2024 Bitcoin Ecosystem Tracks and Representative Projects to Watch

With the passage of BTC ETFs and the hype around ETH ETFs, the ETH/BTC Exchange Rate continues to strengthen, and some funds are gradually shifting from BTC to ETH and from BTC to ETH ecosystems. The Bitcoin ecosystem may enter a calm build phase.

This article will analyze the Bitcoin ecological track based on personal understanding and take stock of the representative projects of the track. It is worth noting that the Bitcoin ecosystem is still in its infancy, and the risks are high, so investors need to make rational judgments.

Launchpad
BRC-20 provides a convenient way for the Bitcoin network to issue assets, providing opportunities for grassroots counterattacks, while also allowing a variety of low-quality inscription projects to crowd cyberspace and distract users. With the original intention of selecting high-quality projects for users, Launchpad was born. Launchpad is one of the most mature tracks in the current Bitcoin ecosystem, which can not only build the first security barrier for users to invest, but also continue to empower their own platform coins.

However, with the growth of staking users, the winning rate and share will become more and more volatile, and in order to continue to maintain the value of the platform coin, Launchpad needs to continue to launch new projects, in this process, especially when more users rely on Launchpad, Launchpad is prone to intentionally or unintentionally list inferior assets due to the interests behind it. Even if it is a high-quality asset, if the return does not meet expectations, it is easy to cause complaints from early users.

TurtSat
TurtSat is one of the mainstream launchers on Bitcoin Ordinals, and most of the projects incubated/launched by TurtSat have good returns, including CHAX Bitcoin and MultiBit, but there are also doubts about the serious rat trap of the Dova project and the cooperation with the suspected backdoor project Copycat.

Bounce
At the heart of Bounce's offering is a Decentralization Auction Platform that creates and participates in auctions of Tokens and Non-fungible Tokens for users. Prior to Bitcoin Ordinals, Bounce's AUCTION Token were already listed on major exchanges, including BitStable, the Bitcoin Stable Coin protocol, and BDID, the Ordinals DID protocol.

Decentralized Finance
Before the launch of centralized exchanges, inscription assets were traded in the same way as earlier Non-fungible Token Maker transactions, and instant transactions could not be realized. Since Smart Contracts are not available on the Bitcoin network, this makes it difficult to implement Decentralized Finance features like Ethereum DEXs, lending, etc. on Bitcoin. There are several ways to achieve similar functionality, either indirectly or through third-party solutions: Smart Contract on Sidechain in parallel with BitcoinBlockchain, Cross Chain Technology, Atomic Swaps, Lighting Network L2, etc., using third-party protocols.

ALEX
ALEX is an integrated trading platform for crypto assets with Bitcoin as the settlement layer and Stacks as the Smart Contract layer. At present, ALEX has launched the B20 (Orderbook)swap function, allowing users to trade BRC-20 assets through AMM.
ALEX HAS RAISED $8.3 MILLION IN AGGREGATE FUNDING AND SECURED AN UNDISCLOSED AMOUNT OF STRATEGIC FUNDING IN DECEMBER.

BendDAO
BendDAO, an established lending project on the Ethereum Non-fungible Token, announced in December last year that it would embrace the BTC ecosystem and will offer BTC Non-fungible Token lending and will support the wBTC Liquidity pool as a loanable asset. Exploring ways to achieve seamless interaction between BTC Non-fungible Token and BendDAO, with solutions that rely on third-party Cross-Chain Interaction bridges and Multi-signature WalletCross-Chain Interaction bridges.

BitStable
Bitstable is a Stable Coin protocol on the Bitcoin Network incubated by Bounce. Bitstable is cleverly designed to allow users to mint Stable Coin DAII on the Bitcoin network through BRC-20 assets ORDI, MUBI (MultiBit) and BSSB (platform Token) as collateral, and can redeem it for ETH DAII through the Cross-Chain Interaction bridge MultiBit; due to the lack of Smart Contracts, Bitstable's governance system decision-making ability is very important, and it can be manually adjusted minting, Parameters for destruction and staking. In addition, Bitstable has built a staking feature for DAII on the Bitcoin network, and staking DAII can earn the platform Token BSSB.

Bitstable also supports the provision of collateral from Ethereum and primarily uses USDT as collateral for DAII. According to the official website, the current supply of DAII is about 21.73 million, of which ERC-20 DAII reaches 21.64 million, and the collateral includes 18.63 million USDT and 3 million FDUSD in ERC-20, and 6,479 ORDI, 1.33 million MUBI and 9,000 BSSB in BRC-20.
Bitstable has completed a Salus Security audit.

