The founders of Bitcoin L2 gathered together: What difficulties are technology, ecology and consensus facing now?

This issue is the Twitter Space organized by ABCDE Labs. The content of the article does not represent Wu Shuo’s views. Xiaoyuzhou can listen to it at:

https://www.xiaoyuzhoufm.com/episodes/66376ca603bcdd73a9944fb2

Host: BMAN, ABCDELabs

Guests: Jeff, Merlin Chain；Ryan Chow, Solv Protocol；Charlie Hu, Bitlayer；Stan, B²Network

BMAN: Merlin TGE more than a week ago. I guess Jeff has mixed feelings over the past 10 days. What are your thoughts? Can you share them with everyone?

Jeff:The first one I think may be the bridge-in and bridge-out of our assets. It is true that we were not well prepared before, just like the current BTC, BRC-20, NFT, ETH, USDT, Manta, etc. There are many assets. So in the process of bridge entry and exit, it is actually very complex. To be honest, most chains are relatively cautious about their own challenges at the beginning. But we may have been wild in the past when we did Web2, and we put all kinds of protocols in anyway, which led to problems with bridge entry and exit. As for BTC, we are already very stable in this area of bridge entry and exit. I took a look at the on-chain data. In the past month or so, about 78,000 BTC were bridged in, and more than 70,000 BTC were bridged out, so its overall liquidity is actually very good. I believe that there are actually very few exchanges in the world that can have so many BTC in and out. But like NFT, like runes, like this, including we have also connected to Manta, TRON, and now we have also connected to MODE, and some Layer3, including the recent discussion with Linea, that is, too many assets are actually beyond our control. So if you want to do everything right from the start, you will find that the user experience will be greatly reduced. This is my first feeling.

The second feeling is to find out what are the advantages and disadvantages of the so-called fair launch? If we started playing with Bitcoin last year, everyone would believe in the concept of fair launch, and we saw that BRC-20 and BRC-420 were actually fair launches, that is, there is no whitelist, no invitation system, no rules and restrictions, and everyone just played anyway. Then you will find that it may actually perform very average today. Maybe last year we thought that ORDI might be 100 or 1000, but now you will find that the market has pulled back, and the pullback of ORDI and SATS is also very obvious. Runes actually use two more methods. The first is the pre-runes method, which is to first send NFTs to everyone, and then everyone will change hands and trade first, and then send coins to everyone. There is also the pre-mint form. Runes specifically introduced the pre-mint form, so many coins are pre-mint.

You will find that the advantages and disadvantages of fair launch are quite obvious. For example, for Merlin tokens, in fact, within 6 to 12 months, at least in the first six months, all tokens were actually airdropped by users, and then the selling pressure would be very large. That is, after everyone got the airdrop, once the market went down, everyone saw that BTC went from more than 70,000 to nearly 60,000 now. Many people may predict that it will break 50,000, break 60,000 to 50,000 or even lower. So in the whole downward market, you will find that the market pressure of fair launch tokens will be relatively large.

So this is probably my feeling. I think that if you are too aggressive in a product, you have to bear the consequences of being aggressive. The second is the launch mechanism. Let the market be full of users' tokens, and the selling pressure brought by its liquidity will be very large. Of course, you will see that among all the new coins on OKX, including Merlin’s current trading volume, the daily trading volume has always been very high. It has been in the top few for the past ten days, so it also shows that the market is madly trading this token. As for what will happen next, let’s wait and see.

BMAN: There are already dozens of Layer2s on the second layer of Bitcoin, so how can we make some differentiated routes in these dozens of Layer2s? What kind of approach can we take to stand out?

CharlieHu:Looking back to September, when countless people were FUDing Ordinals last year. "Ordinals is dead" has become a very interesting MEME and catchphrase. Every time I think of that time, I feel that when everyone is FUDing you, it is actually a bottoming signal. If you stick to it, you may be able to move forward. There must be such a process.

Then Bitcoin Layer 2 is indeed in a very interesting process. Just two months ago, everyone was discussing it. I remember when I was in Denver, everyone had a feeling that there were more than 100 Bitcoin Layer 2 projects. But if you think about it carefully, you will find that there are really no more than 10 projects that are really promoting it, including those that have made great progress, including those that have a vibrant community and have some special strategic approaches. Then I have always believed in a principle, that is, the number of projects that can really promote the development of this industry, whether in technology, including product design, including the matching degree between the market and the product, may indeed be only in the single digit. So how to gain the share of developers and the market, in English, it is called mind share, which is a space in everyone's cognitive field. I think it is very critical, because people can't actually remember more than 10 Bitcoin Layer 2 projects, so differentiation is very important.

