Taproot Assets is a protocol that allows people to issue digital assets on the Bitcoin blockchain (like a stable coin or an NFT). Those assets can be transferred with a classical Bitcoin transaction, or an off-chain transaction over the Lightning Network.
Since Taproot, you can lock an UTXO within a tree structure called the ‘tapScript branch’. You don’t store the tree in the transaction but only the hash of the tree merkel root. So you can create complexe scripts without writing them in the blockchain and without revealing them!
With Taproot Assets, you use that tree structure to let developers embed arbitrary asset metadata (asset script hash, amount, metadata….) in leafs. Only the tree structure merkel root hash only has to be stored into an existing transaction output. No matter how big your data, you only store the merkle root hash of this data.
Assets issued on Taproot Assets can be deposited into Lightning Network channels, where nodes can offer atomic conversions from Bitcoin Taproot Assets. Taproot Assets makes Bitcoin and Lightning multi-asset networks.