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

The significant growth of Bitcoin and the flourishing development of the inscription ecosystem constitute the main narrative in the cryptocurrency world this year. The rise in Bitcoin's price is attributed to various factors, including the prosperity of the ecosystem, expectations surrounding spot ETFs, the upcoming halving event, 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.

The inscription ecosystem, especially represented by Ordinals, non-fungible tokens (NFTs) and fungible tokens (FTs), has not only brought new vitality and attention to the Bitcoin ecosystem but has also spread its influence to other public chains. Almost all major public chains have developed their own inscription applications. Many existing projects have also joined this trend, seizing the opportunity to rejuvenate.

Bounce: Bitcoin Ecosystem Project Auction and Layer 2 Plan

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 had a low initial valuation, but subsequent auctions can use the tokens from previous projects as participation tools, resulting in strong performance. As Bounce's native token AUCTION can also be used in the auctions, its price has also increased.

Taking the latest GoDID auction as an example, GoDID is a decentralized identity (DID) market aggregator that serves multiple DID service providers. Its token BDID distribution plan includes: 20% to users who purchase lottery tickets using AUCTION, 40% to AUCTION stakers, 20% to stakers of the stablecoin DAII issued by the early project BitStable, and 5% to users participating in airdrop mining.

In addition, Bounce also announced the BounceBit project, which is a blockchain solution designed specifically for the Bitcoin ecosystem, built on Bitcoin Layer 2 based on BTCB and AUCTION, scheduled to launch in 2024.

Uniswap Expands to Rootstock

Uniswap, as a leading decentralized exchange, has been continuously evolving and expanding. Recently, through the efforts of GFX Labs, Uniswap V3 has been deployed on the Bitcoin sidechain Rootstock, which is seen as an important step for Uniswap to expand into the Bitcoin ecosystem.

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

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

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

Magic Eden Enters the Bitcoin NFT Market

Magic Eden, as a major NFT marketplace focused on the Solana ecosystem, announced in March this year its expansion into the Bitcoin ecosystem, which is an important step in its multi-chain strategy.

Currently, NFT projects in the Bitcoin ecosystem, such as bitmap and Bitcoin Frogs, have ranked among the top in trading volume on the Magic Eden platform, indicating that their influence in the Bitcoin NFT market is growing.

Nostr: The combination of decentralized social networking and micropayments

Nostr is a decentralized social protocol that has the support of Twitter co-founder Jack Dorsey. In September of this year, Nostr underwent the NIP-57 upgrade, adding 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 ecosystem.

Zaps are primarily implemented through the Lightning Network, making the process efficient and cost-effective. After a user initiates a Zap request in the Nostr client, if the recipient's Lightning wallet supports Zaps, the transaction can be completed quickly. Currently, the number of Zap payments has exceeded 50,000.

ALEX: B20 Exchange and Bitcoin Oracle

ALEX was originally a DeFi platform on Stacks, offering various functions such as DEX, Launchpad, and cross-chain bridges. During the inscription craze, ALEX developed a decentralized exchange called B20, specifically for BRC20 token trading. B20 supports trading with sUSDT as the base currency, which is USDT that has crossed from the BNB chain to Stacks.

In addition, ALEX plans to launch the first Bitcoin oracle for BRC20 tokens. This work is being done in collaboration with the creators of BRC20 and several key off-chain indexers. ALEX aims to leverage the programmability of Stacks to lead the decentralized consensus of BRC20 indexing, known as "the indexer of indexers." This oracle is designed to verify each BRC20 event and update global balances in on-chain contracts.

The Inscription Debate of Various Public Chains

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

Recently, the minting of the first inscription INJS on Injective has caused controversy. Due to the need to pay a fee to the project team for each minting, users have expressed dissatisfaction. This reflects users' expectations for free launches of inscriptions.

For smart contract chains, inscription projects like Ethscriptions may be more cost-effective than traditional smart contract transfers in certain cases, as they reduce transaction costs by using calldata and avoiding traditional storage and execution. However, this approach may introduce new security risks and could limit the implementation of certain complex applications.

Summary

In the development of the Bitcoin ecosystem, multiple projects have shown innovation: Bounce has launched a unique auction model and plans to develop Layer 2; Nostr combines decentralized social networking with micro-payments; ALEX is developing a BRC20 trading market and plans to launch a decentralized Bitcoin oracle; Uniswap and Magic Eden have expanded their business into the Bitcoin ecosystem.

Inscription technology has expanded to numerous public chains. For non-smart contract chains like Bitcoin, inscriptions have introduced a new way of asset issuance. On smart contract chains like Ethereum, although inscriptions may reduce certain operational costs, they can also bring new security challenges, and their functionality is not as flexible as traditional smart contracts.