There are three aspects of differentiation. The first is technical differentiation. At the infrastructure level, is it security, or is it a capacity expansion plan, or is there something special in the development environment? We promote two technology stacks of Bitlayer. The first is BitVM. We should be one of the earliest teams in Asia to study BitVM, and now we have made the most contributions. We should also be in the top three in the world. There are three upgrades and three commits in SHA256, and two of them have received two grants from the official BitVM team. In fact, there have been a lot of promotions. We are not just waiting for traditional BitVM, but doing this.

The second is DLC. This DLC is a very underestimated one. This is a technology proposed by an MIT professor. This technology is very helpful for building a decentralized cross-chain bridge. In combining DLC and BitVM, and promoting the construction of this bridge, we have already released many detailed functions, and we can also expect our engineering team to release them later, and many details are also in our original technical white paper. This is the technology part, and the second is the product, that is, product innovation. In fact, Merlin has made a lot of interesting innovations in the Bitcoin track. We are also looking at different product routes from different tracks, especially in the DeFi of Bitcoin. I have personally experienced a lot since the DeFi Summer of 2020. Whether from the perspective of investors, retail investors, or developers, many second-layer DeFi projects on Ethereum are actually exploring new narratives and then mining new TVLs and new assets. The TVL of the Bitcoin ecosystem can be activated, and then some new DeFi-like gameplay and asset operation gameplay of the Bitcoin ecosystem, as well as various scenarios, can be developed. From the three types of TVL, some so-called TVL that may not be so real to the real TVL but not used TVL to the real TVL plus the TVL that is really used in practice, I think this is a gradual process. The TVL that is actually used, on the asset chain, assets can be utilized, and maximizing the efficiency of utilizing this asset requires a variety of good scenarios.

Whether it is Bitcoin's stablecoin protocol DEX, whether it is Uniswap v2, v3, or various assets like money market credit, and then that includes various structured financial products, and products like Yu'ebao, such as Solv, including some like re-pledge, and including options and futures.

There are already many products in the DeFi world. I think there will be many new DeFi games in the Bitcoin world. I think this is worth looking forward to in 2024. To a certain extent, this is at the implementation level. For example, if BitVM really wants to be fully implemented on a large scale, ZK writes proofs to the first layer of Bitcoin. This will definitely be implemented faster, and this is what we are exploring now; in terms of products, differentiated competition, as the second layer on Bitcoin; the last one is culture. This year's phenomenal infrastructure project, which everyone knows, is BeraChain. Berachain has done a very exaggerated variety of cultural activities in Dubai, and there are also in Denver, and Dubai is even more of a dimension. I think cultural output and culture are to occupy the minds of all kinds of people, as well as a large stickiness of the community, and attract all kinds of developers and users. This is a very exaggerated project. We are also learning from this project. Some of the practices of their founders and their marketing practices are also some dimensions we are learning.

At present, we have put a lot of effort into brands such as racing, acceleration, and Bitcoin engine. Our leader board ranking has decided to go the F1-style gameplay, and we are also exploring culture. Only a public chain that can really play through culture can gather long-term users from various communities with consensus. It is not just about getting some airdrops and then moving on to the next ecosystem. So in summary, there are three aspects: infrastructure technology, product design innovation and application scenarios, and culture in this regard.

Stan:I agree with many of the points Charlie mentioned just now. In fact, the demand for Bitcoin is very large. The liquidity of Bitcoin, how to get some places for the Bitcoin in the hands of miners, and how to earn interest, in fact, this demand has always been very large, but the infrastructure of Bitcoin itself is very backward. As Charlie mentioned just now, Bitlayer is built based on BitVM. In fact, BitVM is a paper in the second half of last year that is very worth reading and has given us a lot of inspiration. But if it really wants to be realized, I think it will take a long time, so we (B² Network) are actually some architectures on DA, and we don’t want to do general computing on the Bitcoin layer all at once like BitVM does, but we first solve a simple problem like how to verify ZKP on the Bitcoin layer.

