On May 8, 2024, the BTC Summer Summit, sponsored by Beosin and co-organized by well-known Bitcoin ecosystem projects such as Wizz Wallet and CKB Eco Fund, was successfully concluded. The event brought together many developers, project owners and opinion leaders from the BTC ecosystem in the East and the West to discuss key topics such as the development direction and market strategy of various tracks in the BTC ecosystem, and the security risks and technical challenges currently faced by BTC Layer2.
In this event, Beosin was invited to give a speech entitled "Securing BTC Ecosystem" and had an in-depth discussion on BTC Layer2 with important guests such as Baiyu, the head of ecology of CKB Eco Fund, Louis, the founder of Omnity Network, and Weiji, the founder of Lightec. This event attracted many BTC ecology enthusiasts, technical experts and experienced practitioners to participate, and they listened to in-depth discussions on building a BTC ecological security and compliance system, and identifying and preventing related security risks.
Beosin security researcher Eaton shared his experience at the BTC Summer event
Web3 Festival is a Web3 event brand jointly launched by Wanxiang Blockchain Lab and HashKey Group and hosted by W3ME. This event will focus on the core issues of each track of Web3, and invite more than 300 globally influential speakers and more than 100 popular Web3 projects to share. Beosin will also meet you at the Web3 Festival event.
Keynote Speech: BTC Ecosystem Security and Compliance
In his keynote speech, Beosin security researcher Eaton discussed in depth the importance and urgency of the current BTC ecosystem security and compliance. According to the Bitcoin ecosystem security incidents monitored by Beosin Alert, the losses of BTC-related projects due to vulnerabilities in the past year exceeded 2 million US dollars.
In his speech, Beosin analyzed the "Runes" inscription scam, Stacks PoX-2 contract vulnerability incident, and Atomicals Market security incident to raise the audience's awareness of the security of BTC-related assets. Beosin not only focuses on traditional security risks, such as private key leakage and smart contract vulnerabilities, but also pays close attention to emerging risks and scams, such as BTC Layer2 attacks, inscription casting scams, and exit scams caused by project parties through backdoors. For specific related research, please refer to: "BTC Ecosystem Explodes, Analyzing the Potential Opportunities and Risks of Its Various Derivative Protocols" and "Inscription Science Popularization｜Understanding the Use Cases, Implementation Methods and Asset Security of Inscription Protocols".
In terms of on-chain funds, as many BTC Layer2s are launched one after another, the capital activities between the BTC mainnet and each Layer2 will become more and more frequent. Along with the active trading volume comes the mixing and cleaning of high-risk funds through the BTC Layer2 network.
In order to meet these challenges, Beosin provides comprehensive security + compliance services including smart contract security audits, real-time security warnings and responses, and KYT anti-money laundering services to users and project parties, in order to improve the security of the entire BTC ecosystem and promote the compliance development of the BTC ecosystem.
Currently, Beosin KYT supports Bitcoin mainnet, Stacks and Merlin Chain. Beoisn KYT can quickly identify suspicious transactions, conduct comprehensive address risk assessment (whether it involves attacks, darknet transactions, mixer use, fraud, extortion and gambling), and identify on-chain relationship risks through a large number of BTC address tags and black address libraries. In addition, KYT can not only conduct compliance queries on address transactions within the BTC Layer2 network, but also support cross-chain automatic penetration and association to the BTC mainnet for risk association queries, avoiding risk funds from laundering money through BTC Layer2, and helping CEX, DEX, wallets and cross-chain bridges to build KYT (know your transaction) and continuous address risk assessment capabilities that connect the BTC first and second layer networks.
In terms of security audit, Beosin has completed security audits for multiple BTC ecological projects such as 1Cat, Savmswap, and bitSmiley. In April, Beosin conducted a smart contract audit on the Merlin Chain ecological project Surf Protocol. Through formal verification, manual audit by security experts, and static analysis, the core business code of Surf Protocol was tested to help Surf Protocol fix serious vulnerabilities such as abnormal update of its protocol funding rate and transaction settlement errors.
