Author: Mensh, ChainCatcher
Editor: Nianqing, ChainCatcher
Since the beginning of the year, the 'national inscription' craze has shown the market's enthusiasm for asset issuance within the Bitcoin ecosystem, but due to the non-Turing completeness and other characteristics, achieving Bitcoin expansion is not an easy task, and various expansion solutions are still competing fiercely. As Bitcoin approaches $100,000, with an increase of nearly 50% since November, the long-awaited bull market signal has finally sounded. The subsequent surge in Bitcoin trading volume and the Bitcoin ecosystem have also prepared for the influx of market funds after half a year's accumulation. The super protocol RGB++, which integrates expectations and fundamentals, has enormous explosive potential.
Isomorphic binding and Leap bridge-less cross-chain work in tandem for flexible and efficient asset issuance
The idea of issuing assets on Bitcoin has been around for a long time. As early as 2013, Colored Coins was the first attempt to issue assets on the Bitcoin mainnet. Subsequently, protocols such as Runes, Atomicals, Ordinals, RGB, Taproot, and BRC20 emerged on the Bitcoin ecosystem. However, due to the non-Turing-completeness of Bitcoin's UTXO model, asset issuance on the Bitcoin ecosystem has always struggled to balance Bitcoin's native characteristics and flexibility.
Taproot Asset on the Lightning Network can achieve very high TPS, but it does not support complex smart contracts and only supports tokens. Ordinals have poor extensibility as art pieces, and based on this, BRC20, which imitates ERC20, only stores data in the BTC output script and cannot transfer or mint. The tokens issued by Atomicals and Runes have been optimized to some extent, but the transfer calculations are entirely handled by the BTC base network, thus constrained by Bitcoin's block creation speed and capacity.
RGB chooses to provide a scalable smart contract system for Bitcoin and the Lightning Network, completing off-chain scaling through UTXO combined with client verification, solving programmability issues. However, on the asset issuance level, users cannot see others' asset statuses, which can easily lead to client data silos, and the lack of data transparency severely hinders the development of applications like DeFi.
To solve the RGB problem, RGB++ uses isomorphic binding and Leap bridge-less cross-chain technology. Simply put, isomorphic binding allows users to operate their RGB++ assets on the UTXO chain directly using their Bitcoin accounts without running a client for verification. The Leap function enables free transfer of RGB++ assets between L1 (Bitcoin blockchain) and L2 (CKB blockchain or other UTXO chains). Thus, RGB++ provides a new way for cross-chain asset movement based on smart contracts, allowing assets to flow freely in a native way on isomorphic chains. This is currently the most flexible and scalable solution for asset issuance while addressing the pain points of Bitcoin's native nature and programmability.
The series of solutions from CKB RGB++ has received investment and adoption from core Bitcoin players in the West, such as Bitcoin Magazine. The mining community has also shown strong support for this solution.
Rapid landing, an ambitious integrator of the Bitcoin ecosystem
Tracing back to the team behind the RGB++ protocol, it is the veteran project team of the Bitcoin ecosystem, CKB. As early as 2018, CKB secured a total of $28 million in financing from several well-known investment institutions, including Polychain Capital, Sequoia China, Wanxiang Blockchain, and Blockchain Capital. The founding team behind it has been deeply involved in the crypto industry for many years. For example, chief architect Jan Xie has contributed to the Ethereum clients Ruby-ethereum and pyethereum for a long time and has also collaborated with Ethereum founder Vitalik Buterin to develop the Casper consensus and sharding technology.
Years of development experience in the Bitcoin ecosystem and support from star capital behind it have allowed RGB++ to land rapidly. Since the project launched in February 2024, RGB++ took less than 2 months to go live on the mainnet, and in July it was upgraded to RGB++ Layer, quickly bringing the vision of building the BTCFi ecosystem between BTC, CKB, Cardano, and other general UTXO public chains into engineering products. Since the mainnet went live, hundreds of ecological projects have utilized this protocol for asset issuance.
Moreover, the next-generation Lightning Network based on CKB, Fiber Network, is about to launch, which can provide fast, low-cost, and decentralized multi-currency payment and peer-to-peer trading solutions for RGB++ assets, greatly expanding the application scenarios for RGB++ assets.
CKB has also launched the over-collateralized stablecoin protocol Stable++, which uses BTC and CKB as collateral while minting the stablecoin RUSD. By utilizing the Leap function of RGB++, Stable++ achieves seamless asset transfer within the Bitcoin ecosystem. This month, IPN (Interstellar Payment Network) announced that it will adopt the RGB++ protocol to build a native payment network on the Bitcoin mainnet and launch a programmable stablecoin USDI.
In contrast, while RGB and Taproot have first-mover advantages, their development speed is slow, and currently, the official team has not provided any SDK or developer tools, nor is there corresponding ecological support or major projects settling in.
Full ecosystem connectivity enhances traffic entry, whether through memes or other guiding functions
The stablecoins RUSD and USDI combined with the Lightning Network Fiber Network not only enrich the application scenarios of the RGB++ protocol but also serve as the best traffic entry point in the ecosystem. Based on CKB, the RGB++ Layer relies on its Turing-complete smart contract environment and native AA and other related facilities to provide an advantageous circulation environment for stablecoins in the BTCFi ecosystem. Many large holders tend to hold Bitcoin long-term rather than trading frequently, so issuing stablecoins backed by Bitcoin can stimulate interaction between large holders and BTCFi, improve capital utilization, and reduce dependence on centralized stablecoins.
At the same time, due to its compatibility with UTXO and Turing completeness, RGB++ can issue memes on the Bitcoin mainnet or do projects on other UTXO chains, including the largest meme chain, DOGE. In this round of meme-driven bull market cycle, this is like a hidden trump card that could ignite investors' attention at any moment.
Both topical and powerful, RGB++ has imminent appreciation potential
In 2024, Bitcoin will complete its fourth halving, leading to a reduction in block rewards and a decrease in miners' profitability. For Bitcoin investors, they do not merely want to 'hold' but are troubled by the lack of more ecological participation choices. The demand for driving the flow of Bitcoin's value becomes prominent. Beyond its store of value function, holders of Bitcoin are naturally turning their attention to greater participation in the Bitcoin ecosystem.
For market speculators, the soaring price of Bitcoin also means increased investment costs. As 'close to the water tower,' Bitcoin Layer 2 is also more likely to become the next target for fund inflows under the market sentiment. The positive feedback loop formed by the wealth effect will encourage users to continue to generate transactions within the Bitcoin native network, leading to network congestion. The demand for transactions will overflow to related derivative projects and scaling platforms, thus making Bitcoin Layer 2 a hot narrative candidate in this bull market.
Data source: https://explorer.nervos.org/charts
From the transaction data, the CKB network remains active. As of now, the average daily transaction volume of CKB is 26,870 transactions. Compared to an average of 20,800 transactions per day in the fourth quarter of 2023, this represents an increase of nearly 30%. Since the RGB++ protocol went live on April 3, 2024, there have been over 89,318 transactions and 52,759 unique addresses using this protocol.
In March of this year, CKB transitioned from a UTXO-based Layer 1 to a booming Bitcoin Layer 2, with an increase of over 300%. Half a year later, as Bitcoin approaches $100,000, how much will the RGB++ protocol fill the unmet expectations of the inscription craze? What will the increase be?