So back to us, I think one of our core differences is to solve some very painful pain points, and to propose a modular architecture. If we really want to compare the entire Bitcoin ecosystem to a large computer, and we want it to be scalable and perform more general calculations, I think, like a traditional blockchain, we will divide this architecture into three layers, namely the execution layer, DA layer and consensus layer. DA stands for data availability. For example, the execution layer, like our b² rollup, and Merlin Chain, can actually be regarded as the execution layer. It can be infinitely horizontally expanded, and we can have many such rollups.

What about the DA layer? The DA layer has actually been lacking a mature solution on the Bitcoin side. We implement DAS ourselves through B² Hub. Then we also see that some other projects, such as Nubit, will also do their own DAS. At the same time, our own DA also combines decentralized storage. This whole layer is not something that we do alone, but we want everyone to come together and record the final data index and some proofs on the Bitcoin network.

The last layer is the consensus layer. This layer is the point that all of our builders trust Bitcoin very much, because Bitcoin is the strongest consensus in the entire Crypto field and the gathering place for consensus. Bitcoin has such a large number of miners and computing power gathered here, so its consensus layer is very powerful. The consensus layer occurs on the first layer of Bitcoin and is combined with some off-chain mechanisms. We can use the commitment verification and challenge mechanism, and then let the first layer of Bitcoin verify whether the transactions that occurred on our second layer are real and whether anyone is doing evil.

So based on this architecture, I think we just want to push this architecture to the market. It is not that this is an architecture that we have developed behind closed doors, and we actually hope that everyone can come and see and use our two products. I just mentioned one of our rollups, which is actually a rollup that is compatible with EVM and uses Bitcoin as gas. Its performance is now completely comparable to Ethereum's Layer2 in terms of user experience and so on. Because of this architecture, the final settlement of the entire Layer2 transaction occurs on Bitcoin. We are not a side chain at the same time. Our security does not rely solely on ourselves. We hope that security will rely on Bitcoin as much as possible.

Our second product, our DA layer, implements the pain point mentioned above. We need to solve the ZKP commitment verification to achieve the purpose of relying on Bitcoin for security. Because you see that Ethereum's DA is actually to make Ethereum's second layer cheaper and more efficient. But Bitcoin's DA, in fact, if there is no Bitcoin's DA, our rollup will not be possible. Then the rollup is a fake rollup, so Bitcoin's DA is a necessity. These are some of our features, and we also hope to use these two products to prove the feasibility and security of the entire modular expansion of Bitcoin, and then in the future there will be other builders who can also access this architecture and expand Bitcoin in their own way.

BMAN: How do you view the pattern of Bitcoin ecology in the East and the West? Which one has more advantages, the Bitcoin ecology in the East or the Bitcoin in the West? How will the Bitcoin ecology in the East and the West be differentiated in the future?

Ryan Chow:From the perspective of Solv, we are a team that developed in Asia, but we have quite a lot of in-depth cooperation with the West and the East in all aspects of the public chain ecology. So I will briefly talk about our feelings. I think that overall, the Bitcoin ecosystem is indeed divided into several modules. I think the first module is obviously the current module like inscriptions and runes. This module is like the early inscriptions from the East and the runes in the West. I found that many people in the East are willing to participate together. So now we can see a certain confrontation in these areas. That is to say, some new assets related to the Bitcoin ecosystem that are biased towards Western culture are actually beginning to appear. I think this is actually a hundred flowers blooming. I think that overall, both the East and the West will have them. I even think that there will be some assets that both the East and the West are willing to accept, because we also see that more and more Western users are using OKX Web3 wallets, as well as various other ones, such as Merlin, and various other infrastructures we have built, such as Unisat. I think it is very obvious that we can first form a unified infrastructure, and then under this unified situation, we can gather together to create new assets on the upper layer. Otherwise, I think that now each of them is developing separately, and some underlying infrastructure will be somewhat fragmented.

Then, I think that in the entire Bitcoin Layer2, we can see that the West will actually have some BTC Layer2 infrastructures such as Botanix and Bob, but I think that from the overall perspective of the concept of technological innovation and the creation of this ecosystem, I actually think that Eastern projects and Asian projects are more comprehensive.

