Jun 24th, 2024 | Laobai ABCDE
A while ago, a public account I like very much, Orange Book, published an article titled "Crypto Impotence"
“A terrible boredom is spreading in the Crypto world, like the Black Death. No one knows where it started, but before you know it, you find that this disease is everywhere.”
Come to think of it, there is really nothing worth writing about in the recent circle of technology. The only hot topics are concentrated on memes such as Pepe, Trump, and Jenner. The last technology-oriented hot topic was probably the duality of image and currency "Pandora"?
The primary market is also affected. Fortunately, innovation is always happening. Although we still don’t see anything truly 0 to 1, things from 1 to 10 are still happening in all tracks.
The previous research report mainly focused on new ideas at various levels under the Modular narrative on ETH. In this issue, let’s take a look at the “1 to 10” on the three tracks of BTC, Solana, and Restaking.
BTC
Rune, which many people expected, did not bring the expected popularity. If BRC20 or Ordi was a "hectic" surprise, Runes was a collective "everything is ready, only the east (upward) wind (line)" welcoming ceremony from Cex to Dex to Infra. However, the old saying "the hottest will die" is true, at least in the short term. In the long run, Runes, Atomical, RGB&RGB++ and other protocols are still expected to inject new vitality into BTC's asset issuance. The upgrade of BRC20 two months ago is also clearly working towards a more flexible route. Apart from anything else, the native stablecoin based on BRC20 is now much easier to implement.
The most noteworthy projects in the BTC ecosystem in the past two months, apart from the UTXO Stack that I wrote about before, should be Fractal — @fractal_bitcoin, Arch Network — @ArchNtwrk, and Quarry — @QuarryBTC launched by Unisat.
Fractal — has a very “peculiar” design concept. In essence, you can think of it as a 100% Fork of BTC, but the block time is reduced to 30 seconds.
You may be thinking - what the hell is this? Isn't this just a BTC testnet? Litecoin, BCH, BSV, etc. at least have their own things, but you are just a 99% mirror chain, what's the point? How can you guarantee security?
Actually, it means a lot
Fractal uses the same POW and SHA256 as BTC, has market value, and has incentives. It is much more stable than the BTC test network (those who have used the BTC test network will understand), and much faster (one block in 30 seconds).
Joint mining with 1/3 of the BTC mainnet (mainnet miners can mine a Fractal block every 90 seconds), theoretically achieving 80–90% of the BTC mainnet security
Because it is 100% consistent with BTC, all kinds of XXRC20 assets and infrastructure on BTC can be seamlessly migrated without changing a line of code.
It will implement OP_CAT, ZK native verification OPCode and other "controversial" opcode proposals faster than the BTC mainnet
Based on the fourth point, in the future, inscription-based contracts can be implemented through scripts.
If someone else did this, you would think it was strange, but it seems like Unisat is the perfect fit.
Arch — Compared to the various “aesthetically fatigued” BTC EVM L2/sidechains, Arch brings programmability to BTC through an indexer + ZKVM with decentralized Prover, similar to a 1.5 layer — transactions are triggered through L1, and various asset conversion logics are executed in Arch’s ZKVM, eventually generating ZK proofs and broadcasting the results back to the BTC mainnet.
It feels to me that it is similar to RGB++, both of which rely on BTC mainnet transactions to trigger. The difference is that RGB++ uses isomorphic binding based on CKB Cell, while Arch relies on indexer + ZKVM to achieve it.
Quarry — Made the BTC-based joint mining into an Infra form, which is equivalent to making a set of miners or computing power versions of "OP Stack" + "Eigen Layer"
In simple terms, you can quickly launch a POW chain through their Quarry, which can be jointly mined with BTC miners and ensure its own security through the hashrate of BTC miners. The token rewards are given to the participating miners, similar to EigenLayer's AVS rewards. Compared with EigenLayer or Babylon, which strive for the POS security of BTC and ETH holders, Quarry strives for the hash power security of miners. However, in the market where POS is popular, it is still worth observing how much share POW Appchain can take.
Solana
The most interesting thing about Solana during this period should be the concept of "modularity"
As we all know, ETH is taking the concept of modularization, while Solana has always been the representative of the monolithic chain camp.
In the past few months, we have indeed talked about several projects that are modularized on Solana.
For example, MagicBlock — @magicblock, Sonic — @SonicSVM, Solforge, Mantis — @mantis, etc.
Magicblock’s main product is an Ephemeral (temporary) Rollup — the main concept is “delete after use, burn after reading”. This concept was first proposed by AltLayer in 2017, but it is not the main selling point of Alt Layer now. As a project focusing on Solana’s full-chain game engine, MagicBlock’s Ephemeral Rollup should be part of their solution.
Sonic focuses on the Gaming Appchain on Solana, and recently announced the completion of its financing. It uses a HyperGrid Framework architecture that allows games to easily launch an SVM Appchain. As the first L2 prototype, Sonic can be understood as XAI on Arb?
Solforge is a more general Appchain Stack, intended to be positioned as the SVM version of OP Stack or Arbitrum Orbit.
