Taking stock of BTC ecological protocols, which protocols stand out?

23-10-27 12:30

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Source: 0xSekiro, Odaily Star Daily

After a 16-month hiatus, Bitcoin has once again surpassed the $30,000 mark and set a new interim high of $35,000. Behind the surge are positive developments in Bitcoin spot ETFs from institutions such as BlackRock. Regardless of whether the ETF is ultimately approved, the real-world reflection is a return to optimism in the entire Web3 industry and a more active BTC ecosystem.

Before and after the rise in Bitcoin prices, such as October 19th, Taproot Assets, a Layer 2 project in the Bitcoin ecosystem, announced its launch - Taproot became another highly anticipated protocol after the Ordinals concept in the first half of the year. In addition, on October 25th, domo, the founder of BRC-20, announced the launch of the BRC-100 protocol.

In fact, the Bitcoin ecosystem is far more prosperous than imagined, in addition to Ordinals and Taproot, there are protocols such as RGB based on the concept of "colored coins" iteration, Bitcoin smart contract platform RootStock, and recent BTC ecosystem Layer 2 Stacks with significant price increases. Incomplete statistics show that there are more than 10 protocols providing infrastructure services in the Bitcoin ecosystem, and different protocols have spawned different products.

Therefore, Odaily Star Daily has taken stock of the BTC ecological protocol.

What are the BTC ecological protocols?

RGB Protocol

RGB Protocol, derived from the "coloring" concept of the Bitcoin Classic expansion plan, and developed by the LNP/BP (Lightning Network Protocol/Bitcoin Protocol) standard association, is an intelligent contract system with scalability and privacy. Currently, there are some token products in the RGB ecosystem, such as Iris Wallet, MyCitadel, Bitmask, Shiro in the wallet track, Bitswap, Pandora Prime in the DeFi track, and Cosminmart, Infinitas in the ecosystem construction.

It is worth noting that the RGB protocol is also a route choice that is currently on par with BitVM (Bitcoin Virtual Machine). BitVM is an abbreviation for Bitcoin Virtual Machine, which is comparable to ETH's EVM. It allows developers to run complex contracts on Bitcoin without changing the basic rules of Bitcoin.

RGB also faces some problems, as shown below:

(1) Verification efficiency needs to be improved. RGB adopts client-side verification, which requires constantly tracing the initial state of the issued contract in the user's client data. If the transaction history of the asset is long, the amount of data to be verified will exponentially increase, seriously affecting the verification efficiency.

(2) The project iteration speed is too slow. Since the proposal of the RGB protocol in 2018, the first usable version, v 0.10, was not released until April of this year. Therefore, it is worth discussing whether the RGB protocol has received official attention.

(3) High development costs: Also due to the long time interval between the original content of the protocol and the available versions, many development formats and logics have not kept up with the pace of the times in a timely manner. Developers need to adapt to the early RGB specifications, which undoubtedly increases the difficulty of developers entering the field.

The most important thing is that the ecosystem is in its early stages, and there is currently no mature specific framework to showcase. Many projects within the ecosystem are mostly reproductions of standard paradigms from other ecosystem projects (such as wallets, Swaps, Launchpads, etc.), and there has been no emergence of a leading product.

Stacks：

Stacks is currently a popular project in the market. As the hottest Layer 2 project in the BTC ecosystem, its token STX has risen from $0.4 to a high of $0.73 in the past month, with a maximum increase of over 80%.

Stacks is a Bitcoin ecosystem smart contract platform that uses the Stacking consensus algorithm. It was officially launched in 2019, and its token, STX, became the first Token recognized and issued by the US SEC.

The advantage of Stacks lies in its introduction of the PoX consensus mechanism. By using Bitcoin as the base chain and Stacks as the second layer chain, in each round of transactions, the leader selected by the random function based on BTC locked by miners is responsible for packaging blocks on Stacks and sending them to the Bitcoin main chain, thereby improving the computing speed of the entire chain.

As of now, there are a total of 90 projects deployed in the Stacks ecosystem. However, these 90 products have relatively small Total Value Locked (TVL). According to DeFilama data, the total TVL of Stacks is currently 25.88 million US dollars, with the decentralized exchange ALEX ranking first with a TVL of approximately 19.66 million US dollars.

Taproot Protocol

Taproot Assets protocol: Taproot Assets is a Bitcoin meta-protocol that allows developers to issue assets on Bitcoin and Lightning Network through Taproot transactions. On October 19th, Lightning Labs officially launched the protocol, making Taproot Assets another highly anticipated BTC protocol in the BTC ecosystem, in addition to Ordinals.

As a protocol launched by Lightning Labs, Taproot Assets achieves high integration, allowing users to conduct fast and cheap transactions based on Taproot. Based on Bitcoin UTXO, Taproot is also compatible with protocols such as RGB mentioned above. In addition, Taproot is highly popular overseas and has generated some Fomo sentiment in China. Currently, the tap token has been deployed, and all chips are in the hands of the project party, which may be used for project financing and ecological airdrops.

BRC-100 ：

BRC-100 is a Bitcoin protocol built on Ordinals. In addition to its token properties, BRC-100 is also an application protocol, and developers can design DeFi and other application products based on the BRC-100 protocol.

Compared to BRC-20, BRC-100 introduces decentralized computing with FT tokens in addition to the creation, casting, and trading functions already present in BRC-20. This feature means that BRC-100 can deploy a large number of products related to tokens, such as DeFi AMM DEX and lending functions, similar to ERC-20.

Rootstock：

Rootstock is a Bitcoin smart contract platform that was proposed as early as 2018 and raised 22,000 BTC in initial funding. Its advantages mainly lie in the fact that developers can build Dapps based on the OS framework of Rootstock itself. In addition, the virtual machine of RIF (Rootstock Infrastructure Framework) is also compatible with EVM, so tokens in the Ethereum ecosystem can interact with tokens in the Rootstock ecosystem.

According to the official website data of Rootstock, its ecosystem's TVL is currently 300 million US dollars, including 3334 BTC (about 115 million US dollars). The monthly trading volume is 68400, and the active accounts are 72292. It is considered one of the more outstanding protocols in the BTC ecosystem.

As an established sidechain, the Rootstock ecosystem currently has 104 projects, covering 15 different areas including Swap, cross-chain bridges, lending, oracles, payment channels, and wallets. It can be said to be one of the more comprehensive BTC ecosystem protocols currently available.

Regarding noteworthy projects in the ecosystem, we can explore the relatively scarce lending aspect of the current BTC ecosystem, such as Sovryn on Rootstock, which specializes in uncollateralized, permissionless Bitcoin lending and margin trading. Currently, according to DeFilama platform data, Sovryn's total locked-in amount is $26.28 million.

Two questions that require contemplation

Overall, the current BTC ecosystem, despite having numerous protocols and a plethora of products based on these protocols, faces two problems that need to be addressed:

1. Number of active developers. According to Developerreport data, as the cryptocurrency with the highest market value, the current number of BTC ecosystem developers is 340, ranking only fourth in the industry, lower than the third-ranked Cosmos with 463 developers, and far lower than Ethereum, which ranks first with 1889 active developers, approximately 5.6 times that of the BTC ecosystem.