Starting from 2024, the Bitcoin ecosystem has dominated this round of new narratives. New infrastructure aimed at Bitcoin expansion, new assets with anti-VC as the slogan, and new applications with the mission of replicating the glory of Ethereum constitute the main framework of the new narrative. In the infrastructure sector, Bitcoin Layer2 has been mentioned repeatedly and is also a battleground for strategists. If only solutions based on expanding the "chain" are considered, then the account model compatible with the EVM virtual machine and the Bitcoin-like UTXO model have become the two fastest-growing areas.
Figure 1. A simplified diagram of Bitcoin expansion construction ideas
The EVM of the account model cannot solve the security problem of Bitcoin's native assets for the time being. It needs to rely on (centralized) cross-chain bridges or asset custodians to complete asset bridging. The solution based on the UTXO model can use bridgeless cross-chain methods such as isomorphic binding to achieve this function. Recently, the RGB++ protocol based on the UTXO model has undergone a technical upgrade and officially launched the RGB++ Layer, which marks the unification of all protocols and assets that support the UTXO model, including new protocol types such as Runes and BRC20. This article will use graphic illustrations to take you to understand this new technology in an easy-to-understand way and explore the wealth code brought by this technology.
What is RGB++ Layer?
RGB++ Layer is an upgrade from RGB++. Before the upgrade, the RGB++ protocol was a Bitcoin layer coin issuance protocol, which features support for bridgeless cross-chain and uses CKB as its decentralized indexer. This upgrade extends the scope of technical application to all networks that support UTXO, such as BSV, BCH, DogeCoin, and other new Bitcoin layer asset protocols such as Runes, BRC20, etc. Let's take a closer look at which upgraded technical modules can be used by so many public chains and unify very scattered assets under one standard.
Figure 2 RGB++ composition diagram
Like Omni Layer, RGB++ Layer leverages the security of the UTXO model and the powerful infrastructure of the Bitcoin blockchain to ensure the security and reliability of all transactions and asset management. RGB++ Layer provides a universal asset issuance and management mechanism that allows users to create and manage various digital assets on RGB++ Layer.
RGB++ Layer has Turing-complete smart contract capabilities, enabling developers to create and execute complex contract logic. Smart contracts expand the application scope of the UTXO model and provide support for various decentralized applications.
Omni Layer is mainly based on the Bitcoin blockchain, while the bridgeless cross-chain feature of RGB++ Layer enables it to go a step further in interoperability and flexibility, enabling it to interact with more blockchain networks, allowing assets on chains such as BTC, CKB, BSV, BCH, etc. to operate seamlessly on RGB++ Layer.
Overall, RGB++ Layer is an independent and universal UTXO smart contract layer that can provide bridgeless cross-chain and decentralized financial infrastructure for the entire UTXO model ecosystem. To achieve this goal, the RGB++ browser and DeFi infrastructure based on RGB++ Layer will also be launched soon. In addition, there are other DeFi suites, including stablecoin Stable++, staking protocol LST CKB, and more.
Figure 3 RGB++ Layer Defi component diagram
The features of RGB++ Layer are not just for DeFi. Although the entire ecosystem has begun to promote BitcoinFi, RGB++ Layer has broader value and significance.
First of all, RGB++ Layer can greatly improve the liquidity and income of BTC assets. Bitcoin expansion has been going on for many years, and many solutions have been born. Each solution is also working hard to build its own ecosystem. In the long run, the dispersion of various assets is particularly strong. Even with the same UTXO model, there is a serious fragmentation. The bridgeless cross-chain function of RGB++ Layer allows BTC to interoperate with other UTXO chains (such as CKB, BSV, BCH, etc.), breaking the island effect between chains. This will promote collaboration and resource sharing between different blockchains, and enhance the connectivity and liquidity of the entire UTXO ecosystem. With the help of smart contracts, BTC assets can be used in more application scenarios, such as pledge lending, liquidity mining, cross-chain transactions, etc. This not only improves the liquidity of BTC assets, but also provides holders with more income opportunities, further enhancing the financial attributes of BTC.
Secondly, from the user's perspective, RGB++ Layer provides a seamless user experience. Users can use existing BTC wallets to seamlessly access and use all protocols and applications that support RGB++ Layer, without having to download a bunch of wallets and then learn how to use them. This improvement in user experience can greatly reduce the threshold for user participation and promote the adoption rate of the entire Bitcoin ecosystem.
