Emerging Forms of BTC L2: Fleeting Phenomenon or Spring Rebirth?
Jan.26.2024
Author: YBB Capital Researcher Zeke
Foreword
Since its inception in 2009, Bitcoin has rarely seen challenges in the realm of asset issuance and expansion solutions. There are three main reasons for this: First, the “BTC OGs” have always regarded Bitcoin as “digital gold,” a pure form of value storage, and have resisted any expansion solutions that might pose security risks. Second, as Bitcoin was originally conceived as an electronic payment system, security and stability are the cornerstones of the entire system. Consequently, Satoshi Nakamoto opted for a minimalist design approach. The Bitcoin scripting language only provides basic payment functionality and is not Turing-complete, meaning it cannot perform arbitrary calculations or loops. This sacrifice of expandability ensures the security and stability of the Bitcoin network. Third, the conception of the Ethereum Virtual Machine (EVM) by Vitalik Buterin made Turing-complete public chains a reality, attracting a large number of developers and leading to a flourishing blockchain ecosystem beyond Bitcoin.
However, today, with the continuous popularity of inscriptions and the maturation of modular concepts, Layer 2 projects on Bitcoin, resembling Ethereum’s Rollups but with a variety of construction methods, are experiencing a surge. This article aims to analyze two questions: What are the different implementation methods for Bitcoin expansion, and are these types of BTC Layer 2 projects merely a fleeting phenomenon or a spring rebirth for the oldest public chain?
The Key to Pandora’s Box
As mentioned in the introduction, Bitcoin initially discarded expandability in its design. The introduction of numerous expansion solutions today actually stems from two significant upgrades addressing Bitcoin’s inherent limitations (such as expensive transaction fees, slow speeds, and inability to handle complex smart contracts).
SegWit
Proposed in December 2015 by Bitcoin Core developers, including Eric Lombrozo of Ciphrecx, Bitcoin enthusiast Johnson Lau, and Pieter Wuille of BlockStream, SegWit was a Bitcoin expansion improvement proposal, BIP141, implemented in 2017 as a soft fork in the Bitcoin network. Its primary goal was to address the network’s transaction congestion issues. Block size plays a crucial role in determining the number of transactions that can be confirmed in each block. SegWit’s main idea focused on reorganizing block data. By applying SegWit, signature data could be separated from transaction data, increasing the number of transactions that could be stored in each block.
One of the most significant advantages of the SegWit upgrade was the increased block capacity. By removing signature data from transaction inputs, the effective block size increased from 1 MB to about 4 MB, allowing more transactions to be stored in a single block. Additionally, it fixed Bitcoin’s transaction malleability (paving the way for the implementation of the Lightning Network) by separating signatures from transaction data, preventing signature tampering and effectively avoiding the possibility of invalid transactions being permanently stored on the blockchain.
Taproot
Initially proposed by Bitcoin Core developer Greg Maxwell in January 2018, Taproot was integrated into the Bitcoin Core codebase in October 2020 by Pieter Wuille. For full deployment, node operators had to adopt Taproot’s new consensus rules. The proposal received 90% miner support and was officially activated on November 14, 2021, at block 709,632. Taproot, a significant upgrade since SegWit, aimed to enhance privacy, simplify transaction verification, increase efficiency, and improve complex smart contract handling capabilities. It comprised three different BIP proposals: BIP340, BIP341, and BIP342.
BIP340 introduced Schnorr signatures, a cryptographic signature scheme proposed by Claus Schnorr in 2008, to optimize the Bitcoin network’s verification process. Before Taproot, Bitcoin used the Elliptical Curve Digital Signature Algorithm (ECDSA). Although Satoshi Nakamoto initially favored ECDSA, Schnorr signatures offered upgrades in signature aggregation, batch verification, and privacy, improving efficiency and privacy.
BIP341 introduced the Taproot protocol, enhancing the privacy and flexibility of Bitcoin transactions. Taproot concealed multi-signature (multisig) and smart contract transactions under a single public key hash, making multi-party transactions and complex smart contracts appear as single-party transactions on the blockchain, thus enhancing transaction privacy.