Mantis is an SVM Rollup of the Intent settlement layer. It is not limited to serving the Solana ecosystem. The OrderBook Flow related to EVM can also be settled in Mantis. After all, Solver is naturally endowed with partial chain abstract properties.
Here are a few interesting points worth noting
Although Solana focuses on single-chip high performance, it is said that after a game became popular in the first half of the year, the TX of this game accounted for as much as 20% of the entire chain, and this is when the daily active users are only in the four or five digits. I dare not imagine what kind of load it will bear if the daily active users go up a level or if several similar game chains appear. This may also be an important catalyst for the idea of "modularization" in the Solana ecosystem;
Toly himself went from being against modularization last year to being neutral in this direction this year, as can be seen from his Twi this year;
Many people at the Solana Foundation tend to support modularization, and many developers also believe that Solana's modularization is imperative;
Kyle from Multicoin has been an evangelist for Solana and monolithic chains, and he is said to still be against the concept;
Solana’s infrastructure in the next 6-12 months should be an interesting observation. In addition to the rise of modular narratives, the launch of FireDancer’s streamlined version before the end of the year and the full version next year will bring improvements to Solana’s TPS and stability, which is also very worth looking forward to.
Restaking
Restaking should be the hottest track in the past six months, no doubt about it.
However, I found that many people do not know the difference between the two leading companies, Babylon and EigenLayer. Even some of the project parties I talked to are confused about this, so it is worth talking about it separately.
In short, Eigen can set up relatively complex slashing mechanisms because it is naturally capable of smart contracts. For example, the first prototype AVS EigenDA was created this way. If you want to use Babylon to make something like "BabylonDA", it is impossible because the script of the original BTC chain cannot support such complex things.
But at the same time, Babylon's black technology EOTS (extractable one-time signature) and BTC timestamp protocol are also not available in Eigen. This is also the confidence that Babylon can be the only Restaking in the BTC ecosystem, focusing on "native BTC Restaking", which is also something that Eigen cannot achieve.
Of course, this native BTC Restaking can only achieve limited functions, and basically covers two points. One is to help the POS chain prevent Long Range Attack through the BTC timestamp protocol, and the other is to help the POS chain achieve or cold start its POS security consensus. In a nutshell, if you want to launch a chain, you can find me. If you want to do DAPP, please turn left and go to Eigen next door.
If you really want to use Babylon to make an AVS, can you implement something like EigenDA or Oracle? The answer is "yes", but you need an "extension package". For example, Chakra — @ChakraChain or SatLayer — @satlayer, "put a layer of baby" on top of Babylon, use the built-in smart contracts of these two projects to implement a more complex slashing mechanism, and then you can develop DAPP genre AVS like DA, storage, oracle, etc.
To put it more abstractly, in terms of functionality alone, Babylon+Chakra/SatLayer = Eigenlayer
On the Babylon side, in addition to the two ecological projects mentioned above that are committed to making Babylon as "complex" as Eigen, there are also LRT ecological niches such as Solv Protocol and Lorenzo that are benchmarked against EtherFi and Renzo. On the Eigen side, because it is inherently "complex enough", the Stack or "extension package" has been stacked to a higher level. For example, Ethos - @EthosStake is doing the Coordination/Interoperability Layer of AVS, Aethos - @aethosnetwork is doing the Programmable Policy (policy editing) Layer of AVS, etc. It feels that as the Stack on the Eigen side becomes richer and the infrastructure becomes more and more complete, Eigen may become more and more like an AWS. In the end, you can achieve the "security level + infrastructure suite" you want to buy with a variety of clicks and drags. On top of that, whether you want to start a chain or make a storage or Oracle-like DAPP is completely your freedom.
P.S. I recently chatted with a FA, and he said that he had talked to at least 50 or 60 VCs recently. Some were looking at Infra, some were looking at games, and some were looking at Bitcoin. But there was only one track that all VCs were looking at, without missing a single one! Can you guess which one it was?
The answer is: Ton…
However, investing in Ton is much more difficult than investing in ETH or Solana. If Notcoin had approached VCs with a deck or demo six months ago, how many VCs would have decided to go all-in after seeing this?
If I have the chance, I will write about Ton again in the next research report.
Disclaimer: Some of the projects mentioned above are Portforlio of ABCDE, so there may be some conflicts of interest. Therefore, this is not an investment advice, but a simple popular science article.
About ABCDE
ABCDE is a VC focused on leading top Crypto Builders. It was co-founded by Huobi Cofounder Du Jun, who has worked in the Crypto industry for more than 10 years, and former Internet and Crypto entrepreneur BMAN. The co-founders of ABCDE have built multi-billion dollar companies in the Crypto industry from scratch. Because we are entrepreneurs, we understand entrepreneurs better. We have built an end-to-end ecosystem for ABCDE's Builders, including listed companies (1611.HK), exchanges (Huobi), SAAS companies (ChainUP), media (CoinTime.com), developer platforms (BeWater.xyz), etc.
Twitter：https://twitter.com/ABCDLabs
Website：www.ABCDE.com