The first is called paved way, paving the way first. Then it actually gives everyone a lot of inspiration and user education for other Western projects, especially user education, which I have a particularly deep feeling about. That is to say, a large number of retail investors in the Bitcoin ecosystem are now mainly Asian users, and the emergence of L2 in the East is indeed mainly to educate these new users. Now the Western L2 is coming to continue this wave and attract a large number of Asian users to build their ecosystem. We can also see this demand and trend clearly.

Then in terms of technological innovation, we can see that I think the East and the West have their own advantages, especially the three founders of L2. I think the technological innovation in the content they shared is obvious. In fact, I think a lot of in-depth thinking and innovative mechanisms are not worse than those of Botanix and Bob.

I think everyone has actually made a lot of innovations, so at this stage, it is often a stage of concept packaging, and then how to make the market better and faster to accept our innovative mechanisms. Because the underlying technology mechanism, I think it is very good. Both the East and the West have it, but it is true that on the Western side, in terms of propaganda from the perspective of English, some Western chains do have certain natural advantages, because they talk about it every day in the European and American circles, and compared to them, we definitely have fewer opportunities to speak in the European and American circles, so I think this is indeed a certain difference.

But in the end, I think in terms of user groups, I think Asian retail investors must be the main user group. This is also why we can see that in the past, in the Ethereum ecosystem, these Western strategy ecosystems rarely came to Asia to hold a large number of activities, but now some Western L2s are frequently coming to Asia, especially Hong Kong, to hold a large number of BTC-related ecological activities. We can see that now the funds and users are all in Asia.

Here I can also add a very interesting piece of information. I know that some people who want to do Bitcoin L2, when they go to some Western institutions to obtain some BTC and some financial support, are actually very difficult, because many institutions need a lot of audits, and then consider all aspects of compliance. So in fact, it often takes a long time, and finally 100 or 200 bitcoins are taken out, which may also be of this magnitude. And in Asia, as everyone knows, a miner may be a person of 1,000 bitcoins.

So I think at this point, the orthodoxy of the East and the West has its own. I think Bitcoin is not as disadvantageous as Ethereum in this regard. I think everyone is equal. But in terms of the volume of users and the amount of funds, I think Asia really has a huge first-mover advantage. This is very similar to the early development of the collateral currency by Binance and OKX. The development process was based on the Asian market in the early stage, and then it went global. So in this regard, I am actually more optimistic about these L2s in Asia, from my perspective. Because I am not doing L2, so I will express my third-party point of view.

Then we will also see some very basic infrastructure, such as Babylon, which is a restaking infrastructure. I think that it is indeed true that it often has a good effect to fight from a Western perspective. If Babylon is doing restaking infrastructure, the right to speak and the tone of the brand are actually very high. From this perspective, they found a professor at Stanford and then went to Europe and the United States to start fighting, which is indeed a relatively successful way. Recently, I have seen that their model is still quite popular, so this is also a kind of. Then finally, there is the application layer. I think Solv is strictly speaking an application layer, belonging to the liquidity infrastructure, or the application layer of Bitcoin Yu'ebao. I think at this level, everyone's innovation is indeed the same in all aspects. At the same starting line, in the East and the West, whoever has a larger TVL earlier, a stronger global brand, global users, and whoever has more opportunities to reach users on exchanges earlier, I think will gain a larger leading advantage with a higher TVL.

We will also see many such application layer products in Asia. The Bitcoin-related application layer will grow rapidly and continue to gain great influence in the West. Recently, I have a particularly strong feeling that many of our Solv users actually started in Asia, including many Japanese users, so there are a lot of Asian users participating. But now there are a large number of institutions and such BTC ecosystem participants in the West, and they actually feel very FOMO. From the perspective of the application layer, it does make them more inclined to participate or support. I don’t think everyone is very strong on this point. Because it is the East, because it is the West, there will still be such a gap.

CharlieHu:First of all, the term East and West has many dimensions. First of all, it is the geographical location of the East and the West. We are in Asia in the Eastern Hemisphere, and their time difference in the Western Hemisphere is different. Then in terms of culture, I think there are actually Chinese circles all over the world now, and many like Babylon, Nubit, including many elderly people who have gone out, are actually some Chinese teams with great influence in the United States. We delayed 80% of the first round of investors, and the investors were all European and American institutions. At that time, we also hoped to focus on Asia and then promote it overseas.

