KaleidoSwap shows a technical integration oriented towards the Bitcoin ecology: RGB primary assets can run directly on the Liquid sidelink of Blockstream and do not need bridges, custodians or large-scale adaptation of protocol structures. The team stated that this was achieved with the addition of a 207-line back-compatible code and that the existing test packages could be passed without modification.

207 Line code complete access.

This integration is based on the fact that Bitcoin and Liquid use the Taproot output format defined in BIP-341. For RGB, the encryption commitment used to anchor the transfer of assets is consistent on two chains, so that the existing certifier can directly identify the Liquid transaction output.

KaleidoSwap indicates that the new code is primarily used to read Liquid transactions, not to rewrite RGB validation logic. The changes are distributed in seven files, covering three abstract layers of authentication calls. The original 45 tests were all passed and the four production banks downstream could be rebuilt without changing the source code.

RGB20 distribution and atomic exchange completed

At the functional demonstration, the team not only validated the technical feasibility, but also issued a real RGB20 asset on Liquid and completed the transfer process, including zeroing. It states that the whole mooring and validation process has run through the side chain environment.

More attention is paid to the cross-chain exchange component. KaleidoSwap also demonstrated the untrusted atomic exchange between RGB assets in the Bitcoin chain and RGB assets in the Liquid chain. Such exchanges, as described, bind the two ends of the transaction together, either at the same time, or as a whole, so as to avoid the risk of default on the part of one party after the asset has been delivered.

  • Asset type: RGB assets on the Bitcoin chain, RGB assets on the Liquid chain
  • Exchange: No hosting atom exchange
  • Security characteristics: All transactions are completed or cancelled

Simplity to limit asset expenditure

Another reason why KaleidoSwap chooses Liquid is that Blockstream has launched the Simplity smart contract language, which has been online in July 2025. According to the article, this contractual language could be used to write some of the asset rules directly into the chain of expenditure terms.

The team prepared a covent based on Simplicity for RGB Seal. The effect is to require that each expenditure must carry a valid RGB commitment, otherwise the transaction will be refused directly by the network. In other words, some RGB asset rules can be implemented at the consensus level rather than relying solely on the application level for validation.

Patch submitted RFC

Currently, patches that support RGB access to Liquid have been submitted as RFC to the RGB Official Code Library for adoption to be determined by the maintainer. If the proposal is approved, the developers can use a tool close to the bitcoin side to build the RGB primary application on Liquid in the future.

Additional information:The article mentions that KaleidoSwap is one of the founding members of RGB Protocol Association, and other members include Bitfinex and Tether. It is envisaged that after Bitcoin and Lightning, Liquid could become the next major network of RGB.