Kernel Ventures: Application layer panoramic map under BTC ecological development boom

Author: kernel venntures Jerry Luo

TLDR:

• With the fire of the inscription track, the existing application layer of the Bitcoin main network cannot meet the inscription market, which is the focus of the current Bitcoin network development.

• At this stage, there are three types of Layer2 solutions for Bitcoin, namely Lightning Networks, side chains, and ROLLUP:

1. Lightning network realizes point -to -point payment through the establishment of the under -chain payment channel. After the channel is closed, settlement on the main network;

2. The side chain locks the main network BTC asset through specific addresses or multiple addresses on the main network, and cast equivalent BTC assets on the side chain.Among them, Merlin Chain can support multi -type inscription asset cross -chain, and behind it is closely linked to the BRC420 asset community. At present, the total number of TVL on the chain is more than 3 billion US dollars;

3. At this stage, the BTC Rollup is based on the Taproot circuit to simulate smart contracts on the chain and complete the packaging and computing operations outside the Bitcoin main network.Among them, B2 Network is at the forefront in the process of implementation, and the total number of TVL on the chain also exceeds 200 million US dollars.

• There are not many cross -chain bridges designed for Bitcoin. At this stage, more multi -chain bridges and full -chain bridges that integrate mainstream public chains have been integrated. Among them, Meson.Fi has established cooperative relationships with many Bitcoin second -floor projects.

• Bitcoin stabilizer protocols are mostly implemented in the form of excess mortgages, and other DEFI protocols are constructed based on the stabilization currency protocol to bring more benefits to protocol users.

• The DEFI projects in the Bitcoin ecosystem are very different. Some of them have been moved from other chains. Some are based on the Bitcoin main network under this round of development.On.On the whole, Alex has the most comprehensive trading type and the best trading experience, but Orders Exchange has a larger room for rise.

• Bitcoin ecology is an important narrative of this round of bull market, and you can pay attention to the movement of the head project of the Bitcoin ecosystem’s subdivided track.

background

With the inscription assets brought by the Ordinals protocol, the Bitcoin network, which can only rely on script language and infrastructure and weak expansion due to lack of smart contracts and development.Report:>Can RGB re -engraved the boom of OrdinalsTo.The situation encountered in the Ethereum network when it burst into fire. Text, pictures, and even videos are scrambled to be written into the TapScript script space that will never be executed in the size of 4MB.Although this wave of chain has promoted the prosperity of the Bitcoin network ecology and the development of infrastructure, it also brings surge in transaction volume and huge storage pressure to the Bitcoin network.In addition, for all kinds of inscriptions, simple transfer can no longer meet everyone’s transaction needs, and users also expect that there are many derivative trading services on Ethereum to introduce the Bitcoin network.Therefore, the development of the Bitcoin’s main network application layer has become a relatively urgent demand for the current market.



In the past year, Bitcoin’s main network daily transaction volume changes, pictures source: Cryptoquant

Bitcoin layer2

Different from the relative consistency of the Layer2 scheme on Ethereum, Bitcoin cannot achieve smart contracts based on its own script language. The release of their smart contracts must rely on third -party protocols.LAYER2 of the Rollup type of Bitcoin’s main network, cannot be close to the security of the Bitcoin main network as the Rollup type Layer2 on the Ethereum.There are many layer2 schemes on the Bitcoin main network, including lightning networks, side chains, and Rollup based on TAPScript.

Lightning network

Lightning Network was the earliest Bitcoin Layer2 solution. The Gregory Maxwell first proposed the Lightning Network protocol stack in December 2015 -Bolt, Lightning Labs released the alpha version of Lightning Network in January 2017 and followed it in follow -up.Continuously upgraded and improved.Lightning networks through the establishment of a pairing channel of the point -to -point point -to -point point -to -point paid passage. Users can perform any number of asset transfer in the channel without paying fees without paying.Use the cost of paying a transaction.Due to the use of the lower channel, Lightning Network can reach a maximum of 10 million TPS.However, the lower passage has a centralized risk. At the same time, the transaction must be established between the two addresses must first establish the lower channel or the third party of the lower channel through the chain channel.Can be traded safely.



Principle of Lightning Network, Picture Source: Kernel Ventures

Side chain

The side chain scheme of Bitcoin is similar to the Ethereum’s side chain scheme. The essence is the issuance of a new chain that realizes the anchor of tokens and Bitcoin 1: 1.This new chain will not be limited by the speed of Bitcoin’s main network transaction and the difficulty of development. It can transfer Bitcoin to the tokens at a faster speed and lower cost.Although the side chain scheme inherits the asset value of the main network, it does not inherit the security of the main network. The settlement of the transaction is placed on the side chain.

