Author: NingNing
The industry cycle resonates with the macro-financial cycle. The crypto industry is in a similar overall confusion as in 2019. At this stage, not only is liquidity drying up, but narratives also seem to be drying up. The market is not only lacking interest in VC narratives, but is also tired of anti-VC meme narratives.
Just like every time there is a philosophical crisis, people will return to Plato to find a way out. When the crypto industry is in crisis, we also need to return to Bitcoin and Satoshi Nakamoto.
As Cipher, the founder of the CKB ecosystem RGB++ protocol, explained in his latest blog, the crypto industry needs to reflect on the path dependence of Ethereum's "on-chain computing", return to P2P economics, move computing off-chain, and move verification on-chain.
Therefore, in choosing the Bitcoin programmable expansion solution, CKB respects the Bitcoin community’s consensus that “verification is more important than computation” and did not replicate Ethereum’s Rollup solution and Restaking+AVS solution. Instead, it paid tribute to the Bitcoin Lightning Network and launched the CKB version of the Lightning Network Fiber Network (CFN for short).
The official description of CFN is based on the next generation public lightning network composed of CKB and off-chain channels. The actual technology stack used mainly includes: CKB's Cell (a UTXO that supports Turing completeness), RGB++'s isomorphic binding and Leap's bridgeless cross-chain, Bitcoin script's HTLC (hash time lock) and the state channel of the lightning network.
A standard CFN payment channel lifecycle is as follows:
Open channel - Lock assets - Create HTLC - Update status - Verify transaction - Transaction completed - Close channel - Submit final status
Similar to the Bitcoin Lightning Network, CFN’s channels can remain active at all times. N channels that remain active all the time use the “multi-hop” mechanism to form an off-chain asset payment/clearing network.
But CFN is not a 100% replica of the Lightning Network. Compared with the Lightning Network, CFN has the following key new features:
Multi-asset support: no longer limited to a single currency, paving the way for complex cross-chain financial applications.
Programmability: Turing-complete smart contracts based on CKB support more complex conditional execution and business logic.
Cross-chain interoperability: Natively designed to support Lightning Network interaction with other UTXO chains (such as BTC).
More flexible state management: Thanks to CKB's Cell model, CFN can manage channel status more efficiently.
It is particularly worth mentioning that CFN reserves space for future upgrades to more advanced payment channel technologies (such as PTLC). This forward-looking design gives CFN an advantage in technological evolution.
Since CFN and Bitcoin Lightning Network have technical isomorphism (such as the same hash algorithm and time lock script), the two naturally have the basis for realizing cross-chain atomic swaps.
Let's understand this process with a concrete example:
Alice (CKB) wants to send 100 CKB equivalent BTC to Bob (BTC)
Bob generates a secret S and gives its hash H(S) to Alice
Alice creates an HTLC on CFN and locks 100 CKB, provided that the correct S
At the same time, a corresponding HTLC is also created on the BTC Lightning Network to lock an equivalent amount of BTC.
Bob reveals S to claim BTC, and S is also obtained by the node in the middle link
The node in the middle uses S to unlock Alice’s 100 CKB on CFN
The atomic cross-chain swap between CFN and Lightning Network is not limited to the native assets of the BTC and CKB chains, but also supports RGB++ assets and Taproot assets, such as the ecosystem’s first Meme coin Seal, and the stablecoin RUSD of the Bitcoin ecosystem’s stablecoin protocol Stable++.
CFN provides a fast and low-cost transfer channel for RGB++ assets. Users can quickly trade various RGB++ assets on CFN without having to settle on the CKB main chain every time.
At the same time, RGB++ provides CFN with a rich variety of asset types, which greatly expands the application scenarios of CFN and makes it no longer limited to simple value transfer.
The combination of the two can achieve "Bitcoin-level security + Ethereum-level functionality + Lightning Network-level speed". This is a very competitive combination.
Focusing on the three major business models of the crypto industry, asset issuance, lending, and trading, CFN’s potential application scenarios include:
Cross-chain liquidity mining: Users who provide cross-chain liquidity for assets supported by CFN can receive rewards, stimulating the issuance and trading of new assets, such as building a meme coin launch platform for the Bitcoin ecosystem based on CFN.
Atomic cross-chain lending: Users can lock assets on the BTC network and lend stablecoins of corresponding value on the CKB network without having to trust a third party.
Cross-chain DEX: CFN can be used to build a decentralized exchange that supports fast and low-cost transactions of BTC, CKB and various RGB++ assets.
If the above potential scenarios can eventually be implemented, the Bitcoin ecosystem can use CFN's cross-chain atomic swap capabilities to realize DeFi applications such as native stablecoins, native lending, and native DEX. Therefore, CFN is not just a CKB version of the Lightning Network, but a programmable expansion solution with global significance in the Bitcoin ecosystem.
CFN is about to release the test network. We can observe its future development from the following indicators:
The timing of successful interoperability with the BTC Lightning Network;
The growth curve of cross-chain transaction volume after the mainnet launch;
The number and quality of cross-chain DApps developed based on CFN;
The adoption level of RGB++ assets on CFN.
To sum up, among the many Bitcoin programmable extension solutions including Babylon, Merlin, BoB, and Mezo, CFN is unique. It chooses to return to the classic paradigm of Bitcoin Lightning Network and innovates it, thus possessing Bitcoin nativeness with strong consensus and extremely high scalability. It has the potential to surpass its competitors and ultimately win in the future BTCFi infrastructure competition.
The end.