BIP342 introduced Tapscript, an upgraded version of the original Bitcoin script (the programming language of the Bitcoin protocol that determines how to lock and unlock transactions). Tapscript, essentially a collection of opcodes with commands, supported the implementation of the other two BIPs. It also removed the 10,000-byte script size limit, providing a better environment for creating smart contracts on the Bitcoin network. (This upgrade also laid the foundation for the birth of Ordinals, as the Ordinals protocol utilizes Taproot’s script-path spend scripts to implement additional data.)
The upgrades of SegWit and Taproot facilitated the rapid development and emergence of two expansion solutions: the Lightning Network and the inscription ecosystem (BRC-20, ARC-20, etc.). On the other hand, to compensate for the inability to implement complex smart contracts, various execution layers with different implementation methods began to enter the BTC ecosystem.
Overview of Expansion Solutions:
Unlike Ethereum’s Layer 2, which has a unified approach (although Vitalik hasn’t explicitly defined which solution is Layer 2, Rollup is generally referred to, and the implementation methods are quite similar, usually differing significantly only in the method of validating data authenticity), BTC Layer 2 lacks a unified definition and approach. If we consider any expansion solution as Layer 2, then based on the current required implementation methods, they can be broadly divided into the following five categories. (Some project introductions in the classification are excerpted from our past articles “A Thousand Trees, A Million Pear Trees in Bloom: An Overview of the Bitcoin Ecosystem” and “A New Journey for Digital Gold: Exploration and Protocol Innovation in the Bitcoin Ecosystem.” Read the full articles for more details.)
1. Sidechains:
Overview: The first complete technical paper on Bitcoin sidechain solutions was written by researchers at Blockstream and published in 2014, but this approach was later abandoned. In 2016, Blockstream proposed pegged sidechains as a possible way to extend Bitcoin. Sidechains are often referred to as trust-minimized blockchains, generally independent blockchains connected to the main chain via two-way cross-chain bridges. They allow payments with external cryptographic assets (native assets of another blockchain). The most meaningful benefits achievable through sidechains include user asset issuance, stateful smart contract support for DeFi solutions, commitment chain expansion, faster settlement finality, and enhanced privacy.
Verification: Sidechains typically use their own consensus mechanisms and have a set of independent validators. Assets need to be locked when transferring from the main chain to the sidechain and unlocked when returning to the main chain. Validators ensure the legality of these transfers.
Drawbacks: Potential centralization due to a small number of nodes, not inheriting the main chain’s security, etc.
Stacks:
Stacks, though not directly referred to as a sidechain, is still controversially categorized as one. It aims to link itself to the Bitcoin chain through its unique “Proof of Transfer” (PoX) consensus mechanism, achieving high decentralization and scalability without additional environmental impact.
Stacks is an open-source Bitcoin Layer 2 blockchain that introduces smart contracts and decentralized applications to Bitcoin. Initially known as Blockstack, its foundational work began as early as 2013. Stacks’ technical architecture includes a core layer and subnets, offering developers and users a choice between the two. The main difference lies in the mainnet’s high decentralization but low throughput, while subnets have lower decentralization but higher throughput.
Liquid:
Liquid is not only a Bitcoin sidechain but also a settlement network for exchanges, connecting cryptocurrency exchanges and institutions worldwide. Its core features include fast settlement, strong privacy, digital asset issuance, and anchoring with Bitcoin, enabling faster Bitcoin transactions and digital asset issuance, allowing members to tokenize fiat currencies, securities, and even other cryptocurrencies.
Like RSK, Liquid relies on a federation of multi-signature to lock Bitcoin issued in the sidechain as native currency, but the actual pegging design differs significantly. Both sidechains currently have 15 functioning institutions, with Liquid requiring 11 signatures to issue Bitcoin and RSK requiring 8. Liquid seems to prioritize security over usability, while RSK prioritizes usability over security.
Overall, Liquid is a sidechain platform focused on providing shared liquidity for exchanges, emphasizing protocol simplicity, security, and privacy.