Stacks

At this stage, the Stacks project is a version 2.0 launched in 2021. Users can lock the BTC on the Bitcoin main network, and then get SBTC assets on the equal value of Stacks.EssenceThe Bitcoin main network does not have a smart contract address like the Ethereum main network that can effectively manage the locking BTC, so the lock -up BTC is sent to a specific multi -signal address of the Bitcoin main network.Since the main network of Stacks can use the Clarity language for smart contract development, the release process is relatively simple. You only need to initiate a request to the Burn-UNLOCK contract on Stacks, and you can destroy the SBTC on Stacks and send the locking BTC back to the main network.Original address.The outbound process of the Stacks main network adopts the POX consensus mechanism. The miner of the Bitcoin main network sends BTC bidding opportunities. The higher the corresponding amount of miners can get higher weights, and eventually choose a certain validable random function to win victory.Package on the main network of Stacks and get a reward for the corresponding Stacks native currency STX.At the same time, the BTC participating in the bidding will be rewarded as the holder of the STX token in the form of SBTC to the STX token.



POX principle, picture source: kernel venntures

In addition, Stacks expects to upgrade Nakamoto in April. The upgrade content includes optimization of its development language Clarity to reduce the development threshold of developers.Secondly, Stacks optimizes the security level of the network. On Stacks, the main network block transaction can be issued and has a 100% Bitcoin reorganization resistance. The confirmation of transactions in Stacks will be carried out on the main network, soLayer2, which is equivalent to the Bitcoin main network.Finally, Stacks also accelerated sharply on the outlet speed. At the test phase reaches 5 seconds, the outlet speed of a block (the current stage is 10-30 minutes a block).If Nakamoto’s upgrade can be successfully completed, Stacks is basically close to many Layer2 on many Ethereum in terms of performance, which should attract the inflow of many funds and increase the development popularity of the Stacks ecosystem.

RSK

RSK (RootStock) is a Bitcoin side chain without the original generation currency. At this stage, the transaction on the side chain uses Bitcoin as a handling fee.Users can use the main network to exchange RBTC at a ratio of 1: 1 through the BTC of the main network through RSK’s built -in POWPEG two -way anchor.RSK is also a public chain of POW mechanism, but introduced a mechanism for merging mining. The infrastructure and settings of Bitcoin miners can fully apply to the mining process of RSK, reducing the cost of Bitcoin miners participating in RSK mining.At this stage, the RSK has three times the trading speed of the main network and the transaction cost of the main network 1/20.



Comparison of RSK and Bitcoin main network performance, picture source: RSK White Paper

Bevm

BEVM is a POS -side chain compatible with EVM. At this stage, it has not issued its own native currency.It can store the receiving assets received on a multi -signal address jointly controlled by 1,000 addresses on the Bitcoin main network, which corresponds to 1,000 POS verifications on BEVM.At the same time, a script program in the form of MAST (Merkel’s abstract grammar tree) in the TapScript area can achieve automated control of assets.MAST uses many independent small pieces to describe the program. Each independent small block corresponds to a part of the code logic, and the Script script does not require a large number of logical code.This greatly reduces the amount of contract code required on the blockchain.When the user transferred to the BTC to the BEVM, this part of the BTC was locked by the script program. Only by the signature of more than 2/3 verificationrs can the locking BTC unlock and send it back to the corresponding address.BEVM is compatible with EVM at the bottom. It can migrate various DAPPs on the Ethereum without cost. The above BTC anchor assets are traded and anchor assets are based on GAS.



MAST and non -MAST forms data amounts grow with the number of subcutors, picture sources: BTCSTUDY

Merlin Chain

Merlin Chain is a Bitcoin side chain compatible with an EVM compatibility with the Bitcoin address directly connecting the network through the PARTICLE Network. It will generate a unique Ethereum address, which can also be used to connect directly to the RPC node.At this stage, Merlin Chain supports cross-chain migration of BTC, Bitmap, BRC-420 and BRC-20 assets.The BRC-420 protocol, like Merlin Chain, is the development of the Bitmap asset community based on recursive inscriptions. Based on the recursive inscription, the entire community also proposes the recursive inscription matrix of the RCSV, and the Bitmap Game Yuan universe platform and other projects.



The connection method of BTC native account and Merlin Chain, picture source: Merlin document

Merlin Chain carried out the main network on February 5th, and then a round of IDO and pledge rewards, assigned 21% of the governance token Merl.Direct and large -scale airdrops have attracted a large number of participants. Merlin Chain’s TVL currently exceeds $ 3 billion, and the TVL on the Bitcoin chain also exceeds Polygon, ranking 6th in the public chain.



