The Lightning Network, enhanced by the Taproot upgrade, was expected to see channel capacity grow by 50%, but growth has fallen short. Taproot, activated in November 2021, improved privacy, efficiency, and smart contract capabilities, enabling features like Schnorr signatures and Point Time-Locked Contracts (PTLCs). Despite these advancements, capacity growth has been modest, with public channels reaching only ~4,000 BTC by mid-2022, far below projections. Factors include slow adoption of Taproot-enabled wallets, complex implementation of new features, and low on-chain fees reducing incentives for Layer 2 usage. Additionally, network congestion from BRC-20 tokens and ordinal inscriptions may have shifted focus. While Taproot Assets show promise for future scalability, their integration is still experimental, delaying significant capacity boosts.