In late 2021, Bitcoin (BTC) underwent a crucial update called Taproot. One of the most notable updates in Bitcoin's history, Taproot made it possible to batch together multiple Bitcoin transactions and signatures, significantly improving the efficiency and speed of the on-chain validation process. Thanks to batching together multiple signatures, Taproot also made Bitcoin a more private environment. The efficiency and privacy gains, in turn, opened up opportunities for new use cases on the Bitcoin network, including in the area of decentralized finance (DeFi).

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