Bitcoin TVL distribution, picture source: DEFI LLAMA

In the IDO of the PeOOLE ‘S Launchpad, the user pledged Ally or more than 0.00025 BTC to obtain points rewards that can be exchanged for Merl to purchase qualifications. The upper limit of the pledged BTC for cumulative rewards was 0.02, and the corresponding Merl tokens could be obtained.The wheels are distributed less, accounting for only 1%of the total amount of tokens.However, according to the current Merl 2.9 US off -site pricing calculation, its yield also exceeds 100%.In the second round of pledge incentives, Merlin allocated 20%of its token. Users can pledge BTC, Bitmap, USDT, USDT, USDC and some BRC-420 assets through Merlin’s Seal.The user’s assets on Merlin will be priced at a snapshot at a USD per hour. Finally, the average price of that day by 10,000 is the points obtained by the user.The second round of pledge activities adopted a team -like team mode. Users can choose the two identities of the captain and members. The identity of the captain can get a invitation code, and the choice of the team’s identity needs to enter the captain’s invitation code to bind the team.

Merlin is mature in the current landing Bitcoin Layer2 scheme, which can liberate the liquidity of Layer1 assets. The Bitcoin of the main network can flow at low cost on Merlin.The Bitmap ecological community behind it is very huge and the technology is relatively complete. In the long run, there should be good development.At this stage, the pledge on Merlin has a high rate of return. In addition to Merl’s revenue expectations, there is also the opportunity to obtain the corresponding MEME or other tokens of the projector airdrop.You can get 90 VOYA token airdrops. Since the launch, the price of currency has continued to rise, up to 514% of the issuance price. At this stage, the price is $ 5.89. The pledge is calculated at the average price of Bitcoin 50,000 US dollars, with a yield of 106%.



Voya token price trend, picture source: coingecko

Rollup

Bitvm

Bitvm is a Bitcoin Layer2 based on Optimistic Rollup.Similar to Optimistic Rollup on Ethereum, traders first send transaction information to Layer2 on the Bitcoin main network, and then calculate and pack the transaction on Layer2.The verifications have a time challenge to the statement of the proof.But Bitcoin does not have native intelligent contracts, so it is as simple as the specific implementation of Optimistic Rollup, which is not as Ethereum, involving the Bit Value Community, Logic Gate Commission and Binary Circuit Commission. To thisThe three of the three have a finger.

BVC (Bit Value Community): BVC is essentially a level result, only 0 and 1 possibilities, similar to the BOOL type variable in other programming languages.Type variables, so the combination of bytecode is used in Bitvm to simulate it.

& lt; input preimage of hash & gt;

2 OP_IF

3 OP_hash160 // Hash The input of User

4 & lt; have1 & gt;

5 OP_EQULVERIFY // OUTPUT 1 If Hash (input) == Hash1

6 & lt; 1 & gt;

7 OP_ELSE

8 OP_hash160 // Hash the input of User

9 & lt; have2 & gt;

10 OP_EQULVERIFY // OUTPUT 0 if Hash (input) == Hash2

11 & lt; 0 & gt;

In the BVC, users need to first submit an input, and then the input of the input on the Bitcoin main network. Only when the input hash result is equal to Hash1 or Hash0, the script will be unlocked.When the output is 1, when the hash result is HASH2, the output is 0.In the following description, we will pack the entire code segment into an OP_BITCOMITMENT operating code to simplify the description process.

• LGC (Logic Gate Community): All functions in the computer can essentially correspond to the combination of a series of BOOL door circuits, and any door circuit can be equivalent to a series of combinations of non -door circuits, which meansIf we can simulate and non -door circuits through bytecode on the Bitcoin main network, we can essentially reproduce any functions.Although there is no direct implementation with non -operating codes in Bitcoin, there are door OP_BOOLAND and non -door OP_NOT, which can be reproduced and non -door functions through the superposition of these two operating codes.For two output levels obtained by OP_BITCOMITMENT, we can form a non -transmitting circuit through OP_Booland and OP_NOT operating codes.

• BCC (BINARY CIRCUIT Commission): On the basis of the LGC circuit, we can build a specific door circuit relationship between the input and output. In the BCC door circuit, the input from the original image of the hash original image corresponding to the TapScript script,And different taproot addresses correspond to a different door. We call it TAPLEAF, and many TAPLEAF constituted a Taptree as the input of the BCC circuit.



Enter the Taproot circuit corresponding to the non -door circuit and its corresponding Taproot, picture source: BITVM White Paper

Ideally, the proofer of BITVM compiles and calculates the circuit under the chain, and then returns the results obtained to the Bitcoin main network.However, because the process under the chain is not executed by the intelligent contract, in order to prevent the evil of the proof, BITVM needs to challenge the verifications of the main network.During the challenge, the verificationrs first reproduce the output of a TAPLEAF door circuit, and then use the results provided by the proof as the input drive circuit with other TAPLEAF results.If the output FALSE, the challenge is successful, indicating that the proof is fake, and the challenge fails.However, to complete this process, the challenger and verificationrs need to share the Taproot circuit in advance, and at this stage, only the interaction between a single verification person and a single proof can be realized.

