OP_CAT was approved as a Bitcoin Improvement Proposal (BIP), sparking widespread discussion in the Bitcoin community.
Starknet recently announced its entry into the Bitcoin ecosystem, planning to achieve settlement on the Bitcoin network within six months after the OP_CAT merger, upgrade to the Bitcoin extension layer, increase Bitcoin's transaction processing capacity to thousands of transactions, and set up a million-dollar fund to support related research.
As the transaction volume and overall market value of the Bitcoin network grow, the Bitcoin ecosystem is gradually showing a trend of flourishing. The high transaction fees and transaction confirmation delays caused by network congestion have made the Bitcoin second-layer network solution increasingly necessary, and its innovation and potential have attracted attention from all parties. The related research on OP_CAT and ZK on Bitcoin has also inspired everyone to explore more about the Bitcoin second-layer network.
What impact will OP_CAT have on the Bitcoin ecosystem? How to use zero-knowledge proof technology to achieve a secure and efficient Bitcoin second-layer network? How to release the liquidity of long-held Bitcoin? How to use Bitcoin assets to enhance the security of PoS services?
During the Web3 Carnival in Hong Kong, StarkWare founder Eli Ben-Sasson visited multiple projects in Asia and had a private meeting with Chakra co-founder Luke Wang to discuss in depth the impact of OP_CAT and STARK on Bitcoin network expansion and settlement.
Chakra is a ZK-powered trustless Bitcoin settlement network with a re-pledge protocol as its representative application. By leveraging ZK-STARKs and middleware chains, the Chakra network has established a modular native paradigm for the extended Bitcoin ecosystem from day one. This enables other Bitcoin layer-2 solutions to focus on execution while bypassing the complexity and challenges involved in building Bitcoin settlement infrastructure. The Chakra network provides a shared settlement layer for Bitcoin ecosystem participants, unlocking interconnected liquidity and economic security. Bitcoin layer-2 solutions and decentralized applications (DApps) benefit from a robust liquidity network effect from a secure, dynamic, and powerful ecosystem.
The following are some excerpts from the conversation:
Luke:
As the first mature project on Starknet Madara, Chakra has attracted a lot of attention in the market recently, following the rise of the Bitcoin ecosystem. Initially in February, people thought it might only be popular in the Asian market, but after the StarkCity event held by StarkNet at ETH Denver, the Western market also began to pay attention. Now, I think the trend has become more obvious. We have been thinking about some key issues, such as how to develop the Bitcoin ecosystem in the long term.
Or:
What do you think the market or investors expect from you? What makes you feel most promising?
Luke:
What we're observing is probably not just relevant to Bitcoin, but to everything around Bitcoin. Typically, you see a pattern where a period of growth is followed by a period of decline. For most projects, if they can stay afloat, they can continue. But in this particular cycle, a very important factor is OP_CAT, which I know you guys have been working on.
Through the Chakra project, we have also established connections with many miners. I think that after OP_CAT, the ecological value of Bitcoin may not be lower than that of Ethereum. Therefore, in a system with a rich programmable environment, this should be considered a good economic model. However, under the most optimistic expectations, we may need at least 12 to 24 months to achieve this goal.
Or:
That's not a long time, and if you can do it in 24 months, that's still very good. I think that ultimately we will succeed in both areas, technology and market. We're starting to see success in technology, and we're starting to see success in the market. But some of our basic assumptions over the past 5 years (may be different in the next 5 years). Maybe one of them will succeed, but most of them may not make a lot of progress. In this market craze, you have to know exactly what you want to build. If you say we want to do something amazing on Bitcoin, we all know that it will take at least two years, right. Look at Starknet, even though we probably only had 100 engineers when we started, and now we have 170, we're still working on it and it's still in the very early stages.
There are still many imperfections in Bitcoin, such as how to maintain the state? This will definitely take at least two years. But my suggestion is that you can take advantage of the trend, and if you are ready, this is a good time. For example, take action immediately, introduce some high-quality investors, and maintain technical independence.
Luke:
What do you think is exciting about the research and discussion around OP_CAT for Bitcoin? And how can it have a greater impact on Starknet?
