Bitcoin Newcomer Fractal: Ecological Innovation or Follow-the-Trend Work?

Since September, with the community frenzy triggered by Fractal, the market focus has returned to the Bitcoin ecosystem. A large number of users have participated in the assets and gameplay launched by Fractal, leading to high on-chain gas fees. There are three main reasons why Fractal can generate such enthusiasm: first, the overall market is currently sluggish, lacking fresh topics; second, based on Unisat's generous airdrop of Pizza, many users have placed high importance on Fractal's launch, and even during the testnet phase, there was extreme competition, with an estimated tens of millions of addresses participating in testnet tasks in hopes of receiving airdrops; finally, the high returns brought by asset protocols like Cat20 have led to a continuous fermentation of the profit effect, sustaining the popularity of Fractal.

In addition, Unisat's official hunger marketing strategy has also played a role in promoting the situation. Originally, the circulating supply of the airdropped FB was very small, but as on-chain competition intensified, the price of FB soared, becoming a "golden shovel" and indirectly accelerating the development of Fractal.

Given the reasons above, it is very necessary to analyze Fractal in depth.

Fractal Overview: Bitcoin Native Scaling Solution

Fractal Bitcoin is a Bitcoin scaling solution that is infinitely recursively extended based on the Bitcoin Core code. It is designed as a second-layer network or sidechain for Bitcoin, serving as a native extension of the first-layer Bitcoin network, enhancing transaction efficiency by accelerating block generation speed and expanding block capacity while maintaining orthodoxy. Its working principle includes full compatibility with the Bitcoin mainnet (, allowing users to transact on the Fractal Bitcoin network, and then interact or synchronize with the Bitcoin mainnet ), while providing faster transaction confirmations (, such as 30 seconds block generation ) and block capacity ( that is 20 times that of the Bitcoin mainnet ).

As a native expansion solution, Fractal can start from the Bitcoin main chain to achieve secure asset transfers between layers. Bitcoin and assets like BRC-20 and Ordinals can be bridged through decentralization. The underlying mechanism is a dynamic replacement rotating MPC signature mechanism, while considering the characteristics of the BRC-20 standard.

Fractal functions more like the Bitcoin testnet, supporting some features that have not yet been activated on the mainnet in advance. It is a testing ground that offers a better user experience and performance optimization, making it very suitable for experimental innovation in complex applications. At the same time, it allows users to participate and provide feedback in a real interactive environment, similar to the significance of EVM layer2 to Ethereum.

Investment and Financing: Strong Partnership to Promote Development

The Fractal Bitcoin Network was developed in collaboration by UniSat and Block Space Force. As the main developer and promoter, UniSat is a leading Bitcoin wallet with over 900,000 active users weekly. It has received funding in five undisclosed rounds, two of which were led by a certain trading platform, with participation from certain capital and certain capital.

Block Space Force is a crypto-native fund with a portfolio that includes well-known projects such as Babylon, Pendle, and Aevo. They have decades of experience in dollar A9 exits, hundredfold return project investments, and developing globally used blockchain applications. Overall, among the two project parties, Unisat's resources are more prominent, attracting many loyal users through its successful brand structure and previous generous Pizza airdrop, becoming the best endorsement for Fractal.

With the promotion of both project parties, Fractal has implemented a series of strategic plans to initiate user and developer participation. After the mainnet launch, Fractal airdropped 1 million FB tokens to over 100,000 eligible addresses and launched multiple developer resource funding programs, reflecting Fractal's ambition for ecological development.

Fractal Advantages: Performance Improvement and Innovative Assets

The highlight of Fractal lies in the performance optimization and improvement based on the Bitcoin mainnet, as well as the innovative asset issuance methods and ecological applications introduced. It can be vividly said that Fractal is using the old bottle of Bitcoin mainnet resources to hold the new wine of a brand new asset issuance method. Specifically:

The overall design of Fractal allows Bitcoin and assets such as BRC-20 and Ordinals to be bridged through a decentralized bridge. Transactions on the Fractal Bitcoin network can then interact with or synchronize with the Bitcoin mainnet, while providing faster transaction confirmations and larger block capacity than the mainnet.

Implementation Path: Multi-layer Expansion, Mining Mechanism and OP_CAT

multi-layer expansion mechanism

Fractal enhances Bitcoin transaction speed by recursively expanding layers, establishing multiple scaling layers on the Bitcoin main chain to form a tree structure. This design allows each layer to further fork, increasing the network's parallel processing capabilities. Each layer can independently process transactions and dynamically adjust the number of layers as needed. During peak transaction periods, it can quickly increase the hierarchy to handle more transactions, flexibly responding to various loads.

This is like building countless parallel highways outside the Bitcoin mainnet. Each road can expand the mainnet and can also expand other roads. Each road has its own value orientation, and users can solve congestion problems without changing their mode of transportation.

Cadence Mining ( Rhythm Mining )

Fractal uses the same PoW consensus mechanism as Bitcoin, which means BTC miners can seamlessly transition to Fractal block mining using existing ASIC, GPU, and other hardware, effectively killing two birds with one stone, improving efficiency by sharing workload, and providing additional economic benefits to Bitcoin miners.

Fractal mining is divided into two types: permissionless and merged mining. Out of every three blocks, two are generated through permissionless mining, and one is generated through merged mining. Permissionless mining allows anyone to participate; all you need to do is download the software and run a node. Merged mining is aimed at BTC miners, allowing them to mine BTC and Fractal blocks simultaneously without the need for additional hashing power.

