Bitcoin Ecosystem and Inscription Trend: The Innovation Path of Established Projects

Recently, the focus in the cryptocurrency space has been on the rise of Bitcoin and the booming development of the inscription ecosystem. The increase in Bitcoin's price is influenced by multiple factors, including increased on-chain activity, expectations for the approval of a spot ETF, the upcoming halving cycle, and the potential for the Federal Reserve to cut interest rates. At the same time, the active entry of institutional investors has also provided strong momentum for Bitcoin.

The inscription technology, especially the non-fungible and fungible token systems represented by Ordinals, has not only injected new vitality into the Bitcoin ecosystem but also influenced other public chains. Many leading public chains have developed their own inscription applications, and some established projects have also seized this opportunity to rejuvenate.

Bounce: Bitcoin Ecosystem Project Auction and Layer 2 Plan

Bounce Finance, as a multi-chain supported auction-as-a-service platform, has recently launched several auction activities for Bitcoin ecological projects. These projects have a low initial valuation, but as the auction progresses, the early project tokens can be used as participation tools for subsequent auctions, facilitating positive interaction between projects. Bounce's native token AUCTION has also performed excellently in this process.

Taking the GoDID project as an example, the allocation plan for its token BDID fully utilizes the platform ecosystem, including rewards for AUCTION holders and early project participants, reflecting the synergy within the ecosystem.

In addition, Bounce also announced the BounceBit project, which is a Bitcoin Layer 2 solution based on Binance Bitcoin BTCB and AUCTION, expected to launch in 2024.

Uniswap: Entering the Bitcoin Sidechain

The well-known decentralized exchange Uniswap has recently deployed its V3 version to the Bitcoin sidechain Rootstock via Oku. This move marks Uniswap's expansion into the Bitcoin ecosystem. Oku is a trading frontend based on Uniswap V3, providing features such as an order book and price charts, developed by GFX Labs and funded by the Uniswap Foundation.

Rootstock, as a Bitcoin sidechain compatible with the Ethereum Virtual Machine, ensures security through merged mining and introduces a joint guarantor model to manage cross-chain asset transfers. As of December 19, the liquidity on Oku has reached $535,000.

Magic Eden: Expanding to the Bitcoin NFT Market

Originally focused on the Solana ecosystem, the NFT marketplace Magic Eden announced in March this year its entry into the Bitcoin ecosystem, in line with the rising trend of Ordinals NFTs. Currently, several Bitcoin ecosystem NFT projects such as bitmap and Bitcoin Frogs have shown impressive trading volumes on the Magic Eden platform.

Nostr: Social Protocol Combined with Lightning Network Payments

The decentralized social protocol Nostr underwent the NIP-57 upgrade in September this year, introducing a micro-payment feature called "Zaps." This feature allows users to make quick, low-cost tips or payments through the Nostr client, primarily relying on the Lightning Network.

The payment process design of Zaps is simple and efficient, allowing users to easily complete the entire process from initiating a request to completing the payment. As of now, the number of payments made through Zaps has exceeded 50,000.

ALEX: BRC20 Trading and Bitcoin Oracle

ALEX, as the main DeFi platform on Stacks, has recently developed a decentralized exchange called B20 specifically for BRC20 token trading. This platform allows users to trade BRC20 tokens using sUSDT (the USDT bridged from the BNB chain to Stacks) as the base currency.

In addition, ALEX is developing the first Bitcoin oracle for BRC20 tokens. This project aims to utilize the programmability of Stacks to achieve decentralized consensus for BRC20 indexing, referred to as "the indexer of indexers." The goal of this oracle is to verify each BRC20 event and update the global balance in the on-chain contract.

The Application of Inscription Technology on Various Public Chains

The inscription technology has also been widely applied on public chains outside of Bitcoin, with more than 30 public chains having released or preparing to release inscription projects. For example, Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, etc. However, the process of minting inscriptions has also posed challenges for some networks, such as Arbitrum, TON, and IOST, which have experienced brief downtimes.

On smart contract chains, inscription technology may have lower transaction costs compared to traditional smart contracts, but it may also face limitations in security and functional flexibility.

Conclusion

The development of the Bitcoin ecosystem has spawned multiple innovative projects. Bounce has created significant economic benefits through a unique auction model; Nostr combines decentralized social networking with micro-payments; ALEX has developed a BRC20 trading market and plans to launch a decentralized Bitcoin oracle; Uniswap and Magic Eden have expanded their business into the Bitcoin ecosystem.

The widespread application of inscription technology on major public chains has brought a new asset issuance method to non-smart contract chains like Bitcoin, while also providing a potential low-cost trading option on smart contract chains; however, its security and functionality still need further verification.