🧐 Research Report丨Creating a 1.5 Layer for BTC, breaking through the Bitcoin ecosystem with a new perspective—exSat Network (with APR 150% staking tutorial)
The development of the Bitcoin ecosystem is an inevitable result of historical development;
Defillama data shows that in just one month, it has attracted over $700 million in staking TVL;
Currently, this track is highly competitive; however, I recently noticed an interesting project where the long-quiet EOS Foundation invested $20 million to incubate a Bitcoin Layer 2 project, exSat Network @exSatNetwork.
Moreover, the exSat Network mainnet was launched on October 23, with cross-chain bridge and staking features available on November 5, currently with staking annual returns reaching 150%;
In a bull market, being able to slice a piece of the constantly flowing funds and developing at such an astonishing speed indicates choosing the right track or having attractive project features.
Regardless of the direction, it is worth our in-depth study—
1️⃣ What is the exSat Network project?
What problems does Bitcoin Layer 2 aim to solve?
Blockchain networks are divided into two key layers: the execution layer responsible for processing transactions and the consensus layer responsible for validating and approving those transactions. Bitcoin's L2 solution creates an independent execution layer that processes transactions off-chain before submitting them to Bitcoin's consensus layer for final settlement.
The biggest issue mentioned above regarding Bitcoin is that it is not Turing complete, and the lack of support for smart contracts limits the development of more complex ecological business.
After protocols and standards like Ordinals, BRC-20, and Atomicals have emerged, asset issuance on the Bitcoin chain is no longer a challenge. The current pain point has become how to allow these assets to have more application scenarios or more gameplay.
exSat Network is positioned as a docking layer between the Bitcoin mainnet and the Bitcoin ecosystem, so strictly speaking, it is not an ordinary L2 project, but a 1.5 layer, which is key to solving the above problems;
Enhancing interoperability, scalability, security, and smart contract functionality within the Bitcoin ecosystem through EVM compatibility, hybrid consensus, and on-chain data indexing.
Overall, exSat expands its ecosystem through two modes: 'downward' and 'upward'—
‘Downward’: mapping the core elements of Bitcoin onto the exSat network and establishing asset custody, allowing developers to create new decentralized applications while retaining Bitcoin consensus based on the extensibility of exSat.
‘Upward’: providing trustworthy data and assets from Bitcoin to DApp developers and various Bitcoin L2 solutions, enhancing performance and offering more possibilities for Bitcoin application scenarios.
exSat's partners are also industry leaders, such as Matrixport, Spiderpool, Antpool, HashKey, OKX, Bitget, etc., and the strict verification access threshold has enhanced market trust in exSat.
2️⃣ What advantages does exSat Network have?
exSat is not just a simple off-chain expansion; compared to other Layer 2 solutions, it has the following advantages—
① Innovation in consensus mechanisms
exSat adopts a PoW+PoS hybrid consensus mechanism, retaining the security of Bitcoin's PoW while enhancing network processing capability through PoS, making the network more flexible and robust.
Under the dual consensus mechanism, the incentives for miners and validators have become more diversified, ensuring network security while providing stable returns, which enhances the enthusiasm of all parties to participate.
② Efficient data management
Through decentralized storage indexers and data availability layers, exSat can provide efficient data management, transparency, and verifiability for the Bitcoin ecosystem, supporting the development of BTCFi applications.
③ Multi-asset support
The index system of exSat can handle various asset types, such as BTC, Ordinals, Runes, BRC20, BRC-721, ARC20, etc., providing extensive support for different assets and DApps, enhancing the platform's appeal to users and developers.
④ Smart contract expansion
exSat supports EVM, accommodating complex application scenarios, allowing developers to build and run smart contracts on the Bitcoin network, tightly integrating and directly expanding Bitcoin's native capabilities, which is an advantage not possessed by projects like the Lightning Network and Rootstock.
⑤ Multi-chain compatibility
The Docking Layer technology of exSatexSat achieves seamless connectivity between the Bitcoin main chain and various Layer 2 networks, supporting more expansion layers while offering higher transaction speeds (1-second transactions) and support for privacy protocols, which many other L2 projects lack.
From the various innovative advantages mentioned above, it is evident that exSat's ambition is not merely to be an ordinary L2, but to be a comprehensive solution, becoming a 'whole-chain DAPP centered on enabling intent.'
3️⃣ A token model that combines the strengths of BTC and EOS
EOS tokens are relatively weak, but the node gameplay of EOS is still quite interesting; exSat's governance token is $XSAT, and its token model combines some characteristics of Bitcoin and the scalability of the EOS network, adopting a fair launch without pre-mining.
Total supply: 21,000,000 pieces, with mining rates pre-set and public, similar to Bitcoin's supply dynamics.
Halving cycle: adopting a halving model similar to Bitcoin, each halving cycle contains 210,000 blocks. In the initial phase, the reward for each block is 50 XSAT. After the synchronization of the first 840,000 Bitcoin blocks is completed, the halving cycle of exSat officially begins.
In addition, exSat has pioneered a new node management model, receiving tokens donated by nodes through donations, with the ratio decided by the nodes themselves.
4️⃣ A delicious APR of 150%, how to stake?
For retail investors, this is still an early opportunity to participate in staking mining and hope for an XSAT airdrop.
Staking link: https://btcyield.io/
Currently, the staking scale has reached 4,349 BTC, with many miners participating. The future circulation of the token $XSAT mainly comes from staking mining, which is purer compared to VC projects in the same track, thus attracting more community support.
The current off-exchange price of XSAT is 110u, and according to @_FORAB's calculations, the staking return rate is around 150%.
Under the premise of ensuring security, this staking annual return is truly enticing; however, staking always carries some risks, so it is necessary to conduct personal research before making a decision.
5️⃣ Conclusion—
Many people say that BTC L2 is a pseudo-concept because Bitcoin exists as a value storage, often compared to digital gold. The security of Bitcoin L2 obviously differs from Bitcoin itself at present.
Due to the Turing incompleteness of BTC, no BTC L2 can inherit the security of BTC completely like ETH L2, regardless of the solution.
Therefore, BTC L2 will inevitably make trade-offs, achieving not 100% inheritance of BTC security, but perhaps 80% or 70%. I believe the market can accept this.
Because BTC holders have a strong market demand, whoever can meet their needs while achieving a balance on security issues will first develop the BTC L2 ecosystem, continuously improve the security proportion, and later integrate better technical solutions.
The BTC L2 track is a typical market demand-driven technical solution. As funding density increases, the subsequent security proportion will also continue to improve.
exSat enhances interoperability, scalability, security, and smart contract functionality within the Bitcoin ecosystem through EVM compatibility, hybrid consensus, and on-chain data indexing, representing a new attempt and innovation;
So far, there has not been a widely recognized Bitcoin scalability solution. Projects like Babylon and exSat are tirelessly working towards this goal, aiming to find a place for Bitcoin in the multi-chain world.
Therefore, I will continue to pay attention to @exSatNetwork,
Especially in light of BTC having such a strong fundamental situation this round, I believe the Bitcoin ecosystem sector will definitely burst forth with new energy, bringing greater wealth effects!
