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KaleidoSwap builds on three foundational technologies to enable fast, private, and scalable asset trading on Bitcoin.

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Bitcoin Network

Bitcoin provides the base settlement layer. All KaleidoSwap wallets are Bitcoin wallets at their core — they hold UTXOs, sign transactions, and broadcast to the Bitcoin network. On-chain transactions are used for:
  • Wallet funding — Depositing BTC to your KaleidoSwap wallet
  • Channel opens/closes — Anchoring Lightning channels to the blockchain
  • RGB commitments — Embedding asset state transitions into Bitcoin transactions
KaleidoSwap currently supports Signet (MutinyNet) for testing. Bitcoin mainnet support is coming soon.

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Lightning Network

The Lightning Network is a second-layer protocol that enables instant, low-cost payments through a network of payment channels. KaleidoSwap uses Lightning for:
  • Instant settlement — Swaps settle in milliseconds, not blocks
  • Low fees — Transaction costs measured in satoshis
  • RGB asset transfers — RGB assets can ride on Lightning channels, enabling off-chain asset swaps
  • Channel-based liquidity — Users open channels to allocate capacity for trading
Payment channels are opened between your node and a peer (or an LSP). Once open, you can send and receive BTC and RGB assets through the channel without waiting for on-chain confirmations.

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RGB Protocol

RGB is a client-validated smart contract system built on top of Bitcoin. Unlike Ethereum-style smart contracts, RGB keeps contract logic and state off-chain while using Bitcoin transactions as cryptographic commitments. This means:
  • Privacy — Asset balances and transfers are not visible on the blockchain
  • Scalability — No blockchain bloat from token transfers
  • Bitcoin security — Asset state is anchored to Bitcoin’s proof-of-work
  • Programmability — RGB20 fungible tokens (like USDT, XAUT) and future asset standards
In KaleidoSwap, RGB assets are issued, transferred, and swapped using this protocol — both on-chain and over Lightning channels.

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Lightning Service Providers (LSPs)

LSPs are nodes that provide channel liquidity and routing services. Instead of manually finding peers and managing channel capacity, you can connect to an LSP that:
  • Opens channels on demand — Request inbound liquidity when you need it
  • Routes payments — Ensures your transactions reach their destination
  • Supports LSPS1 — KaleidoSwap implements the Lightning Service Provider Specification for standardized channel ordering

Architecture Deep Dive

See how these technologies fit together in KaleidoSwap’s architecture

Glossary

Look up terms related to Bitcoin, Lightning, RGB, and trading