OP_CAT

OP_CAT is an opcode used for string concatenation in the Bitcoin scripting language, which was removed in 2010 for security and memory considerations. It enables the construction of more complex trustless Bitcoin infrastructure and is crucial for implementing advanced transaction conditions and functionalities. Fractal introduces OP_CAT to bring more development possibilities to the BTC ecosystem, such as on-chain applications, smart contracts, and more.

Fractal Tokenomics

The fractal Bitcoin mainnet mainly consumes two types of tokens: $FB, which is the general gas, and $SATS, which is the exclusive gas for a certain trading platform.

The total issuance is 210 million coins, and only the tokens produced by mining can circulate after the mainnet goes live. Other tokens have a lock-up mechanism, with private placement locked for six months.

50% - PoW mining, Bitcoin mining machines can directly mine $FB. 15% - Ecosystem Treasury, used to invest in supporting Fractal ecosystem projects. Up to 10% of the total amount can be used each year for 10 years. 15% - Core contributors, used to build and maintain the Fractal core software. All tokens are locked for 7 months and released linearly over 12 months. 10% - Community subsidy for establishing partnerships and liquidity programs. Up to 10% of the total amount can be used each year for 10 years. 5% - Pre-sale, targeting early investors and participants, all tokens are locked for 7 months and released linearly within 12 months. 5% - Consultant, providing strategic advice and support for the project. Up to 20% of the total amount can be used each year for 5 years.

Currently, the authorities have not clearly stated whether there will be airdrop rewards for testnet participants, and if so, they might be distributed from community subsidies or the ecosystem treasury. Although it is unlikely that the 5% for advisors, 10% for community subsidies, and 15% for the ecosystem treasury will be misappropriated by the team for dumping, excluding the 5% allocated to investors, the 50% dedicated to mining has a time cost, and in the short term, the remaining 45% is still under the control of the authorities, which may pose risks.

To ensure transparency, the official allows users to subsequently track the following address to view the fund usage situation:

Ecosystem Treasury (15%):bc1pukzhdkdghqajp3zvwkx65e7uv5zma6lzalet4xauf3p5c0vdg8wqk2avv6 Community Grant (10%):bc1pdrqk5xv3tfpmdsuegnt5a63xucf475r3l0vqg6zulwmtzezg7h6sd2pqx3 Pre-sale (5%):bc1put2rhzx0cwz552epm25dt2rexg2tzx9sws2sjcezsjm9y7h7ct8svhpzf2 Advisor (5%):bc1pm2h0420vmgayhzs59d5nf0mzjlf3q6vrnlpqytefe3rk6a8ku3zq59walm Main contributor ( 15% ):bc1ppvqe8ugt27kgw4trvnzjvcfzn52702tq2ahe7cgzw0jsv67vrhysvgnndz

Fractal Ecosystem Overview

CAT20

The most popular ecological protocol on Fractal is undoubtedly the CAT20 protocol launched by CAT Protocol, which was released in the early morning of September 11, with a total of 21 million tokens. The code shows traces of development by local developers, and specific information about the project has not been disclosed. Although the ambiguity of the code and project information may pose risks, a large number of users have flocked in to participate under the influence of community sentiment and KOL dissemination, causing Gas on the Fractal chain to soar to nearly 7000. The surge in popularity led to the official token FB being speculated at a high price of 40U, reflecting the degree of enthusiasm in the crypto circle for the CAT20 protocol. Interestingly, a certain founder, CAT Protocol, and a certain team staged a drama of true and false Monkey King regarding the CAT20 protocol, with all three parties holding their own views, which just proves the hotness of the protocol.

Compared to the existing Bitcoin protocol, the main innovation of the CAT protocol is the use of the OP_CAT opcode, perfectly adapting to the Fractal ecosystem. Its modular and programmable minting provides flexible and composable rules for complex decentralized applications such as AMM, lending, and staking. Another feature is that transactions are fully verified by miners, reducing reliance on indexers and ensuring that all transactions are directly confirmed by Bitcoin miners, thereby lowering the risk of inconsistency or manipulation by indexers.

As of the time of writing, a certain wallet stated that the CAT20 trading market is under research, with official resources support coming soon. However, the official account of the CAT20 protocol was suddenly frozen, adding uncertainty. In summary, the protocol is still in its early stages, and its feasibility is still open to discussion, requiring further attention to subsequent planning and performance.

BTCTerminal

BtcTerminal is quite popular based on social media attention. Initially, it was a provider of infrastructure for the Runes protocol, but later decided to rename itself to BtcTerminal and integrate into the fractal Bitcoin. After the renaming, it continued to support the related runes while shifting its focus to the broader Bitcoin ecosystem. Currently, it has launched a comprehensive trading market for the fractal Bitcoin ecosystem, where users can check Mint progress, wallet balances, etc., and will support the upcoming Cat721. Recently, the official team launched a mining pool activity where users can rent ASIC mining power to participate in $FB mining, with a total limit of $50,000, but the specific risk and return need to be considered comprehensively.

UniWorlds

UniWorlds is a metaverse project built on Fractal, creating an immersive environment on Fractal, developing community and game toolkits for interoperable virtual worlds, and will launch a BTC ecological game creation platform. UniWorlds is also the first large application on the BTC expansion solution Fractal developed by a certain team. On August 8, it was announced that the seed round investment was completed, led by a certain wallet and a certain platform vendor. UniWorlds has indeed received clear official resource support, and its development with the ecosystem is worth further attention.

BRC20

The BRC20 feature was activated at block 21000, and the on-chain gas has remained high for a long time, which has attracted some attention to Cat20. However, in terms of trading volume and market value, the performance of leading inscription projects is not outstanding, and there are generally situations where startup funds or studios dominate the market. Whether any projects can stand out in the future or continue to remain silent still needs to be tested by the market.

Participant Perspectives: Retail Investors, Miners, and Investments