Bitcoin Ecosystem and Inscription Craze: The Innovative Path of Established Projects

The surge of Bitcoin and the flourishing development of the inscription ecosystem have become the main focus of the cryptocurrency world this year. The rise in Bitcoin prices is attributed to multiple factors, including the prosperity of the on-chain ecosystem, expectations for a spot ETF, the approaching halving cycle, and the anticipation of potential interest rate cuts by the Federal Reserve. At the same time, the massive entry of institutional investors has also provided strong momentum for Bitcoin, and these factors have collectively driven significant growth for Bitcoin this year.

At the same time, the inscription ecosystem represented by Ordinals, including non-fungible tokens (NFTs) and fungible tokens (FTs), not only injects new vitality into the Bitcoin ecosystem but also impacts other public chains. Almost all major public chains have developed their own inscription applications, and many established projects have taken this opportunity to rejuvenate.

Bounce: Bitcoin Ecosystem Project Auction and Layer 2 Innovation

Bounce Finance, as an Auction-as-a-Service (AaaS) protocol, provides comprehensive token issuance services for projects. The platform supports multiple blockchain networks, allowing users to create and participate in various types of auctions, including tokens, NFTs, physical collectibles, and advertising spaces.

Recently, Bounce launched several auctions for Bitcoin ecosystem projects. These projects were initially valued low, but as the auctions progressed, the tokens of early projects could be used as participation tools for subsequent auctions, leading to outstanding performance. Bounce's native token AUCTION plays an important role in the auctions, which is why its price has risen.

Taking the latest GoDID project auction as an example, GoDID is a decentralized identity (DID) market aggregation platform that provides services for ENS, Space ID, and Bitcoin Ordinals DID. The distribution plan for its token BDID includes: 20% for users who purchase lottery tickets using AUCTION, 40% for AUCTION stakers, 20% for stakers of the stablecoin DAII issued by the early project BitStable, and 5% for users participating in airdrop mining using MUBI, BSSB, AUCTION, and WBTC.

In addition, Bounce also announced the BounceBit project, which is a blockchain solution designed specifically for the Bitcoin ecosystem, built on Binance Bitcoin BTCB and AUCTION, and is planned to be launched in 2024.

Uniswap: Expanding to Rootstock

Uniswap, as a leading decentralized exchange (DEX), has launched multiple versions and expanded to multiple chains. Recently, GFX Labs deployed Uniswap V3 to the Bitcoin sidechain Rootstock via Oku, which is seen as an important step for Uniswap's expansion into the Bitcoin ecosystem.

GFX Labs has received funding from the Uniswap Foundation to develop the trading frontend Oku based on Uniswap V3. Oku offers features such as an order book, price charts, trading history, and limit orders.

Rootstock (RSK) is a sidechain compatible with the Bitcoin network that supports the Ethereum Virtual Machine (EVM), securing its safety through merged mining with Bitcoin. RSK introduces a joint guarantor model where trusted entities in the community are responsible for managing the asset transfers between Bitcoin and RSK, providing additional security assurances.

As of December 19, the liquidity on the Oku platform has reached $535,000.

Magic Eden: Multi-Chain Layout of the NFT Market

Magic Eden initially focused on the NFT market of the Solana blockchain, occupying an important position in the Solana ecosystem. The platform is known for its user-friendly interface, low transaction fees, fast transactions, and diverse NFT collections.

In March of this year, with the rise of Ordinals NFTs, Magic Eden announced its entry into the Bitcoin ecosystem, marking an important step in its multi-chain strategy. Currently, NFT projects in the Bitcoin ecosystem such as bitmap and Bitcoin Frogs rank among the top in trading volume on the Magic Eden platform, demonstrating its influence in the multi-chain NFT market.

Nostr: The Fusion of Decentralized Social Networking and Micro-Payments

Nostr is a decentralized social protocol supported by Twitter co-founder Jack Dorsey. The protocol began in November 2020 and aims to establish a global, decentralized, censorship-resistant communication network.

In September this year, Nostr underwent the NIP-57 upgrade, introducing a small payment feature called "Zaps." This allows users to make small tips or payments through the Nostr client, enabling fast and low-cost transactions within the Nostr ecosystem. Zaps are primarily implemented via the Lightning Network, making the process efficient and cost-effective.

The operation process of Zaps is as follows: After the user initiates a Zap request on the Nostr client, if the recipient's lightning wallet supports Zaps, the LNURL server will confirm the recipient's public key. Then, the client creates a Zap request that contains key data, and the LNURL server responds with the required invoice. After the user completes the payment, the amount is transferred directly to the recipient's lightning wallet.

Currently, the number of payments via Zap has exceeded 50,000.

ALEX: B20 Exchange and Bitcoin Oracle

ALEX was originally a DeFi platform on Stacks, offering features such as DEX, Launchpad, cross-chain bridge, staking, mining, and lottery. Data shows that ALEX's total locked value (TVL) is $38.8 million, accounting for 82.3% of Stacks' TVL.

With the rise of inscriptions, ALEX has developed the B20 decentralized exchange, specifically for trading BRC20 tokens. In B20, these BRC20 tokens can be traded using sUSDT (USDT cross-chain from the BNB chain to Stacks) as the base currency.

In addition, ALEX plans to launch the first Bitcoin oracle for BRC20 tokens. This work is being carried out in collaboration with BRC20 founder @domodata and major off-chain indexers such as BestinSlot, OKX, Hiro, and Unisat. ALEX aims to leverage the programmability of Stacks and Bitcoin's state reading capabilities to lead the decentralized consensus of BRC20 indexing, referred to as "the indexer of indexers." This Bitcoin oracle is designed to verify each BRC20 event and update global balances in decentralized on-chain contracts.

The Debate on Public Chain Inscriptions

After the successful application of inscription technology on Bitcoin, it quickly expanded to other public chains. Currently, over 30 public chains have released or are preparing to release inscriptions, such as Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, and more. The minting process of inscriptions even led to temporary outages on several networks including Arbitrum, TON, and IOST.

However, on smart contract chains, the significance and practicality of inscriptions have sparked discussions. Taking Ethscriptions on Ethereum as an example, it reduces transaction costs by utilizing calldata and avoiding the storage and execution of traditional smart contracts. However, this approach may also introduce new security risks, especially when dealing with complex data structures or logic. Furthermore, relying solely on calldata may limit the functionality and flexibility of inscriptions in certain applications.

Conclusion

In the development of the Bitcoin ecosystem, various projects have shown innovation: Bounce has created significant economic benefits through a unique auction mechanism and plans to develop Bitcoin Layer 2; Nostr combines decentralized social networking with micro-payments; ALEX has developed a BRC20 trading market and is working on a decentralized Bitcoin oracle; Uniswap and Magic Eden have expanded their business into the Bitcoin ecosystem.

Inscription technology has successfully expanded to numerous public chains. For non-smart contract chains like Bitcoin, inscription technology is especially important. For smart contract chains like Ethereum, while inscriptions reduce on-chain storage and execution costs, they may also introduce new security challenges, and their functionality is not as flexible as traditional smart contracts. With the continuous development of technology, we look forward to seeing more innovative applications emerge, further promoting the development of the entire cryptocurrency ecosystem.