Bitcoin custodian Nostr Assets pauses deposits after reaching 'maximum capacity'

Bitcoin infrastructure developer Nostr Assets has paused deposits following record-high user activity.

According to a Dec. 5 announcement posted on Telegram, Nostr Assets developers warned, “Please await further announcements and do not attempt to deposit into NostrAssets for the time being.” The service, which allows users to transact Satoshis, or or 1/100 millionth of a Bitcoin (BTC), through the Lightning and Taproot Networks, claims to have onboarded over 70,000 new users since Oct. 30 and attracted 280 Bitcoin in novel deposits ($11.8 million) over that period.

An explanation of the incident on Nostr Assets’ official Telegram

On Dec. 4, Fiatjaf, the creator of the Nostr protocol, which allows users to interchange their social profiles and their followers on different platforms, alleged that the Nostr Asset team was operating under an affinity scam. “Nostrassets has nothing to do with the Nostr protocol itself. It just borrows nostr in naming. You should not deposit any sats to this platform,” said Fiatjaf. The allegations have not been proven in a legal institution.

Nostr Assets developers dismissed the allegations as “unfounded,” writing:

“NostrAssets utilizes Nostr, Taproot Assets, and Lightning in its construction, making it pertinent to Nostr. However, it’s crucial to emphasize that Nostr is a decentralised, open-sourced and censorship-resistant relay network that anyone can build on.”

1/ This thread is aimed at addressing the unfounded claims made by @fiatjaf. Our key objective in constructing the NostrAssets ecosystem is to empower builders to create business use cases on both Lightning Network and Nostr. https://t.co/mcceRECEWL

— Nostr Assets Protocol (@NostrAssets) December 3, 2023

The following day, the total volume of non-fungible token (NFT) sales on the Bitcoin network surpassed $1 billion. Meanwhile, Ordinals, a meme token minted on the Bitcoin network, reached $1 billion in market cap. Invented by Web3 developer Rodarmor in January, BRC-20 tokens have surged in popularity as one of the largest technological advancements in a 15-year-old blockchain.

Bitcoin Ordinals is a numbering system that assigns a unique number to each individual satoshi, enabling their tracking and transfer. Combined with the Bitcoin Inscription process, which adds an additional layer of data to each satoshi, this allows users to mint unique digital assets on the Bitcoin blockchain. However, the current token listed on Binance, ORDI, is not associated with developers of Bitcoin Ordinals.