During Lightspark Sync, the inaugural partner top hung on Thursday, Lightspark revealed a series of new items and features developed to assist in worldwide payments utilizing both bitcoin and fiat currency.
The company presented the alpha variation of Spark, a Bitcoin Layer 2 option that leverages the Lightning Network, providing a more affordable and easy to use method for onboarding users to a non-custodial Bitcoin layer.
Additionally, Lightspark provided developments in UMA, its open-source, regulative certified payment option, which streamlines the procedure of sending out cash to a level comparable to sending out an e-mail.
Through UMA Extend, the Lightning Network acts as a channel linking conventional count on an international scale. Meanwhile, performances within UMA Auth and UMA Request make it possible for UMA users to tip, pay membership costs, and negotiate with merchants straight within applications.
Spark — The Bitcoin Layer 2 Solution
Spark acts as a Layer 2 procedure for Bitcoin, using statechain innovation to permit users to maintain portions of bitcoin off-chain. Transfers are carried out by sending out personal secrets in between users, instead of needing conventional deal finalizing.
Lightspark established Spark to improve the onboarding procedure for users into the Lightning Network, which usually mandates an on-chain deal for each payment channel, requiring the locking of bitcoin properties within those channels for transactional functions.
The creation of this Layer 2 option came from difficulties dealt with by the Lightspark group in their efforts to produce a non-custodial Lightning wallet. “Self-custodial Lightning wallets, especially at scale, just aren’t viable,” kept in mind Kevin Hurley, CTO of Lightspark.
Hurley elaborated, “If you are opening channels for billions of users, fees escalate significantly, creating an impractical situation that locks liquidity for every individual user.”
He even more highlighted that Lightspark hesitated to postpone the activation of Bitcoin running codes (such as CheckTemplateVerify or TapleafUpdateVerify) that would decrease the expenses connected with developing new Lightning channels. The goal was to quickly supply users with a non-custodial choice.
Thus, Spark was produced as a Bitcoin Layer 2 option that supplies users with affordable, fast payments combined with the choice for a permissionless, unilateral retreat to the Bitcoin base layer. It also presents the ability for offline receiving, making it possible for users to accept bitcoin even when their gadgets are offline.
In addition to statechains, Spark incorporates atomic swaps, enabling the smooth off-chain transfer of Bitcoin UTXOs accompanied by near-instant, fee-free deals, as detailed by Hurley.
“Mercury possesses several core limitations that we address,” Hurley asserted. “In Mercury, for instance, only whole UTXOs can be transferred, with rigid time constraints mandating a return to on-chain transactions. Our design, however, incoorporates varied elements, steering clear of perceived similarities with Ark.”
Beyond bitcoin, Spark accommodates the issuance and usage of stablecoins, which can be produced through Taproot properties, LRC-20, or RGB on the base layer before being moved to Spark.
What differentiates Spark is that all properties within this Layer 2 option are UMA-made it possible for. “Non-custodial users can now send payments directly to the bank accounts of UMA Extend users,” kept in mind Hurley, describing among the ingenious features of UMA.
UMA Extend
UMA Extend incorporates the Lightning Network with traditional banking systems, empowering users to carry out global bank transfers within seconds. This innovation makes it possible for UMA Extend users to send out timely cross-border payments from one bank to another over Lightning, matching the ease of sending out an e-mail.
“This initiative is designed to streamline money movement across diverse currencies,” mentioned Nicolas Cabrera, VP of Product at Lightspark. “For example, I can transfer my local currency, the Brazilian real, to a recipient in Europe expecting euros or to a user in the US who wishes to receive USD.”
The Brazilian reais exit the sender’s account, are transformed into sats by the bank (or an entity such as Zero Hash, when banks cannot straight communicate with cryptocurrency), and are consequently gotten by the recipient’s bank, which transforms the funds back into the regional currency. This whole procedure can be finished within roughly 30 seconds, representing a considerable enhancement over the normal 2 to three-day timeframe connected with traditional global cash transfers.
UMA Extend uses Real-Time Payments (RTP), helping with instant transfers for federally guaranteed banks in the United States, together with comparable services in nations where UMA Extend is functional. All banks in the United States using RTP work with Extend, presently providing on- and off-ramps for 44 fiat currencies throughout more than 100 countries.
The banks associated with these deals develop the suitable costs, which frequently vary from 0.25% to 0.5%—a significant decrease compared to the 6.35% most clients experience when utilizing conventional remittance approaches.
Individuals thinking about using UMA Extend can check out more through the offered link.
UMA Auth
During the occasion, Lightspark also presented UMA Auth, an innovation profiting from OAuth (Open Authentication)—the backend system that makes it possible for users to sign into third-party applications or sites utilizing qualifications from platforms such as Google or Facebook.
UMA Auth was established using Nostr Wallet Connect (NWC), a procedure crafted by the group at Alby. NWC now helps with UMA performances consisting of cross-currency deals and customer application registration.
“Our objective was to expand UMA’s reach beyond wallets to encompass applications,” highlighted Shreya Vissamsetti, a member of the Lightspark engineering group concentrating on UMA.
“UMA Auth is an extension atop UMA that allows developers to integrate payment functionality directly into their applications. The concept parallels OAuth but is specifically designed for monetary transactions,” she included.
“Users simply enter their UMA address, allowing for direct connectivity between the application and their Lightspark wallet. This provides the application with the ability to communicate with the user’s wallet and facilitate transactions seamlessly.”
UMA Auth supports a range of functions, making it possible for users to tip their preferred artists, settle membership costs, or send out funds to pals through their favored messaging applications.
“For instance, while listening to Taylor Swift, I could link my UMA account. If a favorite song plays, I can simply tap a button to send her a small tip,” Vissamsetti discussed.
“Tipping is a primary use case we are targeting with this product,” mentioned Cabrera. “The Lightning Network serves as a robust foundational layer, making it advantageous for smaller transaction amounts.”
UMA Request
UMA Request represents another ingenious element of UMA, making it possible for any UMA user to get a payment from another user.
Merchants can make use of UMA Request to release payment demands through billings, represented as QR codes for products offered or services offered. UMA Request also consists of a function for zero-sum billings, allowing receivers to contribute an approximate quantity towards payment.
“Previously, UMA operated in a manner where the sender initiated transactions, but we have transitioned this model,” Vissamsetti said.
Notably, UMA Request makes sure that both included celebrations maintain a record of the deal, more improving the procedure of buying products online—especially in cross-border circumstances—over conventional charge card approaches.
Future Directions
David Marcus, CEO of Lightspark and previously President of PayPal, is positive that an increasing variety of banks and monetary platforms will embrace ingenious innovations such as UMA Extend, UMA Auth, and UMA Request in the future.
“Ultimately, by constructing a more efficient network that enables global money transfers to occur faster, cheaper, and in real-time—24/7 without interruption—financial systems and their participants will inevitably have to adapt,” Marcus asserted.
Citing Spark, the Lightspark group is actively looking for user feedback to drive item improvements.
“Engagement with the community is essential to us,” Hurley kept in mind. “We intend for this to be entirely transparent and open-source, allowing anyone to audit the system and create their own iterations if desired,” he included.
“We aspire to foster a collaborative environment where the community can contribute, submit pull requests, and identify avenues for improvement.”
Christina Smedley, co-founder and Chief Marketing and Communications Officer at Lightspark, echoed this belief, highlighting the significance of open-source services as the business intends to onboard a bigger user base. “Our goal is to onboard the next billion users; thus, ensuring our approach is community-driven and open-source is paramount,” Smedley said.
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