Then I think that the Bitcoin ecosystem has reached the second half of version 2.0, and it will definitely not be played by the Asian community alone. From the asset side, 70% to 80% of BRC-20 users last year were Chinese and Southeast Asian users. Now it is possible that Europe and the United States have taken the lead. Then Asia is actually catching up, and I don’t think it will lag behind. This is a process of integration and progress of the East and the West. Not to mention the second layer, because the second layer is actually driven by many developers. I think the earliest one should be from the ICO in 2017 to the DeFi Summer in 2020. In fact, many Chinese projects were promoted and successfully promoted in the ICO in 2017. There are also some projects that are in the top 50 in market value, and some are at least in the top 100. I think there are at least a few.

Then, in the 2020 DeFi Summer, which was for Chinese founders, Chinese communities, and Chinese technical teams, we actually lagged behind a bit. There are indeed two reasons, which we can also analyze in detail. Ethereum's 2020 DeFi Summer had many good European and American projects. There are two reasons. The first is that they do have a deeper understanding of the design of financial products; the second is that they have a closer relationship with the Ethereum Foundation. At that time, the Ethereum Foundation was basically still dominated by the European and American regions, and Asia was actually a bit out of touch. Therefore, in fact, some Chinese, including Chinese, who have very strong financial engineering and financial product design capabilities, were not able to enter this DeFi as builders in the first wave. At that time, the earliest wave of projects from Uniswap to various machine gun pools with some gameplay, and later DYDX, were actually not Chinese teams. Later, after BSC, including Polygon, and even various other public chains, there were many Chinese teams, and many of them were forked by writing early blue-chip Ethereum layer projects. The Bitcoin ecosystem is actually different, because DeFi has gone through a whole year of cycles, including a bear market, and many products have basically been iterated and tested several times by multiple chains. So now many of the Ethereum or other POS strategies we come into contact with are from this kind of DeFi. Many of the founders of these projects, including some NFT builds, are actually very experienced and have experienced one or two bull and bear markets.

They are actually very mature in terms of products. For example, Solv, which was established in 2021, has already produced many products. This type of Chinese team is actually very capable. In terms of product design and operational capabilities, they actually have a very experienced overseas team, overseas channels, and overseas KOLs. These accumulations are not inferior to those so-called Western teams. Because in fact, every team starts to do product design. After the concept verification, it actually has to promote the market. Those channels and various KOLs around the world are actually a fair competition process. If your product is good and the terms you give to everyone are better, everyone will be willing to cooperate with you.

In fact, to put it bluntly, there are some people who are willing to cooperate with you in every market. They don’t pick whether you are Chinese or Western. In addition, in terms of valuation, many of the Layer2s we see in the West, I think whether it is Layer2 or various application layer projects, are relatively highly valued. I think we are not inferior to them in this aspect. On the one hand, our valuation will not be inferior to theirs, and secondly, our speed will not be inferior to theirs. We also have cost advantages. Our engineers and operation team are more competitive and faster, and the cost is relatively lower than theirs. I think we can have advantages over them in these aspects.

As for what I just said about Bob, I know a lot about their situation, and I won’t talk about these situations in 2019. In fact, many teams first did something in the Polkadot or Ethereum ecosystem, which may not have been very successful, and now they see the opportunity of Bitcoin. Some overseas teams came here. When I met Alex and Dominic in Denver and Dubai, they also mentioned that they all came from Polkadot in 2018 and 2019, and then came from Ethereum. Now they are in the Bitcoin ecosystem. In fact, everyone has the same goal. So we should think that our real competitors should be like BeraChain, or Blast. I think it’s boring to FUD the so-called imaginary enemy every day. They actually have many problems themselves. I think this is one.

The second is the Bitcoin ecosystem team, the Western team, and the Eastern and Western teams are integrated with each other. I think this Hong Kong Bitcoin Conference should be a good opportunity for the strongest lineup of the East and the West to integrate. I don’t think it will be a split, but more integrated. A lot of capital will go to Hong Kong. Many people in many institutions actually look at white faces, and they actually know China very well, so I think there is no so-called absolute split between the East and the West, only everyone’s choice.