RSK:
RSK, also a sidechain with its native token RBTC, aims to be a cornerstone of financial inclusivity, focusing on decentralized finance (DeFi). RSK is a stateful smart contract platform secured by Bitcoin miners, enhancing the Bitcoin ecosystem’s value by expanding the use of Bitcoin currency. Decentralized applications can be written using the Solidity compiler and Web3 standard library, ensuring Ethereum compatibility. Additionally, it can expand Bitcoin payments through more on-chain space and off-chain transactions provided by the RIF Lumino payment channel network.
RSK aims to address a broader set of use cases by adopting a stateful VM to improve openness and programmability, porting Ethereum’s dApps and tools to RSK, while Liquid focuses on being an extremely efficient tool.
Drivechain:
Drivechain is an open-source Bitcoin sidechain protocol that allows customization of different types of sidechains according to specific needs. BIP-300/301 proposes the concept of “allowing developers to add features and functionalities to the Bitcoin world without actually modifying the Bitcoin core code.” By creating a Bitcoin sidechain secured by Bitcoin miners, it implements various Layer 2 scalability use cases on the sidechain while ensuring Layer 1 security with Bitcoin. It’s worth noting that BIP-300 “Hashrate Escrows” compresses 3–6 months of transaction data into 32 bytes through “Container UTXOs,” and BIP-301 “Blind Merged Mining,” like RSK, maintains network security through merged mining.
BEVM (Emerging Project):
BEVM is a decentralized Bitcoin L2 compatible with EVM, using BTC as Gas. It allows all DApps that can run in the Ethereum ecosystem to operate on Bitcoin L2.
Technically, BEVM introduces the concept of Bitcoin light nodes. These light nodes synchronize the complete Bitcoin block headers to prove the determinacy of BTC network data. Simultaneously, BEVM synchronizes cross-chain related transactions and transaction Merkle proofs. Through the consensus confirmation of these data, it achieves decentralized bridging of Bitcoin assets on Layer 2.
Furthermore, to achieve decentralized cross-chain back to the Bitcoin mainnet for assets and data on BEVM, it utilizes Taproot technology’s BTC threshold signatures and POS consensus nodes. POS consensus nodes hold three private keys responsible for block production, management, and BTC threshold signatures. The BTC threshold signature private keys generate N threshold contract private keys, managing assets and data interacting with the BTC network. These consensus nodes form a ⅔ threshold custodial contract through BFT consensus, ensuring a secure and decentralized process for assets and data to cross back from BEVM to the Bitcoin mainnet. Compared to other sidechain solutions, BEVM is currently more decentralized and secure.
2.State Channels:
State channels, a concept dating back to 2015, were introduced in the “Lightning Network” protocol by Joseph Poon and Thaddeus Dryja. They represent a technology based on payment channels that facilitate transactions off-chain, achieving low-cost, high-speed, and scalable transaction processing.
Verification: Transactions within state channels occur off-chain and are only submitted to the Bitcoin main chain when the channel is closed. This approach reduces the burden on the main chain while maintaining security. Transactions within the channel are signed by the parties involved and submitted on-chain only when disputes need to be resolved.
Drawbacks: Slow development progress and the complexity of channels can lead to uncertainties, among other issues.
Taproot Assets:
On October 18, 2023, Lightning Labs released the mainnet Alpha version of Taproot Assets based on UTXO. With the completion of the mainnet version, the Bitcoin Lightning Network will become a direct multi-asset network, primarily aimed at institutions and asset issuance. It allows instant, low-cost, and high-capacity transaction applications through the Lightning Network.
Participants can deposit funds into a common off-chain wallet address (smart contract) and instantly send funds to another participant on the same contract upon payment completion. Only the final transaction results are confirmed on-chain. The Lightning Network is a significant upgrade to the Bitcoin protocol, but it also introduces a new issue: the liquidity problem for the fund-receiving participants in the network.
3. Client Verification & Single-use-seals:
Overview: In traditional blockchain systems like Bitcoin or Ethereum, transaction and smart contract verification are performed collectively by the entire network of nodes, known as “full node verification.” In 2016, Bitcoin Core developer Peter Todd proposed a new paradigm of client verification, simulating traditional contract signing to ensure privacy where only the involved parties are aware of the contract content. This approach achieves complete decentralization without third-party involvement. The concept of single-use-seals, also introduced by Todd, will be discussed in the context of the RGB protocol.