Satoshipmm

Satoshipm is an EVM compatible ZK Rollup Bitcoin Layer2 solution.The implementation of smart contracts on Satoshipm is the same as Bitvm. All uses Taproot Circuit to simulate complex functions, so it will not be repeated.Satoshivm is generally divided into three layers, namely Settlement layer, Sequeencing layer, and Proving Layer.Settlement Layer is the main Bitcoin main network. It is responsible for providing the DA layer. The Merkle root and zero -knowledge proof of the storage transaction is settled at the same time to verify the correctness of Layer2 packaging transactions through the Taproot circuit.SequenCing Layer is responsible for packing and processing the transaction, and returns the calculation results of the transaction to the main network.Proving Layer is responsible for generating zero -knowledge proof of Task from the Task from SequenCing Layer and returned to SequenCing Layer.

Satoshivm overall structure, picture source: satoshivm official documentation

BL2

BL2 is a ZK Rollup type Bitcoin Layer2 designed based on the VM general -purpose protocol (the official presets that can be compatible with all mainstream virtual machines).Similar to other ZK Rollup’s Layer2, its Rollup Layer is mainly packed the transaction through ZKEVM and generates corresponding zero knowledge proof.The DA layer of BL2 introduces Celsetia stored batch transaction data and only uses BL2 network to store zero knowledge proof. Finally, the verification data of zero -knowledge certification and a small amount of verification data including BVC will return to the main network for settlement.

BL2 network structure, picture source: BL2.io

The X account of BL2 has recently been updated frequently, which is basically in a more daily state. It also publicizes the development plan and the tokens. It will distribute 20 % of the tokens to OG MINING, and it also indicates that the recent test network will be launched.At this stage, this project is relatively small compared to other Bitcoin Layer2 and is in an early state. It has introduced the recent hot concepts such as Celestia and Bitcoin Layer2, which is conceptual enough.However, its official website does not design practical functions, only expected demonstrations, and no project white paper.At the same time, the goals set at the same time are too high. For example, the account abstraction on Bitcoin and the VM protocol that is compatible with mainstream virtual machines is not difficult to achieve. Whether the team can eventually be able to complete this goal is not sure, so it is difficult to be right at this stage.The project makes an accurate judgment.



BL2 route diagram, picture source: BL2 official x

B2 network

The B2 Network is a ZKrolLup -type Layer2 based on Bitcoin as the settlement layer and DA layer. It can be divided into two layers of Rollup Layer and DA Layer in terms of structure.The user’s transaction will first submit and processes at the Rollup Layer. Rollup Layer uses the ZKEVM scheme to execute the user transaction and output relevant proof, and store the user status on the ZK-Rollup layer.Batch packaging transactions and zero -knowledge proof will be forwarded to DA Layer for storage and verification.DA Layer can be subdivided into three parts: decentralized storage node, B2 Node and Bitcoin main network.After the decentralized storage node receives the Rollup data, it regularly generates zero -knowledge proof of time and space based on rollup data, and sends the generated zero -knowledge storage certificate to the B2 Node.The B2 Node is responsible for conducting the data outside the chain. After the verification is completed, the transaction data and the corresponding zero knowledge verification is verified in the Bitcoin main network in the form of TAPScript.Bitcoin’s main network will be responsible for confirming the authenticity of zero knowledge verification and final settlement.



B2 network network structure, picture source: B2 Network White Paper

B2 Network has a good degree of attention in the major BTC Layer2 solutions. There are 300,000 fans on X. It exceeds BEVM’s 140,000 and 166,000 Satoshivm of ZK Rollup Layer2.At the same time, the project has received seed wheel financing including OKX and Hashkey, which has attracted much attention. At this stage, TVL has exceeded 600 million US dollars.



B2 Network has launched the main network B2 Buzz. At this stage, the use of B2 Network must get an invitation link and not directly participate.B2 Network borrowed BLAST’s communication mode, and a strong two -way interest binding was performed between the new entry and the entrants, giving the full project promotion driving force for those who entered the bureau.After completing simple tasks such as the official website, you can enter the pledge interface. At this stage, support the use of BTC, Ethereum, BSC, and Polygon’s assets for pledge.In addition to Bitcoin’s assets, the inscription Ordi and SATS can also be pledged.If the pledged BTC assets can be transferred directly on the assets, and if you want to pledge the inscription asset, you need to experience the inscription and transfer stage.It is worth noting that because the Bitcoin main network does not have smart contracts, in the current BTC Layer2 cross -chain transfer, the essence of the asset is locked in a specific BTC address.At this stage, the asset pledged on the B2 Network will not be released until April this year, and the points obtained by the pledge during the period can be exchanged for the mining unit to perform virtual mining.Mining machines need more than 80 components.