Some asset custody in the East may use cobo or Spark, while overseas may choose Coinbase. These are just brand preferences. However, for the first principles, some principles of Bitcoin, including security, trustlessness, and DA in the second-layer network, and what are the better Layer2 standards, there is actually some consensus between the East and the West to a certain extent, and the consensus on this is still relatively strong. On the contrary, I think the most recent split is the split between Ethereum and Bitcoin, which is actually quite interesting. We are working hard to reach all kinds of Ethereum, the inner circle, and the final circle of these activities. We sponsor them, and we go one by one to make various Ethereum developers aware of the opportunities of the Bitcoin ecosystem, and bring their experience resources and users, as well as their products to the Bitcoin ecosystem. I think this is what we Bitlayer do, and it is also to increase the value of this ecosystem. Blindly rolling up the original inscriptions, those old users are not our biggest goal in my opinion, and our geographical location is not limited. We are also reaching out to various regions, and our users will not only focus on Asia.

BMAN: Today's topic is about how to unite the power of Chinese people to consolidate the Bitcoin ecosystem. Because the Bitcoin ecosystem has always originated from the Chinese and the East, the most important thing today is to talk about the Bitcoin builders present here. How can we work together?

Jeff:It can be said to be the East and the West, but because the East and the West represent some different values and styles of doing things, of course there is no distinction between good and bad, high and low, but the market's impression of them is definitely different. I think this layer of window paper can be punctured. I think the market has higher requirements for Eastern projects, especially Chinese projects, because in the eyes of Westerners, Orientals may not be so credible, and in the eyes of Orientals, Orientals are not so credible. So he looks at you with a microscope, right? For example, we have been saying that whether it is the number of airdrops, the number of airdrops in circulation, or the pledge mechanism, the decompression mechanism, the bridge time, the cost of the bridge, etc., if you look at all these dimensions, you will find that everyone will really look at you with a microscope, not a magnifying glass.

But without talking about this, I think first of all, the Bitcoin ecosystem is more suitable for Chinese people to come together, whether it is trading or construction. Because there is nothing in this ecosystem, there is no God, that is, anyone can come to make something, and no one will judge him. But in other ecosystems, you will find that I believe that people who have really been developers and applications know that if you are in any other ecosystem, you will find that there must be a God, no matter who this God is, but there must be such a person, so you will find that it has become a political game. Just like I said that I have been starting a business in Web3 for a year, I think the biggest feeling is that Web3 is more centralized than WEB2. It has become a business that says you have to please God, then listen to the decree, and then execute God's decree to him very perfectly. Then you will find that the Chinese are definitely far from the Western gods, so you will find that some of the good projects in Ethereum that are really done by Chinese are actually more like helping out, that is, you definitely cannot get some key positions in the industry chain, so you can only do things that Chinese are good at, such as making some tools, and doing things that they are unwilling to do.

But Bitcoin is different. You will find that Bitcoin is a fair race now. And because I am Chinese, I participated in Ordinals relatively early, so everyone naturally has this community here, with users and assets, so it is easier to start. And for example, many projects in our developer ecosystem, in fact, many chains are now poaching our developers and asking them to do deployment.

Of course, we also told all developers that we now welcome everyone to do multi-chain deployment. Why? Because this industry is very early, and your application may get different take-aways from different user ecosystems on different chains, and may also accumulate different resources, and then it will eventually feed back to the entire ecosystem and expand the Bitcoin ecosystem, because if after a year, the market value of the assets of the entire Bitcoin ecosystem has not exceeded 10 billion, then this is very sad.

But if everyone can make it bigger together, then the market value of the entire ecosystem will increase, and the entire narrative will come over. Whether it is the Chinese who come to Bitcoin to start a business or the white people, in fact, everyone's overall voice will be greater. Because now, for many overseas, like I listened to a podcast a few days ago, in fact, many overseas institutions or individuals at the top of the food chain, they have a very mocking attitude towards the Bitcoin ecosystem doing Layer2 or something.

Of course, this is also very understandable. That is, many people also had such a mocking attitude towards Ethereum back then. Because vested interests always look down on new things. Just like the people of Bitcoin at that time thought that you are doing Ethereum, why do you need smart contracts. Why do you need to be so smart? It doesn't need to be so smart. Crypto is digital gold. If you are so smart, you might as well buy Litecoin. So you will find that the first wave of vested interests did not get on board, so now new vested interests have appeared again. The new interests will laugh at how Bitcoin can do Layer2, right? You are a fake Layer2.

