In today's rapidly developing cryptocurrency field, Bitcoin Layer 2 solutions are becoming the new favorites of the market. In particular, the latest innovation of CKB (Nervos Network) - RGB++ protocol has attracted widespread attention. RGB++ not only promoted the surge in CKB's value through an innovative asset issuance mechanism at the beginning of this year, but also achieved an amazing monthly increase of more than 300% in just a few months.
The price fluctuation of Bitcoin has provided a stage for multiple Layer 2 projects to showcase their technologies, and CKB has performed particularly well. In the popular track of Bitcoin Layer 2, CKB has successfully bound the UTXO of the original Bitcoin chain with the Cell on the CKB chain with its unique isomorphic binding mechanism and strong background (supported by the famous public chain Nervos), thus leading a new market trend.
In addition, the RGB++ protocol was further elaborated in a Twitter Space hosted by Trustless Labs on February 22 this year. In the event, Cipher, the main author of RGB++ and co-founder of CKB, and Baiyu, the head of ecology, shared their insights into Bitcoin Layer 2 and the future plans for RGB++ assets and CKB ecosystem construction.
This article will take a closer look at how the RGB++ protocol works, its place in the market, and how it may change the way we understand and utilize Layer 2 solutions.
The team's original intention to develop the RGB++ protocol stems from an in-depth analysis of the market competition for Bitcoin's second-layer solutions. They paid special attention to the competition for new protocols on Bitcoin's first layer, which distinguished two types of protocols: one is assets that use UTXO characteristics, and the other does not involve UTXO. The team chose the first type, especially protocols with UTXO characteristics such as Atomicals, RGB, and Taproot Assets.
There are many reasons for choosing the RGB protocol as the basis for development. First, team member Cipher has a great interest in the RGB protocol and has conducted in-depth research with Professor Ajian. The RGB protocol is known for its elegant design and the powerful expansion capabilities it provides for Bitcoin, but despite such advantages, the protocol has not been widely adopted due to multiple technical and product issues in practical applications (such as interactive operation issues, data availability issues, interoperability issues, smart contract/script execution environment issues, etc.).
RGB++ is an asset issuance protocol belonging to the first layer of Bitcoin, and is at the same level as other first-layer asset issuance protocols such as Ordinals, Runes, and BRC20. Its design and technical advantages reflect the long-term accumulation of the CKB team in Bitcoin second-layer solutions. Compared with the traditional RGB protocol, RGB++ avoids the need to exchange transaction history and data through the P2P network, and moves all intelligent components such as virtual machines and smart contracts directly to the chain, thereby greatly simplifying the off-chain logic and accelerating the development process.
The core of the RGB++ protocol is to transfer the complex logic that needs to be processed on the client side in the traditional RGB protocol to the on-chain processing. This transformation is due to the years of accumulation of the CKB technology platform, including independent P2P networks, shared data, virtual machines that can verify transactions, and non-interactive operation experience. Through this isomorphic binding mechanism, RGB++ maps Bitcoin's UTXO to CKB's Cell, and uses the script constraints on the CKB chain and the Bitcoin chain to verify the correctness of state calculations and the validity of ownership changes.
The main advantages of RGB++ include: non-interactivity of transactions - RGB++ utilizes the data hosting and computing platform characteristics of CKB to allow both parties to transfer funds in an asynchronous and non-interactive manner, greatly improving the user experience; transaction folding - by matching multiple CKB transactions with one Bitcoin RGB++ transaction, the performance of the low-speed, low-throughput Bitcoin chain is improved; and direct interoperability between BTC assets and assets on the CKB chain - through the mapping association of UTXO and Cell, direct interaction between Bitcoin assets and assets on the CKB chain is achieved without the need for complex cross-chain mechanisms.
The RGB protocol is a unique P2P asset protocol that operates primarily off-chain on the Bitcoin chain, and its computing system is similar in some ways to payment channels. It requires users to run the client and personally verify the transfer behavior related to themselves, which is called "interactive transfer". Even as the recipient of the asset, the user must confirm that the sender's transfer statement is correct before the statement can take effect. The advantage of this method is that it enhances privacy protection, because unlike the broad node consensus protocol adopted by traditional blockchains such as Bitcoin and Ethereum, the RGB protocol protects the privacy of each transaction through "client verification".
However, this design of the RGB protocol also poses significant challenges. The lack of a common consensus process means that different clients may hold inconsistent data, creating "data silos." In addition, users must verify the historical source of each transaction to confirm the legality of the transaction and the authenticity of the assets, which increases the operational complexity for users and may limit the widespread adoption of the protocol.
In contrast, the RGB++ protocol significantly improves user experience and system efficiency while maintaining the privacy advantages of the original RGB protocol. RGB++ combines Bitcoin's UTXO with CKB's Cell through the "isomorphic binding" mechanism to achieve on-chain management of assets and transaction information. This mechanism allows all relevant verification logic to be executed directly on the CKB chain, rather than just on the user's local client. This not only simplifies the process for users to verify assets and transactions, but also solves the problem of data inconsistency through centralized on-chain verification.
Another major advantage of RGB++ is the non-interactive nature of transactions. In the RGB protocol, if Alice wants to transfer money to Bob, she must send the transaction information to Bob, who will check and verify it in person. In RGB++, this process is automatically completed by the CKB chain, and users do not need to intervene manually, which greatly simplifies the transaction process and improves efficiency. In addition, RGB++ uses the computing power of the CKB chain to allow the execution of more complex smart contracts and extended functions, which not only enhances the functionality of the protocol, but also provides developers with more room for innovation.
In summary, RGB++, while maintaining the privacy advantages of the RGB protocol, greatly improves the convenience of transactions and data consistency through centralized processing and verification on the chain, solving the main pain points in the traditional RGB protocol. These improvements not only enhance the user experience, but also lay a solid foundation for the widespread adoption and future development of RGB++.
Currently, the second layer solution (L2) of Bitcoin is growing rapidly, and various projects such as BounceBit, Merlin Chain, and B^2 have accumulated considerable total locked value (TVL). In the face of this explosive growth, how does RGB++ enter this market? The key lies in its unique market positioning and strategic deployment. RGB++ not only exists as an NFT and FT issuance protocol, but also fully utilizes the technical advantages of the CKB chain to provide a seamless trading experience. Although operations on the Bitcoin mainnet may face higher gas fees and slower transaction speeds, the RGB++ protocol optimizes these operations by directly utilizing CKB's Dex for asset transactions.
On the CKB second-layer chain, RGB++ focuses on the issuance of native assets and the support of cross-chain assets. Bitcoin and Ethereum assets can be safely transferred to CKB through advanced bridging technology, and we work with many large institutions to ensure the security and reliability of transactions. In addition, the assets we launch on CKB follow unified standards, such as the FT standard XUDT and the NFT standard, which have been applied on the mainnet. We also plan to launch specific trading platforms, such as the Omega Market, to support the issuance and trading of CKB native inscription assets.
Although RGB++ has obvious advantages in technology and market strategy, its development process is not without challenges. The development of the original RGB was affected by many factors, such as the need to be built on the Lightning Network, but the existing Lightning Network standard does not fully support the RGB protocol. In addition, the improvement of RGB's development tools and virtual machines (AluVM) also takes time, which may lead to slow development progress and missed market cycles.
In summary, RGB++ not only carries the promise of technological innovation, but also faces multiple challenges in practical applications. As we continue to push the technological frontier and strive to overcome these challenges, will RGB++ be able to gain a foothold in this highly competitive market?