The official announcement of some tokens plans to use the total amount of 5% of the tokens to reward virtual mining, and to distribute 5% to ecological projects on B2 Network for airdrops.At this stage, the project party is in the case of Tokenomics fairness. B2 Network only allocates 10% of the total tokens, which is difficult to fully mobilize the enthusiasm of the community. It is expected that B2 Network should have other pledge incentives or Launchpad plans later.

Comprehensive comparison

Based on the two -layer network form of the three Bitcoin, the Lightning Network has the fastest trading speed and the lowest transaction cost, and has more applications in the real -time payment of Bitcoin and the process of offline purchases.However, if you want to achieve the development of ecology on Bitcoin, build various DEFI or cross -chain protocol lightning network logistics in terms of stability or security. Therefore, the competition in the application layer market is mainly developed between the side chain and the Rollup type.EssenceRelatively speaking, the side chain scheme does not need to confirm the transaction on the main network, and at the same time, it has more mature technical solutions and the difficulty of implementation. Therefore, there is the highest TVL among the three.Due to the lack of Bitcoin’s main online intelligent contract, the confirmation scheme for Rollup’s transmission data background is still developing at this stage, and the specific landing may take a while to wait.

Bitcoin cross -chain bridge

Multibit

Multibit is a cross -chain bridge specially designed for BRC20 assets on the Bitcoin network. At this stage, it supports the migration of BRC20 assets to the four chains of Ethereum, BSC, Solana and Polygon.During the cross -chain process, users first need to send the assets to a BRC20 address specified by Multibit. After the Multibit determines the transfer of assets on the main network, the user has the permissions of casting the corresponding assets on other chains. Finally, it is necessary to complete the cross -chain.User Pay GAS Mint on another chain.At this stage, it can provide cross -chain bridges such as BRC20 assets such as BRC20. Multibit has the best interaction and the number of BRC20 assets of assets, including more than ten kinds of BRC20 assets including ORDI.In addition, Multibit also actively expands the cross -chain of assets outside the BRC20. At this stage, it supports the BTC native stablecoin protocol Bitstable’s governance tokens and the Farming and cross -chain of stablecoin.At this stage, Multibit is the most cutting -edge existence in the track.



Multibit can support cross -chain BRC20 assets. Picture sources: Multibit’s x account

Sobit

SOBIT is a cross -chain agreement established between Solana and Bitcoin’s main network. At this stage, cross -chain assets are mainly BRC20 tokens and SOBIT’s native currencies.The user pledged the BRC20 assets to the specified SOBIT address on the Bitcoin main network, waiting for the SOBIT verification network to verify the approval, and the user can map the specified address MINT mapping on the Solana network.The core of the SOBIT verification network is the framework of the verification device. It requires multiple trusted verifications to approve cross -chain transactions, which provides additional security guarantee for unauthorized transfer. This measure can significantly improve the security of the system.And robustness.The native token of SOBIT is SOBB, which can be used to pay the cross -chain cost of SOBIT cross -chain bridge, with a total amount of 1 billion.SOBB allocates 74% assets in a Fair Launch.Unlike other DEFI protocols on Bitcoin and the situation of the cross -chain protocol tokens, the SOBB coin price has entered a decline cycle after a brief upward upward upward upward upward upward upward upward increase, and it has fallen by more than 90%.The momentum may be related to the selected track selected by SobB.The service objects selected by Sobit and Multibit are highly overwhelmed, but at this stage, SOBIT can only support the cross -chain facing Solana. At the same time, there are only three types of BRC20 assets that can cross the chain.Compared with Multibit, which also provides BRC20 asset cross -chain, SOBIT is far from the completeness of ecology and cross -chain assets, so it is difficult to obtain advantages in the competition with Multibit.



Sobb token price trend, picture source: coinmarketcap

MESON FI

MESON FI is a cross -chain bridge implemented based on the principle of HTLC (Hash Time Locked Contract). At this stage, 17 mainstream public chain interactions including BTC, ETH, and SOL have been realized.During the cross -chain process, the user submitted to Meson Contract to confirm and locks the corresponding assets at the original chain after signing the transaction information. After confirming the message, Meson Contract broadcast the message to the target chain through Relayer.Among them, Relayer has three cases: P2P nodes, centralized nodes, and unclear nodes. P2P nodes have better security. The centralized node has higher efficiency and availability without passing nodes.Holding a certain asset, users can choose according to the actual situation.The LP on the target chain inspected the correctness of the POSTSWAP of Meson Contract to check the correctness of the LOCK method on the MESON Contract to lock the corresponding assets on the MESON Contract method, and then exposed the address to the Meson FI.The next operation is the process of HTLC. The user specifies the LP address and create a hash lock in the original chain. The target chain is exposed to the original image of the target chain through the exposure of the original image.