Actually, I don’t know if it’s intentional or if they are really arrogant enough, because the word Layer2 itself is a created word. If you said the word Layer2 5 or 8 years ago, the OGs of Bitcoin might laugh at you, saying that no one uses Layer1, let alone Layer2. Now that they have the right to speak about Layer2, they will think that Bitcoin has no Layer2, or that Bitcoin itself does not need to have Layer2. Just like many people laughed at Ordinals last year and laughed at Runes today. .

So the history of the whole world is actually repeating itself, although the scenes of each repetition are not exactly the same. I think today's developers, whether they are from the East or the West, must move forward together. But I do think that although it is said in such a high-sounding way, in fact, everyone will inevitably have the awareness of competition in the process, and I think that's fine. The awareness of competition makes everyone demand more of themselves. When you do something, you will say, look at how your competitors do it, then we must not be worse than them. I think this attitude is definitely OK. As long as it is not caught in a kind of internal circulation and vicious competition, the entire industry can move forward. This is my personal opinion.

Stan: In fact, the entire West should have occupied the discourse power mainly in the last cycle, and it is also because the entire Ethereum, DeFi Summer, and some of the later major technological innovations may come from some innovations of Ethereum itself, so to some extent Ethereum has become an orthodoxy and mainstream. Then they actually led many mainstream narratives. And I saw many professors from top Western universities, as Ryan mentioned earlier, who actually came out to support and further strengthen these narratives. Eigen Layer and Babylon in this cycle actually have the same characteristics. But I always think that, especially for Bitcoin, our advantages are still very obvious, that is, miners and exchanges are actually mostly from the East, and the core audience of Bitcoin is mainly in Asia Pacific. Whether it is asset volume, user volume, or liquidity, the East has more advantages, including large mining companies like Bitmain, and this other advantage is difficult to replace. So we actually build against this background, and there are definitely many advantages that need to be utilized.

That is to say, back to us, our projects and some of the things we are doing technically, in fact, we Chinese, or just Chinese-led teams must be organically integrated. I think making the product more modular, more combinable, and being able to interface with each other can also avoid reinventing the wheel and reuse each other's advantages. For example, we plan to announce our POS tomorrow. This protocol is actually a composable protocol. We don’t plan to issue invoices ourselves, so third parties can also issue invoices. I think it’s OK to open up protocols like this and let everyone use them on this basis. Or if you think ours is not good, you can take the contract code and develop your own. I think as long as everyone can maintain a state of cooperation, combination and communication with each other, the entire Chinese Bitcoin builder field can keep moving forward.

Actually, I also went to Dubai this time, and I had a lot of feelings about TOKEN 2049. First of all, let's look at how the city of Dubai rose. In fact, I kept looking at their history at that time, and there are several key factors. First of all, their geographical location is very good. I think I will just give an example casually. Of course, this example may not be very good, but I will use how the city of Dubai rose in the first half of the century. It may inspire you, that is, as a Chinese Layer2, how he should move forward. Dubai, first of all, is a very strong strategic geographical location. It is at the intersection of the East and the West, and in fact, Bitcoin itself is also such a strategic hub in the field of Crypto, so in fact, the builder of Bitcoin naturally occupies such a geographical position. In addition, Dubai itself wants to emphasize the free economic policy, so I think that the Layer2 of Bitcoin can also do more trade exchanges and more mutual circulation of assets, which is very important. Then the third is that Dubai has made a lot of investment in infrastructure. I think the entire Bitcoin ecosystem is also like this. We may jointly support some builders who are very good at infrastructure, wallets, accounts, abstractions, etc., and then build them into world-class facilities such as airports and ports. For example, Dubai has some very iconic buildings, such as the Burj Khalifa, which has actually become a landmark. It can attract people from various other ecosystems and other geographical locations. So I am particularly looking forward to whether it is Merlin, BitLayer, B^2, or CKB, which may not come today, but I think there will always be some Burj Khalifas growing in everyone's ecosystem, just like Arbitrum had GMX before, that is, every public chain can actually create its own benchmark application.

