Lightning Labs Proposes LayerTree to Scale Bitcoin Ownership Without Custodians

Lightning Labs has introduced LayerTree, a proposed non-custodial scaling construction that allows a large number of users to share a single Bitcoin unspent transaction output (UTXO). Announced on October 15, 2026, via the company’s official X account, the design uses covenants and an off-chain Merkle-sum tree so that one on-chain output can represent balances for up to a million participants. Any user can leave at any time in a single transaction, recipients do not need to remain online, and funds carry no forced expiry. The proposal is detailed in a technical paper authored by Lightning Labs CTO Olaoluwa Osuntokun. Bitcoin’s fundamental constraint for widespread ownership is the scarcity of UTXOs: each distinct owner typically requires a separate output, and those outputs consume block space and raise fees.

First reported by The Crypto Times. This page is a short excerpt; the full text is theirs.