BitFlow
BitFlow provides users with a Bitcoin Open Source platform that can be traded and earned using BTC, utilizing technologies such as Partially Signed Bitcoin Trading (PSBT), Atomic Swaps, and Stacks Bitcoin (sBTC), with core features such as Stable Coin trading, Bitcoin trading, Liquidity, and yield Mining. BitFlow plans to launch BTC Atomic Swaps in Q4 2023 in its roadmap, but it is not yet live.

BitFlow has received investments/donations from the Stacks Foundation and Bitcoin Startup Lab, among others, and has been audited by Coinfabrik and StrataLabs.

Cross-Chain Interaction Bridges
Bitcoin's Cross-Chain Interaction Bridge may be much more important than the Cross-Chain Interaction Bridge between EVMs, which not only carries the migration of Bitcoin network assets, but also serves as an important way for Bitcoin to access a more complex financial system. But because of Bitcoin's value and influence, the security of its Cross-Chain Interaction Bridge is particularly important, and any security breach could cause significant economic losses and market impact. The design and implementation of Cross-Chain Interaction bridges requires strict consideration of security and Decentralization, and such security is not only reflected in the prevention of potential Hacker attacks, but also needs to have a solution to deal with the crisis of index consensus divergence in some assets.

MultiBit
MultBit is the first BRC-20 cross-chain interaction project between Bitcoin and the EVM network incubated by TurtSat, which realizes the transfer of tokens between different networks through multi-signature contracts and relies on listening nodes to monitor the transaction status on the Bitcoin and EVM networks. Since its launch, MultiBit Bridge has completed more than $490 million in cross-chain interaction volume. In addition, MultiBit also supports Cross-Chain Interaction of Non-fungible Tokens from Bitcoin to Ethereum, and will expand to staking, mining, and trading functions in the future.
MultBit has completed a Salus Security audit.

Layer 2
There is still a lot of debate about the necessity of Bitcoin Layer 2, which mainly depends on the understanding of the current performance of the Bitcoin network, future development goals, and market demand, such as the significant rise of the network Transaction Fee when BRC-20 is hot, and it is hoped that there will be L2 solutions that can be dropTransaction Cost by batch processing transactions on top of the main chain, but any L2 needs to maintain the security and Decentralization of the network while improving efficiency; Whether Bitcoin L2 is strong enough, whether L2 could lead to different tiers of the Bitcoin ecosystem, whether assets that have left the expensive Bitcoin Mainnet still belong to the Bitcoin network itself, etc. Regardless of the arguments, the pros are already on the path to Bitcoin Layer 2.

Bitfinity Network
Bitfinity is an EVM-compatible L2 network built on ICP as a Bitcoin and on-chain asset, which uses a threshold encryption scheme called Chain-Key, which is able to create a DecentralizationCross-Chain Interaction bridge between Bitfinity and Bitcoin Mainnet, which is Private Key regenerated periodically every 11 minutes via "moon-math". Bitfinity has been Testnet live and is expected to go live in January-February Mainnet will have Bitfinity native Token BFT.

Bitfinity closed a $7 million Token Funding Round in January this year, with investments from Polychain Capital and ParaFi Capital, among others, at a recent valuation of $130 million.

Nubit
Nubit is a Bitcoin-native data availability layer introduced by Riema Labs that aims to change the way transactions are processed on the Bitcoin network, making them more cost-effective and efficient. In addition, Riema is also working on Bitcoin's native data availability standard, BRC-1310, which includes BTC staking, data availability sampling techniques, data proof-of-care directly on Bitcoin networks, and Decentralization bridges that will drop trust requirements, increase data throughput, drop costs, and improve data accessibility.

Riema Labs closed an undisclosed Angel Round funding round in January of this year, with investment from Bounce Finance, BRC-20 founder Domo, and others.

Non-fungible tokens
From the point of view that the data is fully stored on-chain and immutable, it may be more appropriate to store art collections as Non-fungible Tokens on Bitcoin than on Ethereum, including in the early days when Casey created Ordinals to store something on the Bitcoin network that will never change. Although Bitcoin Non-fungible Token is still in its early days, there are also excellent projects such as Bitcoin Frog and NodeMonkes, as well as some early explorations of using Bitcoin Non-fungible Token to achieve financial leverage.

Liquidium
Liduidium is a peer-to-peer lending platform built on the Bitcoin network that allows users to borrow and lend BTC with Bitcoin Ordinals Non-fungible Token assets or BRC-20 assets as collateral through partially signed Bitcoin transactions (PSBT) and discrete log contracts (DLCs).
Liquidium raised $1.25 million in a pre-seed funding round in December, with investors including Bitcoin Frontier Fund and Side Door Ventures, among others.

(Source: defioasis, Colin Wu)