Original author: OKX Ventures

Bitcoin Ecological Data Review

Macroscopically, as the cornerstone of Crypto, Bitcoin has formed a strong consensus on value, including ETF, halving, and macro liquidity. Microscopically, the number of Bitcoin on-chain addresses and users is growing rapidly, and BTC Dominance remains stable.

• Firstly, the cumulative number of Bitcoin addresses has exceeded 1.2 billion. The number of global cryptocurrency users has exceeded 420 million, which has rapidly grown from 5 million users in 2016. According to tokenterminal, the monthly active users of Bitcoin are about 13.7 million, and the on-chain transfer data is 17.5 million. In terms of the growth of on-chain data, the size of Bitcoin's blockchain is approximately 507GB, which has increased by 70% compared to three years ago. All of these reflect the explosive growth in the usage of cryptocurrency, especially Bitcoin.

Source: glassnode

Source: tokenterminal

•  Secondly, Bitcoin Dominance continues to remain high, and is still the cornerstone of the cryptocurrency market. Bitcoin accounts for 47% of the total market value of cryptocurrencies. Although this proportion will fluctuate with the rise of other cryptocurrencies, Bitcoin still maintains its position as the market leader.

Source: coingecko

Source: delphidigital

•  Third, halving benefits: When the mining output is halved, the new Bitcoin supply speed slows down, and if demand remains unchanged or increases, theoretically, the price should rise. Under this mechanism, halving is seen as a potential value catalyst.

￮  Bitcoin's YTD price has risen by over 150% in 2023, and the market's optimism towards Bitcoin is already reflected in its price. The upward trend since the halving in April 2024 may continue, or even accelerate.

￮  From historical data, Bitcoin has achieved an average return of over 400% in the 12 months following the first two halvings. This provides a historical precedent for observing and predicting future trends, and provides investors with a certain degree of confidence.

•  Fourth, Bitcoin Spot ETF : makes its volatility gradually more similar to traditional financial markets. In addition, financial institutions such as Blackrock's support, Bitcoin Spot ETF is seen as a recognition of Bitcoin. It is expected to attract new capital that was previously cautious about the cryptocurrency market. Previously, some media believed that the ETF is expected to bring billions of dollars in incremental funds to BTC in the next year.

￮  Reference to the gold ETF, the first gold ETF launched in the United States in November 2004 - SPDR Gold Shares (GLD), accumulated over $1 billion in assets in just three days. In its first year of establishment, GLD's assets under management (AUM) soared to over $3 billion. As of 2023, the global gold ETF's assets under management are approximately $150 billion, indicating that these investment tools have had a profound long-term impact on the gold market.

￮  In addition, macro-level liquidity changes such as the Federal Reserve's balance sheet changes and changes in the US Treasury market are potential positives for the cryptocurrency market in 2024. The Fed's liquidity support may be the main driving force behind Bitcoin and the entire cryptocurrency asset market in 2024.

BTC ecosystem's technological innovation and the development trend of layer 2

未来一年更值得关注的技术创新

The technology innovations worth paying attention to in the coming year

1. Asset issuance agreements may lead innovation:

￮  Ordinals: Using the smallest unit of Bitcoin, sats, to create unique NFTs; currently, the top inscriptions in the market have reached a certain consensus; there are risks of network congestion and centralization.

￮  RGB: Expanded colored coins and Lightning Network, optimized for privacy and scalability.

￮  Taproot Assets: Based on the Taproot protocol activated in 2021, it enhances the privacy and efficiency of smart contracts; combined with the Lightning Network, it improves the process and speed of asset issuance and transfer.

2.  BitVM: Turing-complete virtual machine:

￮  Concept: Achieving complex smart contract verification without changing the foundation of Bitcoin consensus; the working principle is off-chain computation and on-chain verification.

￮  Advantages: Enhances programmability without the need to modify Bitcoin core rules; reduces on-chain data burden; increases fraud protection.

￮  Limitation: Only supports two-party contracts; theoretical practicality needs to be tested, and implementation may face performance and cost challenges.

￮  The resurrection of OP_CAT: The potential recovery of this opcode may provide additional adaptability and efficiency for BitVM.

3.  Development of Bitcoin Covenants:

￮  Core Value: Allows additional conditional restrictions to be added when creating UTXOs, increasing the diversity and security of smart contracts.

B^2 Network

￮   High degree of freedom: Anyone can use the BRC-420 protocol to create their own metaverse inscriptions.

￮   Composability: This protocol is designed to integrate with Bitcoin layer 2 solutions, bringing liquidity and scalability to the second layer.

￮   Innovative narrative approach: Introducing a novel "bitmap protocol" for the land of the metaverse, not limited to a single NFT form, but using it to tell a broader story of the metaverse.

￮   Clear positioning: Bitmap is positioned as a metaverse protocol and NFT market on Bitcoin, supporting inscriptions based on the BRC-420 protocol, and planning to integrate liquidity mechanisms through layer 2 in the future.

￮   Experienced team: The CEO has a rich entrepreneurial history in web2, VR, and web3 development engines.

￮   Attractive product: BRC-420. The market already has derivatives and active communities, and the high price of low-priced goods indicates strong user interest and involvement of whale participants.

￮   Operational Momentum: The clear market FOMO surrounding Bitmap NFTs, significant whale participation, and highlighted partnerships within the Bitcoin ecosystem demonstrate the project's operational strength.

Babylon

•    Project Introduction

￮   The Babylon project attempts to use Bitcoin collateral as a new way to improve the efficiency of Bitcoin as an asset and strengthen the economic security of PoS chains. This new use has brought positive effects to Bitcoin itself, Layer2, and related PoS ecosystems.