MESON FI is not a cross -chain bridge specifically for Bitcoin asset design, and it is similar to a full -chain bridge like Layerzero.But at this stage, the mainstream BTC Layer2, such as B2 Network, Merlin Chain, and BEVM, have established cooperative relationships with them and recommend the use of Meson FI for assets during pledge.According to official disclosure, MESON FI handled over 200,000 transactions during the three -day event pledged by Merlin Chain, as well as cross -chain pledge of about 2,000 BTC assets, and almost all of the mainstream chain transactions across Bitcoin.In the process of continuously released and launching pledge incentives on Bitcoin, MESON FI can attract the cross -chain of a large amount of assets, which should have brought a lot of promotion to the growth of its subsequent ecology and increasing cross -chain income.

Comprehensive comparison

In general, Meson Fi and two other cross -chain bridges belong to two types.MESON FI is essentially a full -chain cross -chain bridge, but it just reached a cooperation with many Layer2 of Bitcoin to help its bridges from assets from other networks.Sobit and Multibit are cross -chain bridges for Bitcoin native assets. The service targets are BRC20 assets and other DEFI and stable currency agreement assets on Bitcoin.Relatively speaking, there are more BRC20 assets provided by Multibit, including dozens of assets including ORDI and SATS, and SOBIT still only supports three BRC20 assets.In addition, Multibit and some bitcoin stabilization coin agreements have also established cooperative relationships, providing relevant cross -chain services and pledge income activities, and have more comprehensive service types.In the end, Multibit also has better cross -chain liquidity, which provides 5 mainstream cross -chain services with Ethereum, Solana and Polygon.

Bitcoin stabilization currency

Bitsmiley

Bitsmiley is a series of protocols based on the FINTEGRA framework on Bitcoin’s main network, including stable currency protocols, borrowing agreements and derivatives.The user can overlook the BTC through its stablecoin protocol, which can cast BitusD. When the user wants to withdraw its mortgage BTC, the BitUSD needs to be sent back to the Vault Wallet to destroy and pay a certain fee.When the pledge value is lower than a certain threshold, bitsmiley will enter the automatic clearing process of pledged assets. The calculation formula for liquidation prices is as follows:



It can be seen that the specific liquidation price is related to the real -time value of the user mortgage and the number of bitusds cast. Among them, the liquidation Ratio is a fixed constant.In the process of liquidation, in order to prevent the loss caused by the price fluctuations, the liquidation Penality was designed in Bitsmily to compensate. The longer the liquidation time, the greater the amount of compensation.The liquidation of assets takes the bidding method of Dutch to achieve the purpose of completing the asset liquidation in the shortest time.At the same time, the Bitsmiley protocol’s own surplus will be stored to the designated account and auction regularly. The auction form is a British auction with BTC bidding. This method can maximize the value of surplus assets.For this portion of surplus assets, the Bitsmiley project party will use 90% to subsidize the pledker on the chain, and the remaining 10% will be assigned to the Bitsmiley team as the daily maintenance cost.In Bitsmiley’s borrowing agreement, some settlement mechanism innovations for the Bitcoin network have also been proposed.Because the block speed of the Bitcoin’s main network is 10 minutes, it is impossible to easily introduce the prediction machine as the Ethereum to make real -time judgment of the price fluctuations in the Ethereum, so the mechanism of the third party of insurance in Bitsmiley to avoid the other party from not on time.For the delivery, users can choose to pay a certain BTC to a third party as a trading insurance (both parties need to pay). When one party fails to complete the transaction on time, the other party will compensate for the loss.



Bitsmiley provides rich DEFI and stabilized coins functions, and has also carried out many innovations in the liquidation mechanism to better protect the interests of user interests and improve the adaptation of the Bitcoin network.Bitsmiley is an excellent stablecoin and DEFI model in terms of settlement mechanism or mortgage mechanism. Besides, the Bitcoin ecosystem is still in the ascendant. Bitsmile should be able to occupy a considerable market share in the competition of stable coins.

Bitstable

BitStable is also a Bitcoin stabilization coin protocol based on excess mortgaged. At this stage, it supports ORDI and MUBI assets from the Bitcoin main network and USDT mortgages of Ethereum.According to the volatility of the three assets, BitStable sets different excess mortgage ratios. The USDT is 0%, the Ordi is 70%, and the MUBI reaches 90%.



