Written by Karen, Foresight News
Bitcoin has strong security, but limitations in liquidity have always been a shackles to its development. Especially when Bitcoin is experiencing production cuts, miners' profits will be significantly reduced, which undoubtedly brings considerable challenges to the entire Bitcoin ecosystem. Against this backdrop, Bitcoin L2 is expected to boost miners’ profits. So what happens when you combine Bitcoin security with EVM liquidity? Hybrid L2 BOB provides its own solution, and through merged mining, Bitcoin miners only perform verification without additional PoW and no need to bear additional electricity costs, which may inject new vitality into the Bitcoin ecosystem.
What is BOB?
BOB is the abbreviation of "Build on Bitcoin". It is an L2 technology stack designed to support Bitcoin DeFi innovation and ecological development. It not only inherits the security of Bitcoin PoW, supports Bitcoin ecosystems such as Ordinals, Lightning and Nostr, but is also fully compatible with EVM. Currently, BOB has been launched on the Ethereum test network Sepolia, and plans to launch the main network before or after the Bitcoin production cut.
In terms of access, BOB supports users to use MetaMask to interact with Bitcoin on the BOB network through MetaMask Snap "BOB Bitcoin Snap". This means that operations such as transferring Bitcoin, signing Bitcoin transactions, inscription and transfer of Ordinals can be performed on MetaMask later. According to BOB documents, BOB MetaMask Snap is currently undergoing formal launch review by MetaMask. BOB also allows users to pay gas fees with cross-chain BTC and other ERC-20 tokens through meta transactions and account abstraction.
BOB co-founder Alexei Zamyatin is a Bitcoin enthusiast, researcher and software developer, and co-founder of the Bitcoin DeFi project Interlay. As for the other co-founder @domiki0_ mentioned by BOB officials, the author has not yet found relevant information.
Yesterday, BOB announced the completion of a $10 million seed round of financing. The investment lineup includes overseas venture capital firms focusing on Bitcoin and Bitcoin OG. The lead investor is Castle Island Ventures. Other investors include Mechanism Ventures, CMS Ventures, Bankless Ventures, Alliance, Antalpha Ventures, Asymmetric, Bitcoin Frontier Fund, UTXO Management, Web3.com Ventures, Zee Prime Capital, ViaBTC Capital, Lucky Friday, Modular Capital, Daedalus, IOSG Ventures, Hypersphere, DFG, Nexo, etc. Angel investors include Dan Held and Domo, the creator of the BRC-20 token standard.
How does BOB work?
Initially, BOB was launched on the OP stack and can inherit the security of Bitcoin through a merged mining protocol (Bitcoin restaking), with the ultimate goal of settling directly on Bitcoin L1, possibly followed by full state verification through ZK Rollups.
In terms of technical implementation, the BOB merged mining protocol OptiMine follows a hybrid consensus model, enabling any sidechain or Rollup connected to the L1 chain to obtain PoW security from Bitcoin miners. OptiMine separates block production from proof of work (PoW), which not only inherits the security of Bitcoin miners, but also eliminates dependence on centralized sorters and retains fast block times (maintaining a 2-second block time).
Specifically, in the BOB merged mining protocol, the sorter is responsible for creating and signing blocks, and Bitcoin miners participating in the merged mining of BOB L2 only verify them. Since blocks are generated by the sorter and miners only verify them, the sorter can stop block production in the worst case, but will not create forks or invalid blocks, thus preventing Bitcoin miner attacks.
In terms of EVM compatibility, BOB uses EVM to create and execute smart contracts, mainly developed using the Solidity smart contract programming language. Most of the Bitcoin stack and applications built around it, such as the core SDK, Lightning, and Ordinals, are implemented in Rust. BOB also supports Bitcoin's Rust library, allowing off-chain execution of Rust programs through RISC Zero zkVM, while using ZK proofs to verify correct execution in EVM smart contracts. BOB said that in the future it will be considered as a way to conduct ZK Rollups directly on Bitcoin, where BOB itself can be proven in zkVM and verified through Bitcoin consensus.
In addition, BOB provides trustless access to Bitcoin blocks and transaction data through BTC light client, allows EVM contracts to process BTC transactions (such as P2P BTC exchange, Ordinal auction, hashrate tokenization, etc.), and supports a series of Bitcoin cross-chain bridges. BOB also plans to launch a two-way light client BTC bridge powered by BitVM.
