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

In 2023, the main theme of the cryptocurrency market is jointly composed of the strong rise of Bitcoin and the vigorous development of the inscription ecosystem. The increase in Bitcoin's price is attributed to multiple favorable factors, including the prosperity of the on-chain ecosystem, expectations for a spot ETF, the approaching halving cycle, and the potential interest rate cut policy by the Federal Reserve. At the same time, the large-scale entry of institutional investors has also brought strong upward momentum to Bitcoin.

The inscription ecosystem, especially represented by Ordinals, has injected new vitality into the Bitcoin ecosystem with non-fungible tokens (NFTs) and fungible tokens (FTs), and has also prompted other public chains to follow suit. Almost all mainstream public chains have developed their own inscription gameplay, and many established projects have also seized this opportunity to rejuvenate.

Bounce: Auction Innovation and Layer 2 Layout

Bounce Finance, as a multi-chain supported Auction-as-a-Service (AaaS) protocol, has recently launched several auction events for Bitcoin ecosystem projects. These projects have a relatively low initial valuation, and subsequent auctions can use tokens from previous projects as participation tools, creating a virtuous cycle that drives project performance and the price increase of Bounce's native token AUCTION.

Taking the GoDID project as an example, the allocation plan of its token BDID fully utilizes the ecological advantages of the Bounce platform, including rewards for AUCTION holders and stakers, as well as linkage with previous auction projects.

In addition, Bounce has also announced the BounceBit plan, which is a Layer 2 solution designed specifically for the Bitcoin ecosystem, expected to launch in 2024.

Uniswap: Entering the Bitcoin Sidechain

As a leader in decentralized exchanges (DEX), Uniswap has recently deployed its V3 version to the Bitcoin sidechain Rootstock through GFX Labs. This move marks an important expansion of Uniswap into the Bitcoin ecosystem.

Rootstock (RSK) is a Bitcoin sidechain that is compatible with the Ethereum Virtual Machine (EVM). It ensures security through merged mining and introduces a joint guarantor model to manage cross-chain asset transfers.

As of December 19, Uniswap's liquidity on Rootstock has reached $535,000.

Magic Eden: Multi-Chain Layout of NFT Market

Magic Eden, as the leading NFT marketplace in the Solana ecosystem, announced in March this year its expansion into the Bitcoin ecosystem, in line with the rising trend of Ordinals NFTs. This move not only expands Magic Eden's business scope but also strengthens its position in the multi-chain NFT market.

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.

Nostr: The Fusion of Social and Payments

Nostr, as a decentralized social protocol, underwent the NIP-57 upgrade in September this year, introducing a small payment feature called "Zaps." This feature is implemented through the Lightning Network, allowing users to make quick and low-cost tips or payments within the Nostr ecosystem.

As of now, the number of payments made through Zap has exceeded 50,000, demonstrating users' positive acceptance of this feature.

ALEX: BRC20 Trading and Oracle Innovation

ALEX was originally a DeFi platform on Stacks, and has recently developed a decentralized exchange called B20, specifically for BRC20 token trading. The platform also offers new users STX tokens to pay for the ecosystem's gas fees, and uses sUSDT as the base trading currency.

In addition, ALEX plans to launch the first Bitcoin oracle for BRC20 tokens, aiming to lead the decentralized consensus of the BRC20 index. This initiative is referred to as "the indexer of indexers," with the goal of verifying and updating the global balance of BRC20 events in on-chain contracts.

Competition of Inscriptions among Public Chains

The popularity of inscription technology has expanded to multiple public chains, including Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, and more. This expansion has sparked discussions about the significance of inscriptions on smart contract chains.

Taking Ethscriptions on Ethereum as an example, it reduces transaction costs by using calldata and avoiding the storage and execution of traditional smart contracts. However, this approach may introduce new security risks and limit the implementation of certain complex functions.

Conclusion

In the wave of development within the Bitcoin ecosystem, several established projects have demonstrated their innovative capabilities. Bounce has launched a unique auction model and plans to develop Layer 2; Nostr combines social and payment functions; ALEX has developed a BRC20 trading market and is working on a Bitcoin oracle; Uniswap and Magic Eden have expanded their operations into the Bitcoin ecosystem.

Although inscription technology is widely used across various public chains, its significance and impact differ on different types of blockchains. For non-smart contract chains like Bitcoin, inscription technology brings important functional expansions; whereas for smart contract platforms like Ethereum, inscription technology may introduce new challenges and limitations while reducing costs.