•    Project Highlights

￮    Strong Security: The Babylon protocol ensures comprehensive security of the PoS chain. In case of any security violations, at least 1/3 of the staked bitcoins will be deducted.

￮   Pledge protection: As long as the pledger complies with the rules of the PoS protocol, they can ensure the safe withdrawal of their funds.

￮   High Liquidity: Babylon allows pledgers to quickly withdraw their bound bitcoins without relying on community consensus mechanisms.

￮   System Architecture: A system architecture has been introduced for scaling multiple validators and multiple PoS chain protocols.

￮   Fast Unbinding: Designed a fast and frictionless asset unbinding process, reducing the time required for unbinding.

BitSmiley

￮   Decentralized stablecoin protocol: BitSmiley has launched an over-collateralized stablecoin protocol through the Bitcoin network. The UNO issued by the protocol is a stablecoin anchored to the US dollar. Users can mint UNO by locking Bitcoin as collateral in the BitSmiley vault (a smart contract on the Bitcoin blockchain).

￮   Trustless lending agreement: BitSmiley's native lending platform allows users to participate in decentralized lending activities. Borrowers can receive the tokens they want to borrow by pledging BTC, and the pledged BTC will be returned after the borrowed assets and interest are repaid.

￮   Derivative Agreement: The BitSmiley plan is to expand to loan-based derivatives, improve capital efficiency, and meet the demand for more complex financial instruments in the DeFi space.

•    Project Highlights:

￮   Stablecoin issuance mechanism integrated with Bitcoin blockchain: Effectively reduces market risks caused by Bitcoin price fluctuations and provides users with a more stable trading medium.

￮   Advanced clearing and auction design: The Dutch auction is used to address the problem of insufficient collateral value, and automated execution through smart contracts ensures the robustness and decentralization of the system.

￮   Innovative insurance and risk management solutions: proposing an insurance pricing model based on extreme value theory and T-Copula, allowing borrowers and lenders to hedge against potential large price fluctuations and increasing the security of the agreement.

￮   Capital efficiency improvement: The splitting and merging function of loans improves capital utilization and meets the borrowing needs of different users.

￮   Future scalability and innovation guidance: The project has planned the development of multiple derivatives, including credit default swaps (CDS), and is committed to building BitSmiley into a one-stop decentralized financial platform that supports a variety of financial services.

alexGo

•    Project Introduction:

￮   alexGo is a platform based on the Bitcoin DeFi (decentralized finance) ecosystem, with the goal of becoming the top DeFi platform for Bitcoin users, innovators, and the wider ecosystem, addressing the limitations faced by Bitcoin in the DeFi space due to the need for smart contracts and computation layers.

￮   alexGo utilized Stacks Layer 2 solution to introduce smart contract functionality to Bitcoin, aiming to eliminate barriers between Bitcoin L1 and L2 and create a seamless DeFi experience.

￮   ALEX established the "Bitcoin Lab" ecosystem fund, which provides funding support, technical services, community participation, and a platform for project launch and growth, which is very attractive to project developers and investors.

•    Project advantages:

￮  Seamless bridging: Enhances the entire Bitcoin DeFi experience through its seamless bridging between Bitcoin Layer 1 and Stacks Layer 2.

Portal Defi

OKX Web3 Wallet Closely Serves Users and Continuously Meets User Needs

OKX Web3 wallet always adheres to starting from user needs, and quickly refines user needs into product requirements, rather than using its own needs as user needs.

OKX has launched a one-stop DApp exploration and reward interaction platform called Cryptopedia, which regularly launches activities with different blockchain networks as themes, and collaborates with corresponding partners to jointly set DApp interaction tasks, helping users reduce search costs while also allowing for precise interaction during fragmented time.

OKX Web3 wallet has launched the DeFi section, which is an all-in-one on-chain investment platform. It aggregates various investment products from 10+ public chains, 60+ projects, and 200+ protocols, supporting V3 liquidity pools, one-click cross-currency investment, automatic income calculation, and lower gas fees, making DeFi investment extremely simple.

OKX Web3 wallet has released its latest ecosystem overview, which shows that its wallet section has connected to more than 70 public chains, its DeFi section supports over 120 protocols, and its NFT market aggregation platform covers more than 30 platforms. It also supports multiple ecosystems such as Game, Social, MEME, Tool, etc., with a total of more than 300 supported platforms and protocols.

Summary

In terms of the Bitcoin ecosystem, OKX Ventures has demonstrated a firm commitment and continued dedication to driving ecosystem innovation and accelerating the development of blockchain technology. With the growth of Bitcoin users, Bitcoin blockchain data, and the emergence of new innovative protocols such as Ordinals, the Bitcoin ecosystem is experiencing unprecedented growth. OKX Ventures not only provides financial support, but also services and resources to help partners develop together.

Recognizing the enormous innovation space in the Bitcoin ecosystem, OKX ventures provides platform-level support through OKX Web3 wallet and OKX Chain to help projects find a foothold in this booming and magnificent field of encryption. For OKX ventures, the prosperity of the Bitcoin ecosystem goes beyond simple financial investment, and we value long-term industry development and scale growth.

Even in the ever-changing market environment, OKX Ventures focuses on the continuous improvement of the industry, paying attention to the introduction of theoretical innovation, practical new applications, and the actual growth of user traffic and the overall industry scale. We firmly believe that in the next three to five years, OKX Ventures will witness and seize greater market opportunities brought by the Bitcoin ecosystem together with the market.

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