Third, don't forget that the RGB++ Layer itself is a Lego-like combinable. Developers can flexibly combine various Defi protocols and classify assets that support the UTXO model into a unified liquidity management system. At the same time, RGB++ also has universal asset issuance and management capabilities. Various assets such as Coin (FT) and DOBs (NFTs) can be managed in a unified manner, providing a flexible asset issuance and trading mechanism. This universal asset management capability makes it easier to build and manage complex assets on the UTXO model, which can greatly expand the application scenarios of the UTXO model.
What can RGB++ Layer do?
After understanding what RGB++ is and its significance to the entire Bitcoin ecosystem, our question is: What can RGB++ Layer do? In particular, what opportunities are there for developers and ordinary ecosystem participants? Let’s first present Figure 4 and then expand on it in detail.
Figure 4 What can RGB++ Layer do?
Asset issuance
The characteristics of blockchain projects are asset-first and community-first. It is crucial for a protocol to have a fully functional and well-managed asset issuance function. The first function of RGB++ Layer is unified asset issuance and management. It can easily issue various assets on the blockchain with the help of smart contracts. RGB++ has previously tested asset issuance, but its functions are limited to asset issuance, and the liquidity and empowerment of assets are not supported by infrastructure. After the protocol upgrade, developers can more easily issue UTXO common asset types, and give assets richer operations through Defi Lego components, such as cross-chain, trading, staking, lending, providing liquidity, community governance, etc.
In the RGB++ Layer, the issued assets are uniformly abstracted and have Turing-complete programmability. With the help of bridgeless cross-chain and smart contracts, the asset circulation of each UTXO chain has actually been opened up. This gives asset issuers a new inspiration. The inspiration of issuing assets in the RGB++ Layer is oriented to the entire UTXO ecosystem, and assets can be planned from a larger perspective, user base, and ecological environment.
DeFi Portfolio
RGB++ Layer has added blockchain browsers and Defi kits in the update, and composability has become an essential foundation for the large-scale adoption of Bitcoin Defi. In the first disclosed UTXOSwap protocol, the intent-based liquidity market-making solution has greatly improved compared to the order book and automated market maker (AMM). Through UTXOSwap, users and third-party market makers can provide liquidity for assets and participate in liquidity mining.
Stable++ provides the necessary stablecoin support for Defi. This project has just received investment from CKB Ecological Fund. The team plans to develop the first over-collateralized stablecoin protocol on RGB++ Layer to serve the Bitcoin ecosystem. In this plan, users can use Bitcoin assets such as BTC, CKB or other new assets issued by RGB++ Layer as collateral to mint stablecoin USDPP. ccBTC is a Bitcoin derivative jointly launched by CKB Ecological Fund, Meson Finance and CrossChain Token, issued on the CKB mainnet and 1:1 anchored.
The improvement of these infrastructures can make RGB++ Layer more like a Lego modular DeFi component platform. Based on the "UTXO Lego" design, developers can flexibly combine various DeFi protocols to stimulate innovation, such as UTXO Lending platform, cross-chain NFT market, privacy trading platform, etc., to provide diversified financial services for ecological users.
asset Management
With RGB++ Layer, we can uniformly manage all UTXO protocol assets and even Bitcoin layer 1 new protocol assets such as Runes, BRC20, etc. The assets here include not only Coin (FT) but also various DOBs (NFTs). With the support of a unified protocol and liquidity incentives, multiple forms and multiple assets will be connected. Some can be exchanged through bridgeless cross-chain transactions or swaps, and some can be exchanged directly through Dex.
Another meaning of management is to improve efficiency, especially asset efficiency. Users can use the payment tools on the RGB++ Layer to make fast and low-cost payments and settlements between different blockchains. Developers can use the RGB++ Layer to build a cross-chain DEX and lending platform that supports asset trading or lending on chains such as BTC, CKB, BSV, and BCH. Users can use this service to seamlessly exchange assets on different blockchains.
RGB++ Layer has the potential to integrate the huge ecological assets of the UTXO model, and will eventually form an asset management service with smooth user experience, sufficient liquidity, and extremely high asset efficiency in this ecosystem.
What wealth opportunities will be created by the launch of RGB++ Layer?
Leading assets
The best opportunity for an ecosystem to rise must not miss the leading assets, which have extremely high recognition and a broad user base. When funds flow into the ecosystem, large funds will first enter the leading assets. Among these assets, CKB must be the most important.
