Bitcoin is the most secure and decentralized blockchain network, but it does not support smart contracts, can only handle about 7 transactions per second, and transaction confirmation may take dozens of minutes. On January 30, the NFT protocol "Ordinals" was launched on the Bitcoin mainnet. As of March 2, the number of NFTs on Ordinals has exceeded 250,000.
Although this move has caused a lot of controversy, "Bitcoin fundamentalists" believe that the Bitcoin network should be kept as simple and stable as possible, but "Bitcoin extenders" hope to bring more financial use cases to Bitcoin. In any case, the emergence of Ordinals triggered another wave of development of applications on top of Bitcoin. In this article, PANews will take stock of the recent development of common Bitcoin expansion plans.
Stacks
Stacks adopts a pyramid-shaped stack. The bottom layer is the Bitcoin basic settlement layer, then Stacks adds smart contracts and programmability, and the top layer is Hiro which adds scalability and speed. It uses its own smart contract language Clarity and writes historical transaction records into the Bitcoin network, so Stacks is a Layer 2 of Bitcoin (previously Stacks also called itself Layer 1). Stacks issues its own token $STX. As a representative of Bitcoin smart contracts, $STX is also one of the best-performing assets in recent times.
Since the applications currently built on Stacks are still mainly Arkadiko Protocol, ALEX, Stackswap, CityCoins, and STX NFT, which have not changed much from the statistics compiled by PANews a year ago, we will not go into details here. Related reading: "The Stacks network ecosystem that provides smart contracts for Bitcoin has just started, taking stock of the main projects in one article."
According to data from Defi Llama, funds on Stacks have indeed increased significantly recently. In the past 30 days (February 1st to March 2nd) TVL rose from US$7.56 million to US$26.8 million, an increase of 254%. The DEX ALEX has grown the most. The TVL has increased by 316% in the past month, and the price of $ALEX has also increased from US$0.015 on February 1 to US$0.098 now.
Rootstock/RIF
Rootstock (RSK) is an EVM-compatible side chain on Bitcoin. It uses the same SHA-256 algorithm as Bitcoin. Bitcoin miners can perform "merged mining" when mining. It requires additional resource consumption and at the same time can earn transaction fee income from Rootstock. The native token in Rootstock is Smart BTC (RBTC), a Bitcoin-anchored currency, which is also used to pay transaction fees.
RIF (Rootstock Infrastructure, RIF) is a platform built on Rootstock, aiming to provide developers with blockchain infrastructure and services, including domain names, storage, authentication, etc., to support the development and deployment of dApps. Although Rootstock does not issue other tokens except RBTC, Rootstock and RIF are developed by the same company IOV Labs, and RIF issues its own token $RIF.
As can be seen from Defi Llama, Rootstock’s TVL is US$56.51 million, but the recent growth is not obvious, rising by 3% in the past 30 days. There are projects in the ecosystem including DEX, lending protocols, stablecoins, etc., and cross-chain assets from other chains such as Ethereum can also be used. But even if Rootstock supports EVM, funds in ecological projects have not increased significantly in the past 30 days. The largest increase is DEX Sovryn. The current TVL is 20.24 million US dollars, an increase of 18.31% in the past month.
Liquid Network
Liquid Network is a sidechain technology (also called Layer 2) launched by Blockstream in September 2018, aiming to provide Bitcoin users with a faster and more convenient transaction experience while ensuring the security and privacy of transactions. . It is maintained and governed by the Liquid Joint Council, which includes exchanges, financial institutions, and other Bitcoin-focused companies.
In addition to fast, cheap, and private transfer functions, Liquid Network can also implement various types of smart contract functions, such as building DeFi applications (DEX Sideswap, lending platform Hodl Hodl, etc.), issuing stable coins, issuing security tokens, and minting NFTs , conduct multi-signature transactions, etc.
Liquid Network mainly uses L-BTC, which is 1:1 anchored by Bitcoin. Liquid’s official website shows that the recent issuance of L-BTC on the network has remained stable, currently 3,551. The data for January and February were respectively For 3567 and 3562 pieces.
Lightning Network
Bitcoin Lightning Network is a Bitcoin Layer 2 protocol that improves Bitcoin transaction speed and privacy by establishing a payment channel between transaction parties.
After the payment channel is established, both parties can send off-chain transactions to conduct transactions. The transaction is only recorded between the two parties of the channel and does not need to be confirmed in the Bitcoin network, so the transaction speed is fast and the cost is low. Both parties to the transaction can submit transaction records to the Bitcoin network for settlement at any time, thereby realizing the transfer of Bitcoin.
According to data from 1ML, there are currently 5,424 BTC in the Lightning Network, an increase of 2.2% in the past 30 days, with 16,291 nodes and 76,297 channels.
Statechains
Statechains is a scaling technology for BTC off-chain transfers. It is similar to the Lightning Network, but not exactly the same. In the Lightning Network, the transfer of assets is transferred through ownership of the channel, but in Statechains, the transfer of assets is transferred through ownership of the BTC deposit (UTXO) private key (temporary key).
Statechains first creates a multi-signature wallet between the depositor and the Statechain entity with multiple private keys that hold the Bitcoins associated with it. The holder of the private key can create transaction records on Statechain and transfer the private key to others, thereby realizing the transfer of Bitcoin assets. Transactions in Statechain also do not require confirmation for each transaction, thereby increasing transaction speed and reducing handling fees.
One solution for Statechains technology is implemented through the Mercury wallet created by Commerceblock.
The current total deposits in the Mercury wallet are 23 BTC and the total withdrawals are 19.8 BTC, and there are still few applications. The liquidity of BTC must be a specific amount, such as 0.001 BTC, 0.01 BTC, 0.1 BTC, etc., so when making a deposit or transfer, only a specific amount can be used.
Drivechain
Drivechain is a Bitcoin open side chain protocol that can customize different side chains according to different needs. Its design comes from two Bitcoin improvement proposals, BIP 300 "Hashrate Escrows" which compresses 3-6 months of transaction data into 32 bytes through "Container UTXOs", and BIP 301 "Joint Blind Mining" "(Blind Merged Mining). Like RSK, the security of the network is maintained by existing Bitcoin miners through federated mining.
Drivechain emerged to introduce more features to Bitcoin while maintaining the security and decentralization of Bitcoin, competing with Ethereum, Zcash, Bitcoin fork chains, etc. These side chains also use Bitcoin’s Anchored currency, used for functions such as transfers.
In December 2022, Layer2 Labs, the development company of Drivechain, announced the completion of a US$3 million seed round of financing. Currently, the project has not found any large-scale applications.
summary
Among the above Bitcoin expansion plans, Stacks and RSK are more common. RSK supports EVM and has more funds in on-chain applications. However, only Stacks has seen faster data growth recently.
Among the several solutions mainly used for BTC payment, Lightning Network has the most BTC. Liquid Network is also actively preparing for use cases such as DeFi and NFT. Statechains has limited applications. Although Drivechain can customize various side chains, it has not yet seen a big impact. Scale application.