BTC ecological protocol inventory, which protocols can have the last laugh?

Original | Odaily Planet Daily

Author | 0xSekiro

! [BTC ecological protocol inventory, which protocols can have the last laugh?] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-ca3104ec3d-dd1a6f-69ad2a.webp) After 16 months, Bitcoin regained the $30,000 mark and hit a new stage high of $35,000. Behind the skyrocketing rise is a lot of "positive" progress in Bitcoin spot ETFs such as BlackRock. Regardless of whether the ETF will eventually pass, it is reflected in reality that the sentiment of the entire Web3 industry is warming up and the BTC ecosystem is becoming more active. **

Around the time of the price increase of bitcoin, such as October 19, Taproot Assets of the Bitcoin ecological layer 2 track announced the launch of Taproot - Taproot has also become one of the other protocols that has attracted much attention after the concept of Ordinals in the first half of the year. In addition, on October 25, BRC-20 founder Domo announced the launch of the BRC-100 protocol.

In fact, in addition to Ordinals and Taproot, the Bitcoin ecosystem is far more prosperous than expected, such as the RGB protocol based on the concept of "dyeing coins", the Bitcoin smart contract platform RootStock, and the BTC ecosystem Layer 2 Stacks, which has recently risen sharply. Incomplete statistics, there are currently more than 10 protocols for infrastructure services in the Bitcoin ecosystem, and different protocols have derived different products.

As a result, the Odaily Planet Daily conducted an inventory of the BTC ecological protocol. **

What are the BTC ecological protocols?

RGB protocol

RGB protocol, derived from the concept of Bitcoin classical scaling scheme "dyeing", and developed by LNP/BP (Lightning Network Protocol/Bitcoin Protocol) standards association, is an extensible and stealthy smart contract system. At present, there are some token products in the RGB ecosystem, such as Iris Wallet, MyCitadel, Bitmask, Shiro, Bitswap and Pandora Prime in the DeFi track, and Cosminmart and Infinitas in the ecosystem construction.

It is worth noting that the **RGB protocol is also the route choice that currently goes hand in hand with BitVM (Bitcoin Virtual Machine). **BitVM, short for Bitcoin Virtual Machine, benchmarks ETH EVM, allowing developers to run complex contracts on Bitcoin without changing Bitcoin's basic rules.

RGB also faces some issues as follows:

(1) The verification efficiency needs to be improved. RGB adopts client-side verification, which needs to trace back to the founding status of the issued contract in the user's client data, and if the history of asset transactions is very long, the amount of verified data will be exponentially amplified, which seriously affects the verification efficiency.

(2) The iteration speed of the project is too slow. Since the RGB protocol was proposed in 2018, the first available version v 0.10 was not released until April this year. Therefore, it is debatable whether the RGB protocol is officially taken seriously.

(3) The development cost is too high: It is also due to the long time lag between the original content of the protocol and the available version, so many development formats and logic have not kept pace with the times. **Developers need to adapt to the early RGB specification, which undoubtedly increases the difficulty of developer entry.

The most important thing is that the ecology is in the early stage, there is no mature specific framework display, and the projects in the ecology are more reproductions of the standard paradigms of other ecological projects (such as classic three-piece sets such as wallet, Swap, Launchpad, etc.), and there is no birth of leading products.

Stacks：

Stacks is currently hot in the market, as the hottest Layer 2 project in the BTC ecological narrative, ** its token STX has risen from $0.4 to a maximum of $0.73 in the past month, with a maximum increase of more than 80%. **

Stacks is a Bitcoin ecological smart contract platform that uses the Stacking consensus algorithm. Officially launched in 2019, its token STX also became the first token approved by the US SEC.

The advantage of Stacks is that it has introduced a PoX consensus mechanism, which improves the calculation speed of the entire chain by using Bitcoin as the basic chain and Stacks as the second layer chain, and each round of transactions, the leader selected by miners based on the random function locked by BTC is responsible for the block packaging on the Stack and sent to the Bitcoin main chain.

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To date, a total of 90 projects have been deployed in the Stacks ecosystem. But these 90 products contain relatively small TVL volumes. **DeFilama data shows that the total TVL of Stacks is currently $25.88 million, of which the number one product is decentralized exchange ALEX, with TVL of about $19.66 million. **

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Taproot protocol

Taproot Assets Protocol: Taproot Assets is a Bitcoin meta-protocol that allows developers to issue assets on Bitcoin and the Lightning Network through Taproot transactions. Not long ago, on October 19, Lighnting Labs officially launched the protocol, and the Taproot Assets protocol has also become another much-watched BTC protocol besides Ordinals since the BTC ecological narrative. **

As a protocol introduced by Lightning Labs, Taproot Assets is highly integrated, so users can make fast and cheap transactions based on Taproot. Based on Bitcoin UTXO, Taproot is also compatible with protocols such as RGB mentioned above. In addition, Taproot is popular overseas, and at the same time has a certain Fomo sentiment in China. At present, the TAP token has been deployed, and all the chips are in the hands of the project party, which may be used for project financing and ecological airdrops.

BRC-100 ：

BRC-100 is a Bitcoin protocol built based on Ordinals, in addition to its own token attributes, BRC-100 is also an application protocol, developers can also design DeFi and other application products based on the BRC-100 protocol.

