Bitcoin$BTC is already 9w1, why don’t people seem to be excited? Especially those who focus on the Bitcoin ecosystem~
In fact, as Bitcoin reaches new highs, the development of the Bitcoin ecosystem is becoming increasingly important, which has a lot to do with the choice of its underlying consensus mechanism. Because the proof of work adopted by Bitcoin is based on block rewards, but more than one million Bitcoins have been mined. Although this is not achieved in the short term, for the moment, there is actually a sense of urgency.
In the later stage, there will be no block rewards, and the main source of rewards for mining machines will only be transaction fees. At this stage, the demand for Bitcoin's on-chain transaction fees is not high. If this trend continues, more mining farms may be eliminated in the future, and security issues may even arise.
Therefore, it has become very important to develop the Bitcoin ecosystem and create demand for the currency standard and demand scenarios. It is just that the rise of the inscription track has brought forward this sense of urgency and market awareness.
This year, many infrastructures based on the Bitcoin ecosystem have also begun to gain momentum. BounceBit$BB is one of the new targets that has attracted much attention from the market.
and:
In the entire design of the project, BounceBit covers a wide range of businesses. This article will sort them out and hope it will help you understand the project.
Let me first sort out the narratives contained in BounceBit👇🏻
(Liquidity pledge/re-pledge/LSDFI/EVM compatible/full-chain BTCFI)
In addition, it also covers similar concepts of many popular protocols, such as EigenLayer's AVS, ENA's Delta neutral strategy, Solv's BTC asset management income aggregation, and native liquidity pledge (LIDO);
If you happen to not understand any of the projects listed above, it doesn’t matter. Put aside these complicated components and just know that BounceBit itself is a BTC ecological sidechain.
Therefore, the first knowledge point that needs to be solved is derived: What is the BTC sidechain and the consensus model of BounceBit🔻
Different from the current mainstream BTC L2 Rollup solution, the BTC side chain is an L1 independent of the BTC chain, with an independent economic system and security mechanism. That is to say, in the original Ethereum system, the on-chain security of the Rollup should be the responsibility of the Ethereum original chain, while the on-chain security of the side chain is the responsibility of itself.
When it comes to the BTC system, things are a little different. Perhaps it is to better meet the native needs of BTC or to attract funds. Among the BTC sidechain solutions currently known, BounceBit binds $BTC as one of the assets participating in the network's security consensus.
That is to say, if you want to operate nodes on these two chains, you need to pledge BTC or use BTC as an incentive. This is how the BTC POS consensus side chain works.
📍Obviously, BounceBit adopts the POS mechanism, and it also has a dual-token consensus structure. It uses BTC and its own protocol token BB as the basic assets required by network nodes to maintain the on-chain security consensus.
This dual-token consensus structure not only improves the capital efficiency of BTC itself, but also serves as a security guarantee for BounceBit, increasing the cost of chain attacks🔺
And, the most interesting thing is that, unlike other native staking chains, BounceBit brings a native liquidity staking module to this system. That is to say, although it is a POS, it also supports "liquidity liberation".
Maybe there are still some things that are not understood, so it involves the second knowledge point that needs to be solved: native liquidity staking 🔻
I will put it in the context of the Ethereum system to help you understand. Since Ethereum transformed from POW to POS, a series of concepts such as liquidity staking and re-staking all belong to the category of on-chain ecology, which means that this part has been outsourced to liquidity staking and re-staking protocols such as LIDO and Eigenlayer.
With this layer, we can further develop richer on-chain Defi, allowing Bitcoin to obtain other benefits while ensuring the BounceBit on-chain consensus.
This is also the theme of this chapter. By anchoring the liquidity tokens after Bitcoin pledge, a basket of DeFi income is provided, and the income sources of these on-chain protocols also cooperate with traditional financial institutions, thus forming the on-chain #BBCeDeFi ecological spectrum
What is the infrastructure of the BTC ecosystem doing?
Ultimately, BounceBit is working on the issue of how to liberate the capital efficiency of BTC, that is, the rate of return obtained from investing assets, or in Web3 it can be said to refer to the equity of holders.
At BounceBit, it is network staking + Defi ecosystem participation to obtain on-chain Alpha returns. In fact, the Ethereum system has already provided a template for this. The Ethereum ecosystem map surrounding ETH assets is very large. Whether it is on-chain use cases or various underlying facilities derived from them, they are actually more or less directly and indirectly empowering ETH.
On the other hand, in the past few cycles of BTC, there was basically only a consensus on funds, and there was no movement in the ecology. However, since the rise of the inscription craze last year, the ecological spectrum surrounding the BTC asset is slowly spreading. BTC itself is less suitable for on-chain ecological development than ETH. Even the electronic payment system BTC does not support a Turing-complete development environment at all.
This brings us back to what we talked about at the beginning. The Bitcoin ecosystem must be built, but other Turing-complete infrastructures need to be derived.
As a BTC sidechain L1, BounceBit has a bigger story to tell than L2. I think it is very important whether it can establish the title of BTC infrastructure in the secondary market and whether the model can run smoothly.
-Analysis of Token Economy
BounceBit gave Megadrop an 8% share at the beginning of its launch, and the initial circulation was relatively large, 19.5% close to 20%. So far, the circulation has just exceeded 20%, about 22%.
The bulk of the protocol's distribution is used for staking rewards, accounting for 35%, and it has a very long-term release design. Judging from the release curve, less than half will be released by 2032. This is actually relatively gentle for the secondary market.
Other parts, such as the proportion of community, ecology, team and investors, are all within the normal range. Investors’ release is locked for four years, and there is a one-year full lock-up as usual. It will start to be released linearly one year after the launch and will not be fully released until 2028, which is four years after TGE.
-Token trend analysis
Judging from the hourly K-line, the current BB is at a resistance position. We cannot go long at will at the moment to avoid the risk of pullback. However, its trend in the previous section has formed a W-bottom pattern, which still has a positive effect on the possible pullback in the future.
In the daily K-line cycle, BB has also made a pullback and hit the Fibonacci support level of 0.618 before going up. At present, there is still some distance to the resistance. For the target position of resistance, we give priority to 0.35, because the support rebound of 0.618 is not a strong signal of bulls.
As a reference, I hope it can help you~
