Exploring the New Favorite of Bitcoin: The Rise and Challenges of Fractal

Since September, with the community craze sparked by Fractal, the market focus has returned to the entire Bitcoin ecosystem. A large number of users participated in the related assets and gameplay launched by Fractal, resulting in persistently high on-chain gas fees. The significant hype around Fractal can be attributed to several reasons: first, the overall market is currently sluggish and lacks fresh narratives; second, based on the previous generous airdrops from a certain trading platform, many users are placing high importance on Fractal's launch, leading to extreme competition even during the testnet phase, with an estimated tens of millions of addresses participating in the corresponding testnet tasks; finally, the high return expectations brought by asset protocols such as Cat20, as the profit effect continues to ferment, Fractal's popularity keeps rising.

In addition, the hunger marketing strategy of a certain trading platform has also played a role in promoting the situation. The originally small circulating supply of FB airdrops has seen prices soar as on-chain competition intensifies, becoming a "golden shovel" to some extent, which in turn accelerates the development of Fractal.

Based on the above reasons, it is particularly necessary to analyze Fractal in depth.

Fractal Overview: The Native Solution for Bitcoin Scaling

Fractal is a solution for Bitcoin scaling, implemented through recursive expansion of infinite layers 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 Bitcoin mainnet. While maintaining orthodoxy, Fractal aims to enhance transaction efficiency by accelerating block generation speed and increasing block capacity. Its operation includes complete compatibility with the Bitcoin mainnet, allowing users to trade on the Fractal network and interact or synchronize with the Bitcoin mainnet, while providing faster transaction confirmation times such as a 30-second block time and a block capacity that is 20 times larger than that of the Bitcoin mainnet.

As a native expansion solution, Fractal can start from the Bitcoin main chain to achieve secure asset transfers across various layers. Bitcoin and assets such as BRC-20 and Ordinals can be bridged through a decentralized bridge. The underlying mechanism adopts a dynamic replacement rotating MPC signature mechanism, while also considering the specific aspects of the BRC-20 standard.

Fractal is functionally more similar to the Bitcoin testnet, allowing for early support of some features not yet activated on the mainnet. It serves as an experimental ground, providing better user experience and performance optimization, making it very suitable for thorough experimentation and innovation for complex applications. At the same time, it allows users to participate and provide feedback in a real interactive environment, similar to the significance of Layer 2 networks on Ethereum.

Investment and Financing: Development Momentum from Strong Partnerships

The Fractal network was developed in collaboration with a trading platform and Block Space Force. As the main developer and promoter, the trading platform is a leading Bitcoin wallet, with over 900,000 active users weekly. It has raised undisclosed amounts in five rounds of financing, two of which were led by the trading platform, with participation from 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 rich experience in exiting at USD A9 and investing in 100x projects, as well as developing the most widely used blockchain applications globally. Overall, among the two project parties, the resource advantages of a certain trading platform are more prominent, as it has attracted a large number of loyal users through its successful brand structure and previous generous airdrops, providing the best endorsement for Fractal.

With the support of resources from both project parties, Fractal implemented a series of strategic plans to initiate user and developer participation. After the mainnet launch, Fractal distributed 1 million FB tokens to over 100,000 eligible addresses from a certain trading platform and a certain wallet, and launched various developer resource funding programs, demonstrating Fractal's ambition for its ecosystem development.

Fractal Highlights: Advantages Revealed

The main highlight of Fractal lies in its performance optimization and improvements based on the Bitcoin mainnet, as well as the related asset issuance methods and ecological applications introduced. It can be vividly said that Fractal is like using the "old bottle" of Bitcoin mainnet resources to contain the "new wine" of the brand new asset issuance methods. Specifically speaking:

The overall design of Fractal allows Bitcoin and assets such as BRC-20 and Ordinals to be bridged through a decentralized bridge. Transactions made by users on the Fractal network will then interact or synchronize with the Bitcoin mainnet, providing faster transaction confirmation times and larger block capacity compared to 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 levels of expansion on the Bitcoin main chain, forming a tree structure. This design allows each layer to further fork, increasing the network's parallel processing capacity. Each layer can independently handle transactions and dynamically adjust the number of layers as needed. During peak transaction times, it can quickly increase levels to handle more transactions, allowing the network to flexibly respond to various loads.

This is similar to how other L2s and sidechains build an additional highway, while Fractal can build countless highways parallel to the Bitcoin mainnet. Each highway can be used to expand the Bitcoin mainnet or to expand another highway. This way, each highway has its own unique value orientation, and users can solve congestion issues without needing to change their mode of transport.

![Exploring the New Favorite of BTC: Is Fractal an Ecological Revolution or a Follower?])https://img-cdn.gateio.im/webp-social/moments-25447cbfc1a60ccb13745d296d455bc1.webp(

) Cadence Mining (

Fractal adopts the same PoW consensus mechanism as Bitcoin, which means BTC miners can seamlessly transition to Fractal block mining using their existing ASICs, GPUs, and other hardware, achieving a win-win situation by enhancing efficiency through shared workload, thus providing Bitcoin miners with additional economic benefits.

