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

In 2023, the mainstream narrative in the cryptocurrency world is composed of the rise of Bitcoin and the flourishing development of the inscription ecosystem. The increase in Bitcoin's price is attributed to multiple factors, including the prosperity of the on-chain ecosystem, expectations for spot ETFs, the approaching halving cycle, and the Federal Reserve's potential interest rate cuts. At the same time, the large-scale 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 injected new vitality into the Bitcoin ecosystem but also influenced other public chains. Almost all mainstream public chains have developed their own inscription gameplay, and many established projects have also seized this opportunity to rejuvenate.

Bounce: Bitcoin Ecological 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, enabling users to create and participate in various types of auctions, including tokens, NFTs, physical collectibles, and advertising spaces.

Recently, Bounce has launched auctions for multiple Bitcoin ecosystem projects. These projects have a low initial valuation, but during subsequent auctions, tokens from previous projects can be used as participation tools, resulting in good performance for the projects. Bounce's native token AUCTION plays an important role in the auctions, which has also led to a price increase.

Taking the recent GoDID project auction as an example, GoDID is a decentralized identity (DID) marketplace aggregator. 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, WBTC.

In addition, Bounce has announced the BounceBit program, a blockchain solution designed specifically for the Bitcoin ecosystem, built on Binance Bitcoin BTCB and AUCTION as a Bitcoin Layer 2, expected to launch in 2024.

Uniswap: Expanding to the Bitcoin Sidechain 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 through Oku, which is seen as an important expansion of Uniswap into the Bitcoin ecosystem.

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

Rootstock (RSK) is a Bitcoin sidechain that is compatible with the Ethereum Virtual Machine (EVM), securing its safety through merged mining with Bitcoin, and has SBTC which is 1:1 pegged to Bitcoin. RSK adopts a joint guarantor model, where trusted entities from the community are responsible for managing the asset transfers between Bitcoin and RSK, providing additional security.

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

Magic Eden: NFT Market Enters Bitcoin Ecosystem

Magic Eden was originally the main NFT marketplace in the Solana ecosystem, known for its user-friendly interface, low transaction fees, and fast transactions. In March of this year, with the rise of Ordinals NFTs, Magic Eden announced its expansion into the Bitcoin ecosystem, marking an important step in its multi-chain strategy.

Currently, the trading volume of Bitcoin ecosystem NFTs such as bitmap and Bitcoin Frogs ranks among the top on Magic Eden, demonstrating their significant position in the Bitcoin NFT market.

Nostr: A Combination of Decentralized Social Media and Lightning Network Payments

Nostr is a decentralized social protocol supported by the co-founder of Twitter. In September this year, Nostr underwent the NIP-57 upgrade, which added a small payment feature called "Zaps" that allows users to make quick, low-cost tips or payments through the Nostr client.

Zaps are mainly realized through the Lightning Network. After a user initiates a Zap request in the Nostr client, if the recipient's Lightning wallet supports Zaps, the transaction will be completed through the LNURL server. Currently, the number of Zap payments has exceeded 50,000.

ALEX: BRC20 Trading Platform and Bitcoin Oracle

ALEX was originally a DeFi platform on Stacks, providing various functions such as DEX, Launchpad, cross-chain bridge, and staking. With the popularity of inscriptions, ALEX developed a decentralized exchange called B20, specifically for trading BRC20 tokens.

In addition, ALEX also plans to launch the first Bitcoin oracle for BRC20 tokens. This work is being carried out in collaboration with the creators of BRC20 and several key off-chain indexers, aiming to lead the decentralized consensus of BRC20 indexing.

Public Chain Inscription Craze

The inscription craze has expanded to over 30 public chains, including Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, and more. Some networks even experienced brief outages due to the minting of inscriptions.

Taking Ethscriptions on Ethereum as an example, the transfer fees may be lower than those of regular smart contract transfers, but it may also introduce new security risks or limit the practicality of certain applications.

Summary

In the development of the Bitcoin ecosystem, various projects are seeking innovation points: Bounce has developed a unique auction model and Bitcoin Layer 2; Nostr combines decentralized social networking with micropayments; ALEX has developed a BRC20 trading market and a decentralized Bitcoin oracle; Uniswap and Magic Eden have expanded their business into the Bitcoin ecosystem.

The application of inscription technology on various public chains demonstrates its wide-ranging influence. For non-smart contract chains like Bitcoin, inscriptions provide a new way to issue assets; while for smart contract chains, inscriptions may reduce costs but also face trade-offs between functionality and security.