The core foundation of RGB++ Layer is still built on the CKB ecosystem. With the continuous increase in applications, CKB tokens will not only undergo tremendous changes in the supply side, but also in the circulation direction. Specifically, with the continuous increase in ecological projects, especially the booming development in the form of assets such as DOBs, the occupancy rate of CKB Cells will increase sharply, which will directly affect the output and occupancy ratio of CKB tokens. On the other hand, innovative DeFi combinations require a large amount of CKB to be locked, pledged or provide liquidity, which will further reduce the number of CKB tokens that can be circulated. At present, CKB tokens are the only tokens listed on major exchanges, and their liquidity and popularity are sufficient. If a new wave of enthusiasm is caused by RGB++ Layer, CKB must be listed as the first wealth opportunity.
In addition to CKB, Seal, the first asset based on the RGB++ protocol, should be paid attention to. The community has given Seal a lot of empowerment. UTXOSwap opened the Seal/CKB trading pair at the first time. Through liquidity incentives, Seal's trading depth is getting better. IBO (Initial Bitcoin Offering), the first Launchpad platform of the BTC ecosystem developed and operated by the Seal community, will be launched during the BTC 2024 conference this week. The first Seal to Earn project is the UTXO-based over-collateralized stablecoin protocol Stable++. The total amount of Stable++ protocol tokens is 21M, and 20% of the shares will be airdropped to Seal's pledgers on the IBO platform first.
In terms of DOBs, as the most well-known DOBs asset of RGB++, Nervape is still undervalued in the market. After more than three years of development, Nervape has gained wide recognition in the ecosystem, and the team is excellent in IP development, visual design, and technical research and development. However, due to the lack of financial infrastructure, Nervape cannot enter a wider ecological perspective, nor can it generate more financial gameplay links. However, with the help of RGB++ Layer, it is very likely to usher in a new round of gameplay upgrades and wealth opportunities.
Another DOBs Unicorn has completed the first round of "opening the map". After the opening of the map, the unicorn obtained DNA. The community can carry out various forms of creation around the DNA, such as games, PFP, novels and even DeFi innovation. Reëm is a PFP project created by the community based on the DNA of the unicorn. It has become the CKB ecosystem with the most DOBs minted, and the number of holders is also among the top three, but the current market value is extremely low. If it can use the RGB++ Layer to provide more financial gameplay, Reëm is very likely to reproduce the crazy growth of the unicorn.
Figure 5 RGB++ Layer New wealth code?
Innovation assets
The best wealth opportunity may always be the next one. New assets may be launched through an asset launch platform. With the help of the RGB++ Layer unified asset protocol, excellent projects from many other chains such as BCH, BSV, DogeCoin, etc. can be attracted to launch here.
To launch new assets on the RGB++ Layer, only one contract is needed to launch and deploy issued assets on multiple chains. It can also share liquidity pools across chains and support the bridgeless circulation of multiple assets, making asset issuance simpler and management more efficient.
The DeFi infrastructure projects launched in the first batch of RGB++ Layer are all innovative assets and are worthy of attention. DEX platform UTXOSwap, stablecoin project Stable++, ccBTC, LST and other projects all have coin issuance expectations, and you can participate deeply in the projects at a very early stage. Behind the innovative assets are new applications. If you pursue relatively stable returns, you can consider tilting BTC, CKB and stablecoins to this ecosystem.
Ecological Positioning
The best wealth opportunity is still entrepreneurship. Developers can start new businesses in the vast world of RGB++ Layer. CKB Ecological Fund generally gives about 50,000 Grants incentives to ecological projects, and there is no upper limit on incentives for important and excellent projects, helping early projects grow. With a unified liquidity market, there will be more professional market makers, custodians and other service roles, and development tools are becoming more and more complete. It is undoubtedly the best choice to start a business with the help of RGB++ Layer.
According to observations, RGB++ Layer will focus on asset issuance and liquidity incentives, so developers can focus on it. Asset launch platform (LaunchPad), decentralized exchange (DEX), cross-chain DOBs trading market, mortgage lending, stablecoins, liquidity mining such as pledge, re-pledge, etc. will definitely be the first batch of key support.
In addition, developer tools and developer services will also be areas with very high demand in the short term. Technical documentation, training, hackathons, bounties, and development tools and data dashboards provided to developers will also be popular.
●The projects discussed in this article are for research purposes only and do not constitute any investment advice.