The mining method of Fractal is divided into permissionless and merged mining. In every three blocks, two are generated through permissionless mining, and one is generated through merged mining. Permissionless mining allows anyone with the appropriate tools to mine Fractal blocks, and anyone can participate in the network by downloading software and running a node. Merged mining is specifically aimed at BTC miners, allowing miners to mine BTC blocks and Fractal blocks simultaneously without the need for additional computing power.

) OP_CAT

OP_CAT is an opcode in the Bitcoin scripting language, originally used for concatenating two elements into a string. However, due to concerns about security and memory usage, it was removed in 2010, as it could lead to excessive memory consumption in scripts, creating very large stack values from small inputs. Its benefit lies in the ability to script the construction of more complex and trustless Bitcoin infrastructure, which is crucial for implementing advanced transaction conditions and features. The introduction of OP_CAT by Fractal can bring more development possibilities to the BTC ecosystem, such as on-chain applications, smart contracts, and more.

![Exploring the new favorite of BTC: Is Fractal an ecological revolution or a follower?]###https://img-cdn.gateio.im/webp-social/moments-1686b51d2ee16e9d7c7eac350063e6b8.webp(

Fractal Token Economics

The Fractal mainnet primarily consumes two types of tokens, namely $FB and $SATS, with the former serving as a universal gas and the latter as the exclusive gas for a specific trading platform.

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

50% - PoW mining, Bitcoin miners can directly mine $FB.

Estimated Proof of Work Mining Schedule:

• 15% - Ecosystem Treasury, used for investment and support of Fractal ecosystem projects. Up to 10% of the total pool can be used each year for 10 years.
• 15% - Core Contributors, the core contributors who build and maintain the Fractal core software. All tokens are locked for 7 months and will be released linearly until 12 months.
• 10% - Community subsidy, establish partnerships and liquidity programs. Up to 10% of the total pool can be used annually for 10 years.
• 5% - Pre-sale, aimed at early investors and network participants, all tokens are locked for 7 months and will be released linearly until 12 months.
• 5% - Advisor, a person who provides strategic advice and support for the project. Within 5 years, up to 20% of the total pool can be used each year.

Currently, the official has not explicitly stated whether there will be airdrop rewards for users participating in the test network, but it may possibly be conducted through community subsidies or the ecosystem treasury. Although the 5% for consultants, 10% for community subsidies, and 15% for the ecosystem treasury are unlikely to be misappropriated by the team for dumping, excluding the 5% for investors, the 50% allocated for mining will incur time costs, and the remaining 45% will still be controlled by the official in the short term, which may pose risks.

To ensure complete transparency, the official allows users to track the following official addresses to view fund usage:

• Ecosystem Treasury )15%###:bc1pukzhdkdghqajp3zvwkx65e7uv5zma6lzalet4xauf3p5c0vdg8wqk2avv6
• Community Grant (10%):bc1pdrqk5xv3tfpmdsuegnt5a63xucf475r3l0vqg6zulwmtzezg7h6sd2pqx3
• Presale ###5%(:bc1put2rhzx0cwz552epm25dt2rexg2tzx9sws2sjcezsjm9y7h7ct8svhpzf2
• Consultant)5%(:bc1pm2h0420vmgayhzs59d5nf0mzjlf3q6vrnlpqytefe3rk6a8ku3zq59walm
• Main Contributor )15% (:bc1ppvqe8ugt27kgw4trvnzjvcfzn52702tq2ahe7cgzw0jsv67vrhysvgnndz

![Exploring the new favorite of BTC: Is Fractal an ecological revolution or a follower?])https://img-cdn.gateio.im/webp-social/moments-171113404f3dd01032f937984fa6c8c2.webp(

Fractal Ecological Overview

) CAT 20

The current hottest ecological protocol in Fractal is undoubtedly the CAT20 protocol launched by CAT Protocol, which was released in the early hours of September 11, with a total of 21 million. Its code shows traces of development by Chinese individuals, and specific information about the project has not been disclosed. Although the ambiguity of the code and the project parties may pose risks, the surge in community sentiment and the dissemination by major opinion leaders have led to a massive influx of users minting, causing Gas on the Fractal chain to soar, peaking at nearly 7000. The extremely high enthusiasm led to the official token FB being speculated to a price of 40U at one point, demonstrating the level of enthusiasm the entire crypto circle has for the CAT20 protocol.

Comparing the CAT protocol with the existing Bitcoin protocol, we find that one of its major innovations is the use of the OP_CAT opcode, which perfectly fits the ecosystem of Fractal. Its modular and programmable minting provides flexible and composable rules for complex decentralized applications such as AMM, lending, and staking. Another prominent feature is that its transactions are fully verified by miners, reducing reliance on indexers. Unlike token standards that may depend on external or third-party verification, CAT20 ensures that all transactions are directly confirmed by Bitcoin miners, making the protocol itself less susceptible to inconsistencies or manipulation by indexers.

As of the time of writing, a certain trading platform stated that the CAT20 trading market is under research, and official resource support is on the way. However, the official social media account of the CAT20 protocol has suddenly been frozen, which seems to add uncertainty. In short, since the protocol is still in its early stages, there are still many issues regarding its feasibility that need to be discussed further, requiring attention to specific plans and performance in the future.

( BTCTerminal

BTCTerminal from social media follower count and influencer attention