Why we invested in UTXO Stack

Author: Lao Bai;; Source: X@Wuhuoqiu

UTXO Stack, led by ABCDE, can technically help project developers issue BTC Layer2 based on UTXO architecture with one click, and natively integrate RGB++ protocol capabilities. In terms of security, it combines staking BTC, CKB and BTC L1 assets to ensure the security of Layer2.

In short, UTXO Stack is the "OP Stack + EigenLayer" of the Bitcoin ecosystem.

1. BTC Layer2 dispute and RGB++

If you want to explain UTXO Stack clearly, you can't avoid RGB++.

There are more than 20 BTC Layer2 on the market, but most of them are EVM solutions, which basically use ETH's technology stack + bridge to solve BTC's expansion problem. Although the ecosystem can be quickly built in the short term, in the long run, this solution has no strong binding relationship with the BTC main chain in terms of security, and is heavily dependent on the bridge. Secondly, it is ideologically using ETH's Account model and EVM virtual machine to expand the capacity of UTXO's BTC, which seems somewhat not "Bitcoin Native".

While the security is highly correlated with BTC L1, and the solution is sufficiently BTC Native, the Lightning Network has not achieved the desired effect after years of operation, and has a natural expansion shortcoming of not being able to support smart contracts. Solutions of client verification paradigms such as Taproot and RGB also have many problems such as long landing time and slow technological progress. This is also the main reason why the current EVM expansion solution is popular.

Nervos, which has been deeply involved in the public chain field for many years, uses the natural structural advantages of POW+UTXO like BTC + innovative "isomorphic mapping" technology to "seamlessly move" the client verification paradigm of RGB to CKB, named RGB++. It sacrifices a little privacy in exchange for a great expansion of functionality and flexibility, and its security is strongly bound to BTC L1. More importantly, RGB++ was actually launched a few days ago! This means that this is no longer a narrative of expansion that remains at the conceptual or development level, but a product that can actually start to build an ecosystem and solutions.

If the above terms like client verification and isomorphic binding are still too abstract, then the following approximate analogy can be used to understand RGB++ - A user initiates a transaction on BTC L1 to trigger the RGB++ asset transaction belonging to the user on CKB. When this transaction is completed on CKB, it is written back to the previous Commitment on BTC L1. You may be wondering - this doesn’t save the Gas fee, right? Users still have to initiate transactions on BTC L1 and still have to pay the Gas fee on BTC. Now they have to add the Gas fee on CKB. It feels more expensive, right?

Actually, it is not. There are four benefits:

1. RGB++, as an asset issuance protocol, enables BTC L1 to have the ability to issue new RGB assets (think of Merlin's BRC420)

2. RGB++ asset transactions on CKB are completely Turing complete and programmable

3. You can wait for multiple RGB++ transfers to be completed, and then aggregate and send a Commitment to Bitcoin L1. This is called "transaction folding", which is very Rollup-like, and saves a lot of Gas fees 

4. Not only RGB++ assets can be mapped to CKB, but Atomical, Rune and other assets with UTXO characteristics can also be mapped to CKB for Turing complete transactions

What if you think this solution is not fast enough and the fee is not low enough? After all, transactions on BTC L1 are still inevitable, and the maximum TPS of CKB as a POW L1 is only a few hundred. Is there a more flexible and fast expansion solution, like... Appchain in the ETH ecosystem?

So we have UTXO Stack, the "OP Stack" based on BTC and RGB++.

2. UTXO Stack - BTC's OP Stack+EigenLayer

If you are familiar with OP Stack and RAAS (Rollup as a Service) protocol stack, UTXO should be very easy for you to understand.

With UTXO Stack, you can issue BTC's isomorphic UTXO Appchain with one click, and these Appchains have the following features:

1. UTXO model, ultra-high TPS (UTXO inherently comes with parallel processing), ultra-low Gas fee

2. POS mechanism, security is provided by BTC/CKB pledged on BTC (similar to EigenLayer)

3. The asset protocol adopts RGB++. Due to the existence of isomorphic mapping technology, assets can jump arbitrarily between Appchain/CKB/BTC without cross-chain bridge

4.  The CKB smart contract stack can be reused

5. 

   

   Finally, we have a Bitcoin-native, UTXO-based chain infrastructure. This infrastructure also integrates the Restaking concept proposed by EigenLayer, which not only empowers BTC and CKB better, but also ensures the cold start and security of Appchain.

   It is foreseeable that in the near future, BTC EVM layer2 and BTC UTXO layer2 will engage in a round of direct confrontation on multiple levels, including technology, ecology, and even ideology.  

   RGB++ was officially proposed in February and landed in April, which took less than two months, demonstrating the team's extremely strong engineering capabilities. UTXO Stack was launched at the same time as RGB++ landed, giving BTC ecosystem asset issuance and gameplay more diverse + Bitcoin Native possibilities. We believe and work with UTXO Stack to push the Bitcoin ecosystem into a better and more prosperous future.