Lightning Network reaches record capacity thanks to exchanges

Bitcoin’s layer 2 hits new all-time highs as exchanges expand support.

The Lightning Network, Bitcoin’s second-layer solution, has reached a new all-time high in capacity, driven by increased adoption from major exchanges and recent functional improvements to the network.

According to data from Bitcoin Visuals, Lightning Network capacity reached 5,606 BTC on December 15, surpassing the previous record set in March 2023. Amboss recorded an even higher peak the following day, with total capacity reaching 5,637 BTC, equivalent to roughly $490 million.

The data shows a sharp increase in capacity during November and December, following a year marked by gradual declines. This growth is due to larger amounts of bitcoin being added to the network.

Currently, the number of Lightning nodes—which open payment channels with one another—stands at 14,940, down from a peak of 20,700 reached in March 2022. The number of active channels between these nodes has also declined, from a 2022 high to the current 48,678.

These figures reveal an ongoing trend: more bitcoins are being added to the network, but without a proportional increase in the number of nodes and active channels.

“It’s not just one company that’s putting more bitcoins into the Lightning Network; it’s across the board,” said Amboss. The firm noted that major exchanges, including Binance and OKX, increased their BTC deposits on the network this month, explaining the sudden jump in capacity.

On December 16, Lightning Labs announced the release of Taproot Assets version 0.7, introducing reusable addresses, a verifiable asset supply, and larger, more reliable transactions.

Taproot Assets is a multi-asset protocol for the Lightning Network that enables the creation of assets such as stablecoins and their transfer over the Lightning Network. “With this release, we are laying the foundation for trillions of dollars to flow on Bitcoin and Lightning,” the company said.

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