Bitcoin Layer Swaps: KaleidoSwap on the Stephan Livera Podcast

ByRGB Team

In episode 772 of the Stephan Livera Podcast, Walter Maffione, CEO and co-founder of KaleidoSwap, talked about Bitcoin layer swaps: simple, trustless exchanges of bitcoin and stablecoins between Lightning, RGB Protocol on Bitcoin, Liquid, Arkade and Spark. He also covered the KaleidoSwap products, fees, the launch on mainnet, and the role of AI in payments.
Watch the full episode in the video below.

In Brief

  • Lightning as the common rail: one network to connect all the layers of Bitcoin
  • Atomic swaps: both sides of a trade complete together, or the funds go back
  • An open standard: any provider can implement the KaleidoSwap protocol
  • AI on your own device: chat and voice wallets with local models

Bitcoin Layer Swaps over Lightning

Today, Bitcoin runs on several layers. Next to the main chain, there are Lightning, Liquid, Spark, Arkade and RGB, each with its own strengths. KaleidoSwap started three years ago as a DEX for RGB assets on Lightning. Over time, the team expanded to the other layers, with Lightning as the common rail between them. Through Lightning, users can swap bitcoin as well as stablecoins and, one day, real-world assets.

To make such swaps possible, KaleidoSwap runs two services:

  • a Lightning service provider (LSP), which opens payment channels for users;
  • a swap provider with its own liquidity on every layer.

Anyone can reach the swap provider through a web app, while wallets, exchanges and other businesses can use the KaleidoSwap SDK.

Stephan Livera gave two examples. A merchant may want stablecoins to pay bills in fiat, while the customer pays in bitcoin. With the SDK, the customer’s wallet can settle the merchant’s USDT invoice with a simple bitcoin payment. In other cases, a wallet wants to show a single balance, with the swaps between layers in the background. Either way, the end user only clicks “send” or “receive”.

According to Walter, such swaps have become a core need for Lightning. After the shutdown of Boltz, one of the main swap providers, many wallets and apps lost their Lightning features overnight. Few teams can replace Boltz quickly, because a swap provider needs liquidity on every route, constant rebalancing, and a service online around the clock.

How Atomic Swaps Keep Users in Control

KaleidoSwap uses atomic swaps, where both legs of a trade lock to the same secret. On Lightning, the secret is the preimage of the payment. As soon as the payment completes, the secret unlocks the other leg too. If the payment never arrives, the funds return to their owner after a timeout. As a result, neither side can run away with the money of the other.

RGB works in almost the same way, since RGB runs on-chain and on Lightning with the same Bitcoin primitives. As the documentation explains, each payment over an RGB channel carries the assets together with the satoshis, under the same secret and timelock. Liquid and Arkade follow similar logic, with some differences in their scripts.

Security was a major topic of the episode. According to Stephan, Boltz had suffered AI-assisted attacks before its shutdown. Walter acknowledged the risk, since a swap provider attracts anyone who wants to steal funds. KaleidoSwap checks its dependencies for new vulnerabilities every day and may charge higher fees on the riskiest swaps. Still, Walter considers non-custodial swaps essential. Without them, users would go back to custodial exchanges such as Binance, with their funds at risk.

An Open Standard for Bitcoin Layer Swaps

KaleidoSwap plans to open source its swap protocol, so other providers can adopt the same standard. With a shared protocol, a wallet can compare several providers and pick the cheapest or the most trusted one. Providers can announce themselves and their fees on Nostr, an open network for messages and identities.

The team also researches BOLT 12 offers with assets inside. In practice, a single payment code could list the receiver’s preferences: bitcoin on Lightning first, then bitcoin on Liquid, or USDT on RGB. For a beginner, the whole process stays behind a simple “scan and pay”.

KaleidoSwap works only on Bitcoin layers. For funds on other chains, Walter pointed to partners: Flashnet brings USDT from Polygon or Tron to Spark, while Utexo offers a bridge from USDT on Ethereum to USDT on RGB. Once on RGB, USDT can move on-chain or on Lightning, with more privacy, faster payments and lower fees.

KaleidoSwap Products for Every Kind of User

The first KaleidoSwap product was a desktop app for the RGB Lightning Node, a Lightning node with support for RGB assets. Through the app, users can open channels and swap bitcoin for stablecoins. At the time of the episode, RGB on Lightning was still on testnet, as the RGB Lightning Node README confirms.

The second product is a browser extension, similar to MetaMask but for Bitcoin layers only: Spark, Liquid, bitcoin on-chain, RGB on-chain and Arkade. The extension was already on mainnet in closed beta, with a public, open-source release planned. Finally, developers can combine a swap SDK and a wallet SDK to build their own apps, and KaleidoSwap plans a mobile app on the same code.

Walter also believes a wallet should adapt to its user. A beginner would see one balance, with the swaps hidden in the background. An advanced user, instead, could manage channels and choose the layer for each payment.

AI Agents and Local Models in Bitcoin Wallets

With a background in AI, Walter sees a strong link between Bitcoin and AI. The KaleidoSwap SDK already lets a user ask an AI assistant, through a chat, to buy a channel or make a swap. In the future, wallet providers will get an AI plugin for the SDK, with support for chat and voice.

Walter is even more interested in local AI. KaleidoSwap took part in a hackathon on QVAC, the Tether toolkit for AI models on personal devices. Small models can handle simple payments with no need for OpenAI or Claude, so financial data stays with the user. With some training on Bitcoin data, such models could learn the difference between satoshis and bitcoin, or read a Lightning invoice correctly. For larger use cases, such as flight bookings paid in bitcoin, Walter expects new payment standards like L402 to connect AI agents and Bitcoin.

KaleidoSwap Fees and Timeline

Fees for swaps should sit around 0.5% to 1%, close to the old Boltz fees, depending on the route and on stablecoins in the swap. At the time of recording, the swap provider was live on Signet, a Bitcoin test network, with the launch on mainnet planned for November together with a first group of partner wallets. The browser extension would go public the following month, and the web app for all users would follow around December.

Watch the Full Episode on Bitcoin Layer Swaps

The full episode on Bitcoin layer swaps is in the video above. To try the KaleidoSwap products and follow the project:

For more videos from the RGB ecosystem, follow @RGB_Bitcoin.

Further Reading

Episode 772 of the Stephan Livera Podcast, “Trustless Swaps Across Bitcoin Layers”, published in September 2026. Video on the Stephan Livera YouTube channel.

Walter Maffione, CEO and co-founder of KaleidoSwap

Walter Maffione

CEO and co-founder of KaleidoSwap, building trustless swaps across Bitcoin layers.

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