Verification: Off-chain data storage, on-chain commitment, and client verification.
Drawbacks: Slow development progress over several years and the inability of smart contracts to interact with each other, among other issues.
RGB Protocol:
RGB is an initiative by the LNP/BP Standards Association (Lightning Network Protocol / Bitcoin Protocol), a non-profit organization overseeing the development of various layers of Bitcoin, including the Bitcoin protocol, Lightning Network protocol, and RGB smart contracts. The RGB protocol is designed for scalable and confidential smart contracts on Bitcoin and the Lightning Network, aiming to run complex smart contracts on UTXO and introduce them to the Bitcoin ecosystem. Officially, it is described as a protocol suite for scalable and confidential smart contracts applicable to Bitcoin and the Lightning Network, suitable for issuing and transferring assets and broader rights. The protocol operates client-verified and smart contract systems on Bitcoin’s second layer or off-chain, based on the concepts of client verification and single-use-seals proposed by Peter Todd in 2016. Understanding the RGB protocol involves grasping four key concepts:
1. Single-use-seals:
As the name suggests, single-use-seals are like a one-time seal applied to an object needing protection, ensuring it has only two states: open and closed. This guarantees the content is used only once, preventing double-spending. Compared to Ethereum’s accounts, Bitcoin’s network only contains wallet addresses, where Unspent Transaction Outputs (UTXO) can act as seals.
Understanding single-use-seals requires knowledge of UTXO, a ledger model where each transaction generates inputs (Input) and outputs (Output). The output of a transfer transaction is the recipient’s Bitcoin address and the transfer amount, stored in the UTXO set to record unspent transaction outputs. Each input points to an output from a previous block, making these transactions traceable. Thus, Bitcoin’s transaction outputs can serve as single-use-seals.
According to RGB’s official documentation, a UTXO can be seen as a seal: it locks when created and opens when spent. Bitcoin’s consensus rules ensure that an output can only be spent once. Therefore, if used as a seal, the same incentives that ensure Bitcoin consensus rules are enforced will also guarantee that such a seal can only be opened once.【2】
2. Client Verification and Deterministic Bitcoin Commitments:
In Bitcoin’s PoW consensus, state verification doesn’t require global execution by all parties involved in the decentralized protocol but is transformed into a short, deterministic Bitcoin commitment using cryptographic hash functions and other methods. This commitment requires a “proof-of-publication” and possesses three main characteristics: receipt proof, non-publication proof, and membership proof. In essence, OpenTimeStamps can be considered the first protocol in this field, with RGB as the second. Other protocols can also utilize and employ these themes, forming a series of client verification protocols.【3】
RGB uses the Bitcoin blockchain to prevent double-spending by committing RGB state transitions in specific Bitcoin transactions. It spends the current UTXO holding the rights to be transferred, ensuring multiple state transitions can be committed to a single Bitcoin transaction and each state transition can only be committed once to a Bitcoin transaction (otherwise, double-spending occurs).
3. Compatibility with the Lightning Network:
As stated on the RGB website, when a state transition is committed to a Bitcoin transaction, it doesn’t need to be settled on the blockchain immediately. It can be part of a Lightning Network payment channel, gaining security from it while using the Lightning Network’s payment channels to facilitate the circulation of many digital assets for RGB.
4. RGB v0.10 Version Update:
According to Waterdrip Capital’s interpretation, the upgrade mainly reflects enhancements in flexibility and security, summarized as follows:
RGB was conceptualized as early as 2016 but has not gained widespread attention and application despite years of development. This may be due to the limited functionality of early versions and the high learning barrier for developers. With the arrival of RGB v0.1, the future potential of RGB in offering more imaginative possibilities is worth anticipating.