BitStable’s token casting mode, picture source: bitstable.finance

BitStable also deployed the corresponding smart contract on Ethereum. The Dall stablecoin obtained by pledged can be exchanged for USDT and USDC on Ethereum 1: 1.At the same time, BitStable has adopted a two -currency mechanism. In addition to the stable currency DALL, it itself uses BSSB as a governance tokens. Through BSSB, it can participate in the community voting governance and share the income of the network.The total amount of BSSB is 21 million, which is allocated in two ways.The first is to earn the corresponding BSSB governance tokens by pledged the DALL tokens on the Bitcoin network. The project party will allocate 50% of the BSSB tokens through pledge rewards.The second method is two rounds of Launchpad, which was carried out on Boundance at the end of November last year, and distributed 30% and 20% of BSSB through Auction pledged auction and fixed price auctions, respectively.However, a hacking attack in the auction auction caused more than 3 million BBSB tokens to be destroyed.



However, in the process, the project team responded to the hacker attack in a timely manner. The 25% tokens that were not affected by the remaining hackers were still issued. Although the cost was paid, this measure was better resumed.The confidence of the community eventually did not cause the flash collapse after the opening.

Bitcoin DEFI

Boundce Finance

Boundce Finance consists of a series of DEFI ecological projects, including BoundceBit, Boundcebox and Boundce Auction.It is worth noting that Bounder Finance was not the earliest project to serve the BTC ecology, but a auction agreement set by Ethereum and Binance Chain. It only shifted the position while Bitcoin’s development boom in May last year.BoundceBit is an EVM compatible Bitcoin POS -side chain, and its assets used to select the verifications are Bitcoin pledged from the Bitcoin main network.At the same time, the Bouncebit introduced a hybrid income mechanism. The user can earn the income through the POS verification and related DEFI protocols on the chain by pledged the BTC assets on the BOUNCEBIT.Later, the transfer and transfer of asset safety.Boundcebox is similar to an app store in web2. Publisher can customize design a DAPP in it, that is, BOX. After completion, it is distributed by Bounterbox. Then users can choose their favorite BOX to participate in the DEFI activity.The Boundce Auction is the main part of the project in Ethereum. It mainly conducts various assets auction, and provides various auction methods including fixed -price auctions, British auctions and Dutch auctions.

Boundce’s native currency AUCTION was issued in 2021, and the multi -wheeled currency Launchpad on Bounter Finance used as a designated pledged token to get points rewards.And it is worth paying more attention to the newly built pledged chain BoundceBit, which is newly built after the Bitcoin is turned. At this stage, the pledge of pledge on the chain is opened to obtain the interactive points of the test network.Tokens and tokens will be issued in May this year.



Orders Exchange

Orders Exchange is a DEFI project that is completely built on the Bitcoin network. At this stage, it supports the price limit and market price of dozens of BRC20 assets, and plans to launch SWAP between BRC20 assets in the future.The underlying technology of Orders Exchange consists of three parts: Ordinals Protocol, PSBT and Nostr Protocol.For the introduction of Ordinals Protocol, please refer to the previous research report of Kernel>Kernel Ventures: Can RGB re -engraved the boom of OrdinalsEssencePSBT is a signature technology on Bitcoin. Users can sign the PSBT-X format content composed of Input and Output through SIGHASH_SINGLE | ANYONECANPAY. Input is a transaction that users will execute themselves, and the content contained in Output is the user execute the transaction.In the premise, another user needs to perform the OUUTPUT content and signed the SIGHASH_ALL and publicize it on the main network.In the order of Orders Exchange, the user completes the order and wait for the other party to complete the transaction through the PSBT signature.



Nostr is a kind of asset transfer agreement set by NIP-100, which improves the interoperability of assets between different DEX.All 100 million tokens in this project have been fully released. Although the project party emphasizes that the tokens are only experimental tokens and do not have any value in the White Paper.intention.There are three main directions of the distribution of the initial tokens. 45% of the tokens were allocated to traders on the Orders Exchange. 40% of the tokens were airpaced to early users and promoters, and 10% were allocated to them toDeveloper.However, it is worth noting that the 40% of the airdrop part has no detailed introduction to the distribution method, both on the official website and the official push. At the same timeDiscarding doubt.On the whole, the order of order for order for order is intuitive and clear. You can see all the buying and selling prices arranged in order. At this stage, the quality of the BRC20 sale is provided, and the quality is high.The SWAP service between the BRC20 tokens in the future should be able to capture the value of the agreement.