Like Merlin and Bitlayer, they are also preparing for these collaborations, and we are also jointly supporting and serving such excellent builders. I may have used Dubai as an analogy to describe a chain, but it was actually a random analogy, because in the field of Web3, if a chain or a project can have hundreds of thousands of users, it is actually a very powerful ecosystem. So we are still in the very early stages, and there is no need to distinguish between you and me at this time, because if you look at Bitcoin, I think it is really the first stop for non-Web3 fields to enter Web3. As an engineer, the first lesson we learn about blockchain must be Bitcoin, POW, and UTXO. So Bitcoin will always have an influence, whether in the Internet or in the traditional financial field, and it is also the first stop for the public to hear about Crypto and Web3 for the first time.

If you say a child, the first thing he asks his father is definitely "Dad, do we have Bitcoin?" He will also ask "Dad, do we have Ethereum?" So I think that if we make good use of the advantages of this entrance, and the market is really big, we can make the products combinable and reused, and then we can push Bitcoin forward together.

Ryan Chow:From my perspective, I think that in fact we are actually holding together and then jointly collaborating; from the purpose, in my opinion, it is about how we can unite together to better serve all these users. Because I actually think that in the end, if we can seize a very large market share in the Bitcoin ecosystem, or even occupy a dominant position, its fundamental point is that we can serve users very well, that is, we can do all the needs of users very well. For example, like Ethereum and Lido, Ethereum has done POS, then Lido will appear at this time. Basically, you can say that Lido and Ethereum have joined forces, because Lido came out of the Ethereum Foundation, but on the other hand, it is also because Ethereum has a foundation that understands the needs of Ethereum's big users the most. It even collects feedback with Ethereum's big users and then makes it. At this time, he has a project like Lido around him, and he is also very clear about what the user needs are. He may realize it a year earlier than everyone else. At this time, he is preparing to make products, which will of course better meet the needs of the market, or meet the real user needs.

I have just repeatedly emphasized that users are in Asia, including the development of early exchanges. Users are in Asia. Because in Asia, of course, Binance, OKX, and Huobi are the best exchange products. This is very obvious. Similarly, in the Bitcoin ecosystem, I don't think that everyone has such a strong orthodoxy and ideology as Ethereum. I prefer to call it an exploration of user needs, a deep understanding within the circle, and the ability to transform it into specific products.

I think whether it is the application layer Solv or the infrastructure, if we know what the market needs, we can iterate what is needed, and then the whole market will adopt it. This is what I think is the greatest significance, so I think BMAN and ABCDE Labs should organize and communicate frequently and deeply, and then look at the development trend of users and the entire market, and look at the real pain points of the market, and then they will naturally find their own position.

Just now, I think that brother B^2 also spoke very well. That is to say, what kind of overall angle, and then cut in, and then everyone can serve the needs of different users, I think these are typical examples, which is obviously a deep understanding of users, a conclusion we can draw, so I think I am quite confident about this.

Now the user market is all in Asia. But of course I think this is just like Binance is also doing Europe, America and the world, such as various Eastern European and Southeast Asian markets. I think we actually start from Asia and are also serving more market users in other regions. But I just say that the possibility that the current standard setters and rule setters are actually in Asia is relatively high. If we radiate outward from here, I think we can still make something very good.

Finally, I would like to add that I think that in terms of the pain points and needs of the market as a whole, I can actually see that there is a clear divergence between the East and the West. That is, Asian users are actually willing to believe in the custody solutions of Cobo, Bitmain, etc., which are centralized trust, and add technical mechanisms to the underlying endorsement as the custody framework and other mechanisms. I think this is clearly fully verified to be feasible in Asia. However, this model is not necessarily feasible for many Western users, because Western users do want a completely decentralized mechanism, a completely decentralized Bitcoin cross-chain, or custody, or some mapping solutions, so I can actually see a clear divergence on this point. I don't think this matter must be left to Westerners to make, or that only Europeans and Americans can make this completely decentralized Bitcoin mapping solution. I think that we are actually seeing a lot of attempts now, and there is also an opportunity to create such a solution in Asia. If it can be done, then first of all, our plan for Asian big miners and big users is that I think we can definitely take over Asian projects. At the same time, there are some real demands from the West. We will jointly explore what these Western demands are, and then put them into these Asian projects. How can we better serve them? In the end, users from both the East and the West can actually be connected. I think the fundamental point is that user demand is a very important point. I think ideology is very important, but I don’t think it is insurmountable. I think the success of Binance, Bybit and OKX in various aspects actually proves this point. So in general, the meaning of holding together is to explore the real needs of the market, and then we can iterate better products. I am still confident about this.

BMAN：I think that the