4. Inscriptions:
Overview: In January 2023, Bitcoin developer Casey Rodarmor released the Ordinals protocol, a Bitcoin-based asset issuance protocol consisting of two core components: Ordinals theory and Inscription. The Ordinals protocol author, Casey, carries content on UTXO through inscription, assigning unique identifiers to each of the 21 trillion Satoshis, the smallest unit of Bitcoin. Inscription is the process of associating content with Unspent Transaction Outputs (UTXO). The asset issuance process of the Ordinals protocol is akin to writing information into witness data and recording token information in JSON format as BRC20.
Verification: Inscriptions require indexers to extract JSON information from the inscription and record balance information in an off-chain database. Verifying an inscription involves extracting JSON data and ensuring it complies with the rules specified in its documentation.
Drawbacks: Indexers have various centralization issues (even leading to transaction balance errors), occupy mainnet space, and are overly fragmented.
Ordinals Protocol (BRC-20):
1. BRC-20 Tokens BRC-20, an experimental Bitcoin token standard created by Domo on March 8, 2023, utilizes JSON data from Ordinal Inscriptions. The BRC-20 standard enables users to easily implement key functions such as Token contract creation (Deploy), Token minting (Mint), and Token transfer (Transfer). As of December 18, 2023, the total market capitalization of the BRC-20 track reached $640 million, highlighting the significance of this token standard in the Bitcoin ecosystem and opening new possibilities for digital asset development.
2. BRC-100 BRC-100, built on Ordinals, is a Bitcoin DeFi protocol that, besides its token attributes, serves as an application protocol. Developers can design DeFi and other application-based products using the BRC-100 protocol. According to developer MikaelBTC, BRC-100 introduces protocol inheritance, application nesting, state machine models, and decentralized governance, bringing computational capabilities to the Bitcoin blockchain and enabling the creation of native Bitcoin decentralized applications like AMM DEX and lending platforms.
3. Ordinals NFT Software engineer Casey Rodarmor launched the Ordinals NFT protocol on the Bitcoin blockchain, now officially live. Users can create and own their NFTs on Bitcoin’s smallest unit, Satoshi (SAT), using a random but logical ordering system that makes each satoshi unique. Ordinals NFTs differ from Ethereum NFTs in three main aspects: - All related data is stored on the Bitcoin network, independent of external storage like IPFS or AWS S3; - Permissionless: Transactions can be completed in a decentralized manner through PSBT without needing “authorization”; - The minting cost is proportional to the transaction volume.
4. BRC-420 As introduced in the official RCSV Gitbook, BRC-420 focuses on modularizing on-chain inscriptions, encompassing two key parts: metaverse standards and royalty standards. These define open and flexible formats for assets in the metaverse and set specific on-chain protocols for creator economics. Unlike other Ordinals protocols that use single inscriptions, the BRC-420 protocol employs multiple inscriptions in a recursive combination.
Atomicals Protocol (ARC-20):
Atomicals, also known as the atomic protocol, covers various asset types, including homogenized tokens (ARC20 standard), NFTs, Realms, and Collection Containers. As a UTXO-based blockchain asset issuance protocol, Atomicals offers two minting methods: decentralized minting and direct minting. Decentralized minting introduces Bitwork Mining, a PoW (Proof of Work) based minting method. The protocol uses Bitcoin’s smallest unit, Satoshi, as the minimum unit for issuing assets, with the smallest divisible unit of ATOM currently set at 546, allowing for the sale or transfer of a minimum of 546 ATOMs.
Atomicals Protocol differs from Ordinals in asset transaction ordering, as it does not rely on third-party sorters. It can be used to create (mint), transfer, and upgrade various digital items, including native NFTs, games, digital identities, domain names, and social networks. Additionally, the protocol supports the creation of interchangeable tokens, named ATOM (different from Cosmos’s ATOM, only sharing the same name).
Recently, founder Arthur shared his views on meta-protocols in an interview on December 13. He sees meta-protocols as a novel approach that allows developers to create their data structures and rules without being confined to existing rigid structures. Protocols representing meta-protocols, like the Atomicals Protocol, are emerging, providing developers with opportunities to create new structures using smart contracts. This trend enables creators to focus more on developing smart contract applications within the Bitcoin ecosystem, advancing the process of digital innovation.