Alex

Alex is a DEFI Protocol established on the Bitcoin side chain Stacks. At this stage, it supports Swap, Lending, BORROW and other transaction types.At the same time, Alex also innovated the traditional DEFI transaction model.The first is SWAP. The traditional SWAP pricing model can be divided into two types: ordinary currency pairs X*y = k and stablecoin x+y = k.Set to linear combination of X*y = k and x+y = k.At the same time, Alex also introduced a thin mode of ordering under the chain on the chain of OrderBook. Users can quickly cancel the orders at zero -cost.In the end, Alex provided a fixed interest rate borrowing activity, and established a diversified mortgage pool instead of traditional single mortgage for borrowing services. Among them, the collateral consists of risk assets and risk -free assets, reducing the risk of loan.



Different from the Bitcoin ecosystem, other DEFI projects have only entered the venue after the Ordinals protocol with fire Bitcoin ecosystem. Alex started the layout of the Bitcoin DEFI ecology as early as the last round of bull market and received the financing of the seed wheel.In terms of the performance of the transaction or the type of transaction, Alex is relatively leading in the DEFI of the BTC ecosystem at this stage, and even many DEFI projects on Ethereum cannot reach the Alex trading experience.Alex’s native currency Alex Lab has a total of 1 billion pieces. At this stage, 60%of the total amount has been released. After that, you can earn some tokens by pledged or provide liquidity in Alex.The level.As the most complete DEFI project at the present stage of BTC, the market value of Alex is not high, and in this round of bull market, the BTC ecology should be important or even the main narrative, and it should bring a lot of premiums to the entire BTC ecosystem in the current stage.In addition, recently the side chain Stacks deployed by Alex will also usher in an important upgrade of Satoshi Nakamoto. At that time, Stacks will be greatly optimized in terms of transaction speed and transaction cost.Layer2.This upgrade can also greatly reduce Alex’s own operating costs and improve its transaction experience and security. More funds flow into the Stacks chain can also provide Alex with greater market and transaction demand, bringing more benefits to the agreement.

Summarize

The application of the Ordinals protocol has changed the original state of the Bitcoin’s main network that cannot achieve complex logic and the origin of assets. The idea of ​​drawing on or improving Ordinals. Various asset agreements have been launched one after another on the Bitcoin network.However, the application layer of the Bitcoin main network does not provide preparations for this service. With the outbreak of inscriptions assets, the functions that Bitcoin applications can be realized are quite backward.Fang seized hot spots.In the development of various applications, Layer2 has the highest priority, because other types of DEFI protocols only improve the trading experience, but if the main network’s transaction speed and reducing the transaction costs, the Bitcoin main network’s network’s network of the main networkAsset liquidity is always difficult to release, and the chain is full of new transactions for speculation.After the Bitcoin’s main network has completed the improvement of transaction speed and cost, the next step is the improvement of transaction experience and trading diversity.Various DEFI or stablecoin protocols provide traders with a variety of financial derivatives transactions.Finally, the cross -chain agreement that enables Bitcoin’s main network and other network assets. The cross -chain agreement on Bitcoin is relatively mature. It is mainly due to the rise of the development boom of the Bitcoin main network. Many full -chain bridges and mainstreamAt the beginning of the cross -chain bridge design, the Bitcoin network provided cross -chain services.For DAPPs such as SocialFi and Gamefi, due to the high GAS of the Bitcoin main network and the limitation of high latency, there are no phenomenon -level projects at this stage.The possibility of development will be relatively high.It is almost certain that the Bitcoin ecosystem will be at least one of the hot spots in this round of bull market, and it will even be mainstream narrative.With sufficient enthusiasm and huge market, although the ecology of Bitcoin is still developing early, I believe that the emergence of excellent projects in various tracks in this round of cattle markets.



Bitcoin application ecological panorama, picture source: kernel venntures

refer to

Bevm white paper:https://github.com/btclayer2/bevm-white-paper

What is Bitcoin Merkel’s abstract grammar tree:https://www.btcstudy.org/2021/09/07/what-a-bitcoin-Merklized-ABSTRACT- SYNTAX-TREE-MAST/AST/AREE-MAST/AREE-MAST/AREE-Mast/#MASST-7%9APE4%B8%AA%E4%BE%8b%E5%AD%90

Bitvm white paper:https://bitvm.org/bitvm.pdf

Bitcoin script principle:https://happypeter.github.io/binfo/bitcoin-scripts

Satoshivm official website:https://www.satoshivm.io/

Multibit’s docs:https://docs.Multibit.exchange/multibit/protocol/cross-Chain-process

Alex white paper:https://docs.alexgo.io/

Merlin Technical Document:https://docs.merlinchain.io/merlin-docs/

Sobit white paper:https://sobit.gitbook.io/sobit/