Roundtable discussion: Security challenges and market strategies of BTC L2
Beosin held a roundtable discussion on BTC Layer2 with important guests including Baiyu, the ecological director of CKB Eco Fund, Louis, the founder of Omnity Network, Weiji, the founder of Lightec, and Leslie, the business director of BeraChain.
There are dozens of BTC Layer2s, among which Stacks, Merlin Chain, B² Network, BEVM, and Bitlayer are the most popular. There are many reasons for the need for BTC Layer2, and the most important mission is to transfer assets issued on BTC to the Layer2 network for fast and efficient transaction processing, and finally confirm the transaction on the Bitcoin main chain. This is especially effective for supporting small and frequent asset transactions, and can greatly improve the efficiency and experience of the Bitcoin network in daily application interactions.
However, the current security and centralization of BTC Layer2 are very high, especially when crossing BTC and other networks to the BTC Layer2 network, how to ensure the security of users' assets is an issue that cannot be ignored. At present, each Layer2 adopts institutional custody solutions and multi-signature wallets. In the future, each project team may adopt Discreet Log Contracts (DLC) to achieve decentralized cross-chain and improve the security of cross-chain bridges. In addition, Layer2 can also choose to achieve economic security or cryptographic security to improve network security.
In terms of market strategy, the guests discussed the market development of RGB protocol, Lightning Network and emerging BTC Layer2 protocol. The strategy of emerging Layer2 such as Merlin Chain to attract users through lock-up airdrops is successful, and the project needs users to be meaningful. The development of protocols such as Lightning Network may be used for payment of other assets in the future in the face of the trend of institutionalization of BTC holdings.
In addition, it should be noted that in the early days of BTC Layer2, using the total locked value TVL (Total Value Locked) to measure the development of BTC Layer2 has great limitations. The TVL data may be distorted, and the real TVL needs to be the part that is used for transactions. How BTC Layer2 can retain the assets deposited by users and how to encourage users to interact actively are the next issues that need to be considered and solved.
Web3 Compliance Topic Sharing: Hong Kong ETF Compliance Solutions
Previously, the first six virtual asset spot ETFs issued in Hong Kong were officially opened for trading in Hong Kong. The Hong Kong Exchanges and Clearing Limited (HKEX) warmly welcomes the listing of Asia’s first batch of virtual asset spot ETFs, which will increase the product variety in the Hong Kong market and provide investors with more choices.
On May 6, Beosin, Aegis and Tradelink successfully held the "Web3 Compliance for Banks & Broker Dealers" event to discuss in depth how to provide compliance solutions for virtual asset spot ETFs for brokers in Hong Kong. Owen, the technical director of Beosin, was invited to attend the event to provide KYT compliance solution demonstrations and related product training for brokers in Hong Kong.
Dfinity Ecosystem Keynote: Web3 Adoption and Security
On May 9, Beosin, as a partner of Pureverse and ICP, was invited to give a speech on how to promote Web3 adoption and security. Beosin's business director Alvin attended the speech. Alvin analyzed the overall Web3 ecosystem, ICP and the prospects of ckBTC, and detailed the security and compliance services provided by Beosin in the BTC ecosystem and ICP ecosystem.
During the event, Beosin exchanged views with ICP ecological projects, institutional investors, and representatives of traditional enterprises on how to integrate blockchain technology into their ecosystems, and shared their respective views on what aspects of the industry need to improve to stimulate wider adoption of Web3 based on trust, compliance, and security.
The Bitcoin Asia conference and related side events not only provided a platform for communication and learning for professionals in the BTC ecosystem, but also promoted cooperation and innovation between Web3 and traditional finance. The Beosin team and participants discussed the challenges and opportunities facing the BTC ecosystem security. At the same time, these discussions also provided valuable inspiration and thinking for users, institutions and related project teams to improve and upgrade their products.