Atomicals Asset Types:
ARC20: A token format standard similar to BRC20 on Ordinals;
Realm: A new concept proposed by Atomicals, intended to revolutionize traditional domain names, to be used as a prefix;
Collection Containers: A data type for defining NFT Collections, mainly used for storing readable NFTs and related metadata. As of December 20, 2023, the highest market capitalization belongs to TOOTHY, with a total market value of 46.12 BTC and a 7-day trading volume of 25.74 BTC.
5. Rollup:
Overview: Rollup is a Layer 2 scalability solution designed to enhance the performance and throughput of blockchain networks, particularly for smart contract platforms like Ethereum. Rollup reduces the burden on the main chain by moving most transaction data and computations off-chain, recording only summaries or aggregates of transactions on-chain. The core idea of Rollup is to combine the security of on-chain operations with the efficiency of off-chain processes.
Verification: The underlying blockchain only needs to compute proofs submitted to smart contracts to verify activities in the Layer 2 network (in the case of Optimistic Rollup, verification is only needed when disputes arise). Unexecuted original transaction data is stored as Calldata. However, since the Bitcoin network itself cannot verify Data Availability (DA), current DA verification methods are accomplished through special means, such as inscribing DA onto the mainnet and verifying it with their own solutions, or like BitVM, which uses Taproot address matrices or Taptrees to implement various program instructions similar to binary circuits, replicating a verification process similar to Ethereum’s mainnet for Rollups. Therefore, the architecture of such projects is always unique and varied.
Drawbacks: Currently, no project can perfectly replicate the verification method of Rollups on Ethereum. They are either theoretical or make trade-offs within the impossible trinity, and the market is mixed with various projects.
BitVM (Emerging Project & New Idea)
BitVM originates from a white paper titled “BitVM: Compute Anything On Bitcoin” by ZeroSync project lead Robin Linus. BitVM stands for “Bitcoin Virtual Machine.” It proposes a solution for Turing-complete Bitcoin contracts that can be verified on Bitcoin without changing the network’s consensus, allowing developers to run complex contracts on Bitcoin.
BitVM’s system is similar to Optimistic Rollup and the MATT proposal. It is based on fraud proofs and challenge-response protocols, requiring no changes to Bitcoin’s consensus rules. It mainly uses hash locks, time locks, and large Merkle trees. The core idea is that the prover claims to compute a specific output from a given input through a given function. If the prover’s claim is false, the verifier can present a concise fraud proof and penalize the prover (similar to Optimistic Rollups). In this system, the prover commits to the correctness of the program bit by bit, while the verifier refutes the prover’s false claims through a series of carefully designed challenges. Both parties pre-sign a series of transactions to resolve potential disputes. The protocol implementation starts with the prover and verifier compiling the program into a huge binary circuit, with the prover submitting this circuit in a Taproot address containing leaf scripts for each logic gate in the circuit. They pre-sign a series of transactions for use in the challenge-response game. The key part of this system is the commitment to bit values, allowing the prover to determine specific bit values as “0” or “1” and forcing the prover to make a decision within a specific time using time locks.
BitVM achieves logic gate commitments using simple NAND gates, proving that any circuit can be expressed. Gates are committed to express any circuit, combining each step of execution in the same master root address. To refute incorrect claims, the verifier uses a series of pre-signed transactions to challenge the prover’s statements. The prover can set input values by revealing the corresponding bit commitments, and in uncooperative situations, the verifier can force the prover to reveal their inputs on-chain.
BitVM is the closest solution to replicating ETH Rollup, with infinitely stacked binary circuits (Taproot addresses) forming a Turing-complete virtual machine. However, its implementation process is extremely challenging, akin to trying to run a large computer program on a basic calculator. Although currently just an ideal concept, it still provides some direction for future developments.
ARC-20 AVM (Emerging Project)
In an interview on December 13, 2023, Atomicals founder Arthur stated that meta-protocols are a new method for developers to create their data structures and rules without being restricted by existing rigid structures. Meta-protocols like the Atomicals Protocol are emerging, allowing developers to create new structures using smart contracts. This enables creators to focus on the Atomicals Virtual Machine (AVM), which allows developers to build smart contract programs on the Bitcoin network.