Or:
Okay, let's say that OP_CAT does work. I think a huge problem might be state management and adaptability. Starknet is an account-based system, which fits in very well with Ethereum. Now let's say you want to connect this technology to the Bitcoin network, which is based on the UTXO model. There might be a lot of things that are completely missing. You need to adapt and change to make it work, and Bitcoin's second layer network has just that, with proof of validity, making it as secure as the first layer.
Luke:
Yes, we hope that Bitcoin can truly provide security for the state of the second layer and achieve equal security.
Or:
This sounds very difficult, as Bitcoin can handle much less data than Ethereum due to its block size limit.
Luke:
In fact, the current block size is acceptable for DA (data availability), and the DA fee is even cheaper than Ethereum before EIP-4844 was implemented. People have tested it, so the number of Bitcoin second-layer networks is increasing.
Or:
With OP_CAT, now you can really do something very safe. You know, people usually like to chase the cyclical hot spots and meme crazes in the market, drop everything and launch as many memes as possible, and I think the problem with this approach is that if you want to do something very important, you need to work hard in this direction to be able to seize these opportunities. So you need to make a strategic decision. The market craze is there, do you choose to cater to the market craze, or do you focus on technology and make technology the direction of your efforts?
Luke:
Ideally, we want a combination of the two. This is why we are considering launching the STARK version of the Bitcoin second layer network as soon as possible. We all know this cycle, and the Bitcoin ecosystem explosion will come soon. Looking at the development in Asia, now may be a good time for Asia. This is why we are satisfied with the rapid launch of Chakra Phase 1 Devnet.
Or:
So will Chakra have a second layer network? I understand that you will use Babylon and then generate your own re-staking protocol.
Luke:
Babylon is a highly respected pioneer in the Bitcoin staking industry, and we have reached in-depth cooperation in the market and technology development. Chakra will work with Babylon to unlock Bitcoin liquidity and reshape the crypto ecosystem. Our re-staking part is not just staking in the ordinary sense, but also to achieve safer cross-chain interoperability, because there is no fully trustless cross-chain bridge. Chakra will use the economic security provided by Babylon and serve various Bitcoin second-layer networks as a shared settlement layer.
Or:
Okay, on top of that do you implement a re-staking protocol based on Madara that connects to all the other second-layer networks, and then increase security through STARK verification?
Luke:
Yes, the discussion about state just now reminded me of Prover. Currently, SHARP on Cairo is the most mature proof system, but Bitcoin cannot verify STARK proofs until OP_CAT is passed.
Or:
Yes. Without OP_CAT support, it is not very efficient. So what are you going to do in the near future, because OP_CAT is obviously not going to be launched in the near future.
Luke:
So we are working on two things, one is to improve efficiency, and the other is to enhance security. First, we think that verification can be done on the Chakra Network itself, so Chakra is not just a second-layer chain, but a decentralized Bitcoin shared settlement layer that serves various Bitcoin second-layer networks and Madara application chains. Therefore, verification can be done on the Chakra chain, but unfortunately, it cannot be verified on Bitcoin for the time being. In addition, we are also considering how to develop the project into a more long-term direction, not just a short-term plan. This is not to say that short-term plans are bad, but we believe that in the Starknet ecosystem, people generally want to work towards a more lasting goal.
Or:
Yes, you are absolutely right. In this case, it is crucial to find a way to balance security and the need for rapid implementation. Sometimes, trying to get ahead of others is
Some security may be sacrificed, but this is a trade-off. If your team tends to be long-term and security-focused, it is key to maintain this balance during development. The idea of a POC or test network is indeed a good strategy. This can demonstrate the maturity and reliability of the technology, not just the concept. C-end users may pay more attention to the usability and stability of the product, so a tested product may be more attractive. What your team needs to pay attention to when exploring these possibilities is how to find the best balance between rapid launch and security to meet the needs and expectations of different user groups. Such an approach helps build an ecosystem with long-term development prospects.
As the Bitcoin ecosystem prospers, the Bitcoin Layer 2 network will become one of the most important infrastructures in the crypto space. Chakra will continue to adhere to the principle of technology first, attach importance to ecology and market, provide more secure, efficient and convenient services to every crypto user, provide a decentralized shared settlement network for the Layer 2 network, expand the Bitcoin ecosystem, and jointly release the untapped potential of 21 million Bitcoins with the Starknet ecosystem.
