TL;DR

Forward the Original Title ‘「CN」ABCDE: Why We Invest in UTXO Stack’

UTXO Stack led by ABCDE can technically assist project developers in one-click issuance of BTC Layer2 based on the UTXO architecture, while seamlessly integrating the capabilities of the RGB++ protocol. In terms of security, it combines restaking BTC, CKB, and BTC L1 assets to ensure Layer2 security.

In simple terms, UTXO Stack is like the ‘OP Stack + EigenLayer’ of the Bitcoin ecosystem.

1. The Battle of BTC Layer2 and RGB++

To explain UTXO Stack thoroughly, it’s impossible to bypass RGB++.

Currently, there are over 20 BTC Layer2 solutions on the market, but the vast majority of them are EVM-based solutions. Essentially, they use ETH’s technical stack and bridges to address BTC’s scalability issues. Although this approach can quickly establish an ecosystem in the short term, in the long term, these solutions lack strong ties to security with the BTC main chain and heavily rely on bridges. Secondly, ideologically, using ETH’s account model and EVM virtual machine to scale UTXO’s BTC seems somewhat insufficiently “Bitcoin Native”.

Solutions with high security and linkage to BTC L1, which are sufficiently BTC Native, have not been able to achieve ideal results for years, such as the Lightning Network, which also has the inherent shortcoming of not supporting smart contracts for scalability. Solutions like Taproot, RGB, and others based on client-side validation paradigms also face challenges such as long implementation times and slow technical progress. This is also the main reason why current EVM scalability solutions are so popular.

After years of deep cultivation in the public chain field, Nervos leverages the natural structural advantages of being POW+UTXO, shared with BTC, and innovative “Universal Isomorphic Binding” technology to seamlessly migrate the client-side validation paradigm of RGB to CKB, naming it RGB++. Sacrificing a small amount of privacy in exchange for significant functionality and flexibility expansion, with security tightly linked to BTC L1. More importantly, RGB++ has just been truly implemented a few days ago! This means that it is no longer a narrative of scalability stuck in concepts or development, but a tangible product ready to build ecosystems and solutions.

If terms like client-side validation and Universal Isomorphic Binding seem too abstract, the following analogy can be used to understand RGB++ better — a user initiates a transaction on BTC L1 to trigger asset transactions belonging to that user on CKB via RGB++. When this transaction is completed on CKB, it is then written back to BTC L1 as a commitment.

You might be wondering — hasn’t this saved gas fees? Users still have to initiate transactions on BTC L1, still have to pay gas fees on BTC, and now have to add gas fees on the CKB side too. It seems even more expensive, doesn’t it?

Actually, no, there are four benefits:

• RGB++ serves as an asset issuance protocol, giving BTC L1 the ability to issue new RGB assets (think of Merlin’s BRC420).
• RGB++ asset transactions on CKB are Turing complete and programmable.
• You can wait for multiple RGB++ transfers to complete before sending a summary commitment to Bitcoin L1, known as “transaction folding,” which feels a lot like Rollup and saves a lot of gas fees.
• Not only can RGB++ assets be mapped to CKB, but assets with UTXO characteristics such as Atomical, Rune, etc., can also be mapped to CKB for Turing complete transactions.

Because only UTXOs on Bitcoin L1 can operate or update RGB++ UTXOs, in RGB++, CKB has become BTC’s “execution + DA” layer, and BTC L1 has become the true “settlement layer,” something that any current EVM and non-EVM BTC scalability solution cannot achieve.

If you still find this solution not fast enough or the fees not low enough, what can be done? After all, transactions on BTC L1 are still inevitable, and CKB, as a POW L1, has a maximum TPS of only a few hundred. Is there a more flexible and faster scalability solution, like… Appchains in the ETH ecosystem?

Hence, we have UTXO Stack, an BTC and RGB++ based “OP Stack”.

2. UTXO Stack — BTC’s OP Stack + EigenLayer

If you are familiar with OP Stack, the Rollup as a Service (RAAS) protocol stack, understanding UTXO should be straightforward.

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

• UTXO model, ultra-high TPS (UTXO inherently supports parallel processing), and extremely low gas fees.
• POS mechanism, with security provided by the BTC/CKB restaked (similar to EigenLayer).
• Asset protocol adopts RGB++, and due to the existence of isomorphic binding technology, assets can freely “jump” between Appchains/CKB/BTC without the need for cross-chain bridges.
• Can reuse the CKB smart contract stack.
• Can reuse BTC wallets (users are unaware of CKB as a chain).

Finally, we have native Bitcoin-based, UTXO-based chain issuance infrastructure. This infrastructure also integrates the Restaking concept proposed by EigenLayer, empowering BTC and CKB while providing strong support for the bootstrapping and security of Appchains.

It is foreseeable that in the near future, BTC EVM Layer2 and BTC UTXO Layer2 will engage in a positive confrontation on multiple levels, including technology, ecosystem, and even ideology.

From the formal proposal of RGB++ in February to its implementation in April, it took less than two months, demonstrating the team’s extremely strong engineering capabilities. The launch of UTXO Stack alongside the implementation of RGB++ not only offers more diverse possibilities for asset issuance and gameplay within the BTC ecosystem but also remains true to the Bitcoin Native ethos. We believe that together with UTXO Stack, we will propel the Bitcoin ecosystem towards a brighter and more prosperous future.

About ABCDE

ABCDE is a VC focused on leading investment in top Crypto Builders. It was co-founded by Huobi Cofounder Du Jun and former Internet and Crypto entrepreneur BMAN，who both have been in the Crypto industry for more than 10 years. The co-founders of ABCDE have built multi-billion dollar companies in the Crypto industry from the ground up, including listed companies(1611.HK), exchanges(Huobi), SAAS companies(ChainUP.com), media(CoinTime.com), and developers platforms(BeWater.xyz).

Twitter：https://twitter.com/ABCDLabs

Website：www.ABCDE.com

Disclaimer：

1. This article is reprinted from [Medium]. Forward the Original Title ‘「CN」ABCDE: Why We Invest in UTXO Stack’.All copyrights belong to the original author [ABCDE]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
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