BOB Stack
BOB launches the first season of points activity
On the day of the official announcement of the financing, BOB also announced the launch of the BOB Fusion Season 1 Points Program to encourage users to actively participate and contribute to the construction of the BOB ecosystem. The first season of the activity allows users to lock assets and invite others in the non-custodial BOB Fusion time lock contract on the Ethereum mainnet to earn BOB Spice points. Points represent contributions to the BOB ecosystem.
In terms of asset lock-up, users can get 1 Spice per day for every $1 worth of assets they deposit. Depositing tBTC and WBTC assets can earn 1.5 times the points. Specifically, the assets that can be deposited include:
1. Bitcoin-pegged assets: tBTC, WBTC (1.5 times points);
2. Stablecoins and Ethereum liquidity pledge tokens: DAI, eDLLR, rETH, STONE, USDC, USDT, wstETH (1.3 times points);
3. ALEX, ETH, eSOV (1x points).
Warm reminder: Do not withdraw funds directly from the exchange to the BOB FUSION smart contract address.
In addition to asset locking, users can also earn more points through the invitation mechanism. After completing the initial deposit, users can generate a personal referral code to invite others to participate in the event. The referrer can get 15% of the Spice of the first-level invitee and 7% of the Spice of the second-level invitee.
The first season of BOB Fusion will end after the mainnet launch in April. At that time, the deposited assets will be unlocked for withdrawal before and after the Bitcoin halving, and can be migrated to the BOB mainnet to continue participating in the second season. The BOB official website shows that there are 25 days left before the end of the first season of the points activity. If the mainnet launch is delayed, the assets will be automatically unlocked on May 15, 2024 at the latest (because the time lock contract is used).
BOB Roadmap
BOB also released a relatively detailed roadmap, showing multiple release stages from public testnet to Multi-ZK-Rollup. BOB L2 will be released in multiple stages, from stage 0 to stage 5, namely public testnet, Bootstrapping BOB: Optimistic ETH Rollup, inheriting Bitcoin security through a new merged mining protocol (PoW re-collateralization), upgrading from Optimistic Rollup to ZK verification, implementing BTC pledge sequencer through BitVM, one-time signatures and ZK proofs, and Multi-ZK-Rollup (connecting ETH and BTC at the same time).
As mentioned earlier, initially, OB will be launched as an Optimistic ETH Rollup using the OP stack, with the BOB sorter processing transactions and blockchains, and then submitting data covering PoW commitments to Ethereum L1, where DA and PoW commitments are verified, and settlement also occurs on Ethereum L1. Stablecoins (USDT, USDC), ETH/stETH, and ERC-20 assets can be accessed due to the native L1/L2 cross-chain bridge. BOB also tracks the state of Bitcoin through the BTC light client, verifies block headers, and accepts transaction inclusion proofs. This makes trustless cross-chain exchange/auction/contract execution possible.
It should be emphasized that compared with the standard OP stack, BOB has made more changes and optimizations. For example, BOB will have its own governance to reach community decisions and implement changes, explore other alternatives besides Ethereum (such as Bitcoin and Celestia) in terms of data availability, and add merged mining in a single centralized sorter setting, and add the function of Bitcoin miners verifying the work of the sorter.
In the second phase, BOB will introduce Bitcoin PoW security to ETH Rollup. After the BOB sorter processes transactions and blocks, Bitcoin miners will verify the state of BOB Rollup and only make commitments as part of PoW if the state transition is correct, which will minimize trust in the sorter. The sorter then submits data covering the PoW commitment, and finally the Ethereum smart contract verifies the DA and PoW commitment.
BOB's goal is to introduce Bitcoin as BOB's settlement layer, which is still under research. It may be necessary to introduce ZK compression to BOB, which is likely to be part of the fraud proof mechanism and may be carried out in cooperation with ZK infrastructure providers such as RISC Zero. BOB said that its vision is to ensure that Bitcoin assets to Rollup are protected by Bitcoin, and ETH assets are protected by Ethereum.
Recently, BOB has also established a strategic partnership with Anduro, a Bitcoin sidechain development platform launched by crypto mining company Marathon Digital. LayerBank, IceCreamSwap, bitSmiley, and iZUMi Finance will also deploy applications on BOB.
In short, as an innovative L2 technology stack, BOB not only inherits the security of Bitcoin, but is also compatible with EVM. With its launch on the mainnet and the improvement of more functions, whether it can promote the Bitcoin L2 craze and become an important force in the Bitcoin DeFi field, and promote the development and prosperity of the entire ecosystem, remains to be seen.