Crypto industry attention has picked up steam as 2023 comes to an end. Amidst the excitement, we’ve seen one standout crypto sector on the minds of many in our space – Bitcoin metaprotocols.
Since its inception in 2009, Bitcoin as a blockchain has remained fairly stagnant. Bitcoin stuck to its primary use case as ultrasound money and a digitally-native store of value. However, due to the lack of programmability on Bitcoin, a lot of the attention in the crypto space has shifted to other blockchains like Ethereum, Solana and Avalanche.
However, things began to change in 2021 when the Taproot Upgrade went live. The general purpose of the Taproot Upgrade was to make the Bitcoin blockchain more efficient by reducing the cost and increasing the speed of transactions. This was done by batching multiple signatures and transactions together to make the chain faster.
The Taproot Upgrade allowed for inscriptions. Inscriptions are like serial numbers inscribed onto a satoshi, the smallest currency unit of Bitcoin. This serial number along with other data is inserted into part of a Bitcoin transaction that subsequently gives rise to what we know today as Bitcoin metaprotocols.
Without Ordinals, the sector for Bitcoin metaprotocols would be non-existent.
Ordinals was one of the first protocols to identify the possibilities with inscriptions. They used inscriptions as a way to emulate the popular token standards we see in Ethereum.
Ordinals gained momentum in early 2023 when Ordinal inscriptions were used to create Bitcoin NFTs. At one point, Bitcoin NFTs from Ordinal inscriptions were responsible for up to 90% of the Bitcoin blockspace.
Then it went viral. Eventually, experimentation began and people started to look at what else could be done with Ordinals other than NFTs.
What they landed on was BRC-20 tokens.
BRC-20 tokens are like a version of Ethereum ERC-20 tokens on Bitcoin. These are fungible tokens made by protocols running on the Bitcoin network. This was something new for Bitcoin and everyone in the crypto space took notice.
A fungible token standard is something that most crypto users are familiar with, so it’s a no-brainer that they gained traction. At the time of writing, BRC-20 tokens have a collective market cap over $1 billion.
Trac is a metaprotocol that allows users to create new products within ordinals through their API.
In addition to this, they have developed an indexer and tracker which enables tracking of everything Ordinal related. This means any form of data that a user or developer requires, they can get through the Trac API.
Trac was in the first batch of metaprotocols to launch on Ordinals and has since gone on to become one of the biggest in the sector.
PIPE (by Trac) is an attempt to emulate what Ordinals did with BRC-20. They have their own protocol for creating tokens. The Pipe protocol itself consists of three functions. Deployment, mint, and transfer.
As the name suggests, users can deploy their own tokens through Pipe. Users can create fair mints, simply mint tokens or NFTs of other projects, and also transfer said tokens with ease.
With the amount of traction we see with Ordinals and BRC-2, it’s natural to expect competition would emerge.
Another Ordinals competitor is Stamps. Much like Ordinals, Stamps uses inscription to allow for the creation of Stamp NFTs and SRC-20s. However, the way Stamps work behind the scenes is very different from Ordinals.
The main difference with Stamps is that it allows for direct storage of data such as texts or images using UTXO (Unspent Transaction Output). UTXOs are the individual units of currency that are created and held as a result of previous transactions on the Bitcoin blockchain.
Using UTXO’s allows for permanent storage of data on the blockchain which is impossible to prune.
Cybord is a protocol that is built on Ordinals and aims to make the BRC-20 token standard more efficient.
Ord 0.10+ introduced the new fields for ‘metadata’ & ‘metaprotocol’. This allowed Cybord to create CBRC-20s which kept the same functional logic of the BRC-20 metaprotocol while reducing the cost of each inscription.
The general premise is that if Ordinals are to continue growing, then they need to be cheaper and more efficient to appeal to a wider audience.
There are many more projects, protocols, and tokens to talk about in this sector, but that is beyond the scope of this article. The aforementioned protocols provide a general overview of the Bitcoin metaprotocol sector.
So, where does Botanix fit into the mix with regard to metaprotocols?
Bitcoin metaprotocols have shown us that strong demand exists to use protocols natively deployed on Bitcoin. Bitcoin is safe, more decentralized, and stress-tested but it lacks a robust app ecosystem. Now that applications are starting to arrive and gain traction, activity on the Bitcoin network is picking up.
The problem with metaprotocols is that they run natively on the Bitcoin mainnet.
So, why is that a problem? As mentioned previously, Bitcoin was not designed as a blockchain that can handle programmability. The Bitcoin blockchain produces blocks about every 10 minutes. This means it takes a long time for transactions to get finalized and makes block space limited as a function of time.
If too many people are using metaprotocols and clogging up the main chain, not only will it take ages to have a transaction included in the next block, it will be prohibitively expensive with gas fees. We’re already starting to see this play out.
The likelihood of achieving consensus for major changes to the Bitcoin blockchain (mainnet/L1) is slim to none. Thus, the only real way to enable decentralized applications on Bitcoin is through layer 2 protocols.
Botanix is the solution for a Bitcoin native application ecosystem.
Botanix is a proof-of-stake (PoS) Layer 2 built on top of Bitcoin which is EVM-equivalent. Botanix will empower a whole new generation of developers with the familiarity of the experience of working with Solidity smart contracts on Ethereum and other EVM-based protocols.
The majority of web3 developers are very familiar with Solidity and thus will be familiar with the Botanix EVM on day one - making it super easy to port over their dapps in a copy-and-paste manner to Botanix.
Similarly, users will discover a familiar EVM experience on Botanix, accessing dapps on Bitcoin through popular web3 wallets like Metamask.
But, Botanix is not just another L2 EVM. Botanix settles transactions on Bitcoin - the most secure and decentralized blockchain on the planet at scale.
Thus, Botanix serves as the infrastructure for the next era of growth on the Bitcoin network.