Compared with BRC-20, BRC-100 not only continues the existing creation, minting and trading functions of BRC-20, but also introduces the decentralized computing of FT tokens. This function means that BRC-100 can deploy a large number of token-related products like ERC-20, such as DeFi AMM DEXs, lending functions, etc.

Rootstock：

Rootstock is a Bitcoin smart contract platform that started in 2018, raising 22,000 BTC initially. Its advantages are mainly reflected in the fact that developers can build Dapps based on Rootstock's own OS framework, and the virtual machine of RIF (Rootstock Infrastructure Framework) is also compatible with EVM, so the tokens of the Ethereum ecosystem can interact with the tokens on the Rootstock ecosystem.

According to data from Rootstock's official website, its current ecological lock-up TVL is $300 million, including 3,334 BTC (about $115 million), with a monthly trading volume of 68,400 and an active account of 72,292, which is the most outstanding protocol among many protocols in the BTC ecosystem.

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As a veteran sidechain, the Rootstock ecosystem currently has a total of 104 projects, covering 15 tracks such as swaps, cross-chain bridges, lending, oracles, payment channels, wallets, etc. It can be said to be one of the more complete BTC ecological protocols at present.

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Regarding the ecologically noteworthy projects, we can explore from the relatively scarce lending aspects of the current BTC ecosystem, such as sovryn on Rootstock, which is dedicated to uncustodial, permissionless Bitcoin lending and margin trading. At present, according to DeFilama platform data, Sovryn currently has a total hedged position of $26.28 million.

Two questions to think about

Overall, the current BTC ecosystem, despite the large number of protocols and countless products born based on various protocols, there are two problems that need to be solved:

**1. The issue of the number of active developers. **According to Developerreport data, as the number one cryptocurrency by market capitalization, the current number of BTC ecosystem developers is 340, ranking only fourth in the industry, lower than the third place Cosmos with 463 people, far lower than the number one Ethereum - the number of active developers is 1889, about 5.6 times the BTC ecosystem.

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This is only based on the calculation of full-time developers, and if part-time developers are added, the gap will be even wider. The BTC ecosystem currently has 478 part-time developers, and the total number of full-time and part-time developers has reached 818; In contrast, the total number of part-time and full-time developers in the ETH ecosystem is 5012, a difference of 6 times.

The reason why we will focus on the number of developers here is because a prerequisite for an ecological explosion is to naturally attract more developers. Only a sufficient number of developers can build and improve the overall ecological product architecture and drive the operation of the ecological flywheel.

The improvement of the ecosystem means that the difficulty of ordinary investors to enter the market is reduced and the willingness to enter the market increases. When the ecology shows sufficient flow potential, institutions and large funds outside the region will enter the market, thereby promoting the prosperity of the ecology as a whole.

It is worth noting that the current number of BTC ecosystem developers is roughly the same as the number of ETH ecosystem developers in 2017-2018. **

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**We can understand that the BTC ecology is currently on the eve of the outbreak, and the myth of the ETH ecology may be repeated in the later stage. At the same time, it can also be regarded as the current BTC ecology is still in an imperfect stage. **

**2. How to pry the attention of the BTC ecosystem Maxi Holder. **Whether it is the Ordinals in the early fire, or the current best development of Rootstock, its user composition is mainly from the traffic spillover from the EVM ecosystem. For example, Ordinals, the standard on which it is based, BRC-20, is similar in expression to the ERC-20 standard. Of Rootstock's total stake, only $115 million came from BTC, which is only 38% of the total $300 million TVL. The reason why Rootstock can receive $300 million in pledge is also largely related to its compatibility with EVM.

In other words, at present, the whale of the BTC ecology itself has not yet entered the game, and it is important to be able to absorb external traffic, but how to make the whale of the ecology itself interesting may be more important. After all, in the face of the $1.26 trillion cryptocurrency market capitalization, BTC accounts for 51.22% of the market capitalization and ETH for 17.42%, the former is 2.94 times the latter.

When it comes to unlocking BTC Holders liquidity, Stacks is moving faster. On October 20 of this year, Stacks launched the sBTC developer version. The scheme aims to do so by launching sBTC, a decentralized, smart contract-embedded token pegged to BTC 1:1. In this way, based on sBTC, it is possible to deploy application products such as DeFi and NFT that are native to the BTC ecosystem, further releasing the potential of Bitcoin to flow between L1 and L2.

Summary:

It has been 5 years since the birth of old protocols such as RGB and Rootstock, and during this period there have also been new protocols such as Ordinals and Taproot. What was once quiet BTC is now gradually becoming a quack.

Where there are rivers and lakes, there are disputes. **Different protocols are competing with each other while jointly driving the BTC ecosystem boom. **According to the Matthew effect, which has been repeatedly verified in the Web3 industry, a protocol that can really survive and be observed may need to be found in the Top 5. And the protocol that can really be called the head and occupy the vast majority of ecological resources may only be Top 3.

At present, everyone is blooming, faintly looking like the early days of the Ethereum ecosystem, but who can really survive and succeed? Perhaps more time may be needed to verify.