The Prosperity of the Bitcoin Ecosystem and the Inscription Craze Spark Innovation in Established Projects

The main narrative of the cryptocurrency market in 2023 is shaped by the rise of Bitcoin and the thriving development of the inscription ecosystem. The increase in Bitcoin's price is attributed to multiple factors, including heightened on-chain ecosystem activity, expectations of spot ETF approvals, the approaching halving cycle, and the potential for interest rate cuts by the Federal Reserve. Meanwhile, the massive entry of institutional investors has also provided strong momentum for Bitcoin.

The inscription ecosystem, especially represented by Ordinals, has injected new vitality into the Bitcoin ecosystem with non-fungible tokens (NFT) and fungible tokens (FT), and has also influenced the spread to other public chains. Almost all mainstream public chains have developed their own inscription gameplay, and many old projects have also seized this opportunity to revive.

Bounce: Bitcoin ecosystem project auction and Layer 2 plan

Bounce Finance, as a multi-chain supported Auction-as-a-Service ( protocol, has recently launched several auction events for Bitcoin ecosystem projects. These projects have a low initial valuation, and subsequent auctions can use the tokens from previous projects as participation tools, driving up the prices of related tokens, including Bounce's native token AUCTION.

Taking the recent GoDID project auction as an example, the distribution plan of its token BDID covers multiple groups, including AUCTION holders and early project token holders, reflecting the synergistic effects within the ecosystem.

In addition, Bounce has announced a Layer 2 solution for Bitcoin called BounceBit, which is set to launch in 2024. This move demonstrates Bounce's proactive strategy to expand the Bitcoin ecosystem.

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Uniswap: Expanding to the Bitcoin Sidechain Rootstock

The leading decentralized exchange Uniswap recently deployed its V3 version to the Bitcoin sidechain Rootstock through GFX Labs. This move marks Uniswap's official entry into the Bitcoin ecosystem.

Rootstock is a Bitcoin sidechain that is compatible with the Ethereum Virtual Machine )EVM(, ensuring security through merged mining and introducing a joint guarantor model for managing cross-chain asset transfers. As of December 19, the liquidity on Oku has reached $535,000.

Magic Eden: Entering the Bitcoin NFT Market

Originally focused on the Solana ecosystem, the NFT marketplace Magic Eden announced in March of this year its expansion into the Bitcoin ecosystem, aligning with the rising trend of Ordinals NFTs. Currently, NFTs in the Bitcoin ecosystem, such as bitmap and Bitcoin Frogs, have seen significant trading volumes on the Magic Eden platform, highlighting its strategic vision in the multi-chain NFT market.

Nostr: Social Protocol Introduces Lightning Network Payments

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

The operation mechanism of Zaps involves multiple steps, including request initiation, public key confirmation, invoice generation, and so on. Currently, the number of payments made with Zap has exceeded 50,000, demonstrating good user acceptance.

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ALEX: BRC20 Trading Platform and Bitcoin Oracle

ALEX was originally a DeFi platform on Stacks, and during the inscription craze, it developed a decentralized exchange called B20 specifically for BRC20 token trading. The platform allows the use of sUSDT as the base currency for BRC20 token trading.

In addition, ALEX also plans to launch the first Bitcoin oracle for BRC20 tokens. This project aims to leverage the programmability of Stacks to achieve decentralized consensus for BRC20 indexing, referred to as "the indexer of indexers".

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Development of Inscription Ecosystems on Various Public Chains

The inscription technology has expanded to over 30 public chains, including Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, and more. However, the launch of some inscription projects has also sparked controversy, such as the minting process of INJS on Injective, which has caused dissatisfaction in the community due to fee issues.

For smart contract chains, inscription technology may bring lower transaction costs, but it may also introduce new security risks and functional limitations. Taking Ethscriptions on Ethereum as an example, while it may reduce transaction fees, it may face challenges when handling complex data structures or logic.

Summary

The prosperity of the Bitcoin ecosystem has driven innovation in multiple projects: Bounce has launched a unique auction model and plans to develop Layer 2; Nostr combines social media with micro-payments; ALEX is developing a BRC20 trading market and planning a Bitcoin oracle; Uniswap and Magic Eden have expanded their businesses to the Bitcoin ecosystem.

The application of inscription technology on major public chains has its own characteristics. For non-smart contract chains like Bitcoin, inscriptions provide a new way of asset issuance; while for smart contract chains like Ethereum, although inscriptions may reduce certain costs, they may not be as flexible in terms of functionality and security compared to traditional smart contracts.

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