channels, enabling improved privacy and cost efficiency for Lightning users and developers. This change also lays the groundwork for future advancements like Taproot Assets on the Lightning Network. Highlights of the release include:

• Simple Taproot Channels, allowing users to open unannounced channels with Taproot transactions improving on-chain privacy and cost efficiency.

• Reduced block sync time for Neutrino, a Bitcoin light client optimized for mobile Lightning nodes. We’ve observed 400x faster sync time for the block filters. This improvement speeds up the start time of a Neutrino node that is set up from scratch or catching up to the chain tip after being offline for some time.

• Improved reliability and resource optimization for Watchtowers with queued updates for reduction in memory usage.

We’re incredibly grateful for the continued support from external contributors, with a total of 30 developers contributing to this release. For the complete breakdown of everything included in 0.17, take a look at the full release notes.

Taproot Channels 🔗

With this release, LND is the first Lightning implementation to allow users to have the option to process all on-chain transactions – including opening, closing, and force-closing channels – as Taproot transactions. Taproot channels offer several immediate benefits for both users and developers. One notable advantage is increased on-chain privacy; Taproot channel opening and closing now resemble regular single-sig Bitcoin transactions on-chain, rendering them virtually indistinguishable from standard transactions. Additionally, the integration of Schnorr signatures with Taproot enhances on-chain efficiency by enabling signature aggregation. This development ensures that on-chain cooperative operations become more space- and cost-efficient.

The name ‘Simple Taproot Channels’ stems from the fact that this change was the smallest commitment format upgrade to enable usage of MuSig2 and Tapscript scripting within the Lightning Network protocol. Future updates, enabled by dynamic commitments on top of the foundational Simple Taproot Channels, will allow Lightning developers to progressively update the functionality of these channels, and eventually enable features such as PTLCs (Point Time-Locked Contracts), a proposed upgrade to HTLCs (Hash Time-Locked Contracts) which will enhance Lightning privacy. With LND 0.17, Simple Taproot Channels cannot be publicly announced (unadvertised or private only), but in future LND versions public Taproot channels will be enabled. An upgrade to the Lightning Network’s gossip protocol referred to as Gossip 1.75 is currently under development, which will enable public Taproot Channels functionality.

It's essential to recognize that this feature is still experimental. We recommend that users first experiment with it on testnet/regtest. As developers explore this functionality, it’s important to keep a few things in mind. Currently, Taproot Channels can only be opened as unannounced channels, which also means that node operators cannot route public payments over them just yet. However, all operations related to channel closing, sending, and receiving will function as usual. For developers and users, this means that you can use private Taproot channels to send/receive payments using hop hints, but public payment traffic won’t be routed through these channels. With regard to Static Channel Backups (SCB) and recovery, these flows remain consistent with previous versions.

The development was done in parallel with a BOLT spec proposal, making it easier for other Lightning teams to follow with their development. We look forward to more interoperability testing with other Lightning implementations as they roll out this feature. This is also the first step towards standardizing Taproot Channels as the default channel type on LND.

Speedier Syncs with Neutrino 🚀

We have added block sync improvements for Neutrino, a Bitcoin light client optimized for mobile Lightning Network, which enhance the efficiency of filter fetching and persistence. The outcome of these changes and efficiency improvements will be a massive reduction in the time necessary to sync nodes. To achieve this, filters are now fetched in batches of 1000 (where possible) instead of individually. This improves the performance significantly in the case of a node getting set up for the first time or coming online after a sustained offline period. Furthermore, to prevent any lag in filter fetching, the persistence process (i.e. storing of the filters in the database) has been optimized by decoupling it from the filter fetching process.

Our testing indicates 400x faster sync time of the block filters compared to the previous Neutrino version. A regtest benchmark observed the synchronization time for 3200 filters reduced from 265 seconds to a mere 0.653 seconds.

You can read more about how to configure LND to run in Neutrino mode in the guide Enable Neutrino Mode in Bitcoin Core.

More Reliable and Efficient Watchtowers🗼

With the latest watchtower updates in this release, disk persistence has been introduced for queued updates within the watchtower client, leading to a reduction in memory usage. This will make watchtowers much easier for developers to run and deploy. Further, to make Watchtowers more reliable and stable, with the latest updates, when towers are removed from the client, any pending and unacknowledged updates of the removed tower are now replayed onto other tower sessions. This change makes Watchtowers more usable and improves the reliability of updates getting sent to the watchtowers.

You can read more about how to run watchtowers in our Configuring Watchtowers Guide.

Taprooting Intensifies 🥕

In upcoming releases, there are several exciting features to anticipate which build further on Taproot Channels. We're focused on the development of Taproot Asset Channels, which will facilitate the transfer of Taproot Assets over the Lightning Network. Beyond that, the integration of Gossip 1.75 will pave the way for public Taproot Channels. Finally, watchtower support for Taproot Channels is also expected to land in a future release.

We’re very excited to bring the benefits of Taproot, namely privacy, cost efficiency, and script composability, to the Lightning Network. Releasing LND 0.17 with Simple Taproot Channels marks an important step in that direction. We will continue to build more advanced features on this foundation integrating Taproot into Lightning.

We'd like to thank the entire community for their feedback on and contributions to this release, and we look forward to hearing your thoughts. You can find us on the LND Slack, reach out to us on Twitter, contribute a PR, or subscribe to our newsletter. With Taproot channels branching into Lightning, Bitcoin's future has never looked more bright ⚡!