Bison (Emerging Project)
Bison is a native Bitcoin ZK Rollup that enhances transaction speed while implementing advanced features on native Bitcoin. Developers can use ZK Rollup to create innovative DeFi solutions, such as trading platforms, lending services, and automated market makers. Unlike other L2 solutions that adopt EVM compatibility, Bison uses the Cario VM (same as StarkNet) and primarily revolves around inscriptions for ecosystem construction.
Technically, Bison is similar to most Ethereum Rollups, built on the execution layer of the underlying blockchain. However, its unique aspect lies in verification.
Bison records state and Zk proof inscriptions on Ordinals, with the verifier’s front-end client performing the proof. First, the verifier receives the Zk proof and public inputs, where public inputs are publicly known values in the computation. The verifier then checks the proof format for correctness and evaluates constraints without constructing polynomials. A low-degree test algorithm ensures the polynomials’ low degree, followed by verifying the combined polynomial for correctness. Finally, the verifier checks cryptographic commitments and other cryptographic primitives, such as Merkle proofs, to ensure consistency with the proof and public inputs. If all steps pass verification, the verifier accepts the proof as valid; otherwise, it is rejected. Essentially, Bison is a sovereign Rollup that verifies through its nodes, with DA being saved and publicly displayed on the BTC mainnet in inscription form, not fully inheriting BTC’s decentralization and security.
B² Network (Emerging Project)
B² Network is a ZK Rollup compatible with EVM, based on Bitcoin zero-knowledge proof verification commitments. Transaction data and Zk proof commitments are recorded on the Bitcoin mainnet and confirmed through a challenge-response mechanism. However, the main issue remains the mainnet’s inability to verify DA.
B² Network’s technical architecture includes two basic layers and a challenge mechanism: the Rollup layer and the DA layer. In the Rollup layer, B2 uses ZK Rollup combined with zkEVM solutions to execute user transactions in the Layer 2 network and output related proofs. User transactions are submitted and processed in the ZK Rollup layer, where user states are also stored. Batch proposals and generated Zk proofs are then forwarded to the DA layer for storage and verification.
The DA layer comprises decentralized storage, B2 nodes, and the Bitcoin network. This layer is responsible for permanently storing copies of Rollup data, verifying Zk proofs, and inscribing these data onto the mainnet as inscriptions. Additionally, the verification system performs decentralized verification and generates Bitcoin Commitments. Finally, since the mainnet cannot verify DA, the Bitcoin Committer Module writes the Zk proof’s Commitment onto the mainnet and sets a time-locked challenge, allowing challengers to dispute the Zkp verification’s Commitment. If no challengers appear during the time lock or the challenge fails, the Rollup is ultimately confirmed on Bitcoin. Conversely, if the challenge succeeds, the Rollup is rolled back. Successful challengers are rewarded by taking the assets locked on the BTC mainnet, while in case of failure, nodes retrieve the assets. The project’s concept is commendable but still cannot fully inherit BTC’s decentralization and security.
Conclusion
For years, BTC has primarily functioned as digital gold in value storage. The recent ecosystem explosion has given Rollup projects a chance to escape the dominance of Ethereum’s “Big Four” (OP, ARB, Zks, Stark) and transform BTC into a productive asset. Unfortunately, these projects only resemble Ethereum in form and have not fully inherited BTC’s decentralization and security values. The main reason is the difficulty in breaking through the challenge of BTC’s inability to verify. The current market is also chaotic, with some projects even forking others’ solutions (SatoshiVM) and fraudulently raising funds under the guise of BTC L2. Amidst the BTC gold rush, careful project evaluation is essential to avoid falling into pitfalls due to FOMO.
About YBB
YBB is a web3 fund dedicating itself to identify Web3-defining projects with a vision to create a better online habitat for all internet residents. Founded by a group of blockchain believers who have been actively participated in this industry since 2013, YBB is always willing to help early-stage projects to evolve from 0 to 1.We value innovation, self-driven passion, and user-oriented products while recognizing the potential of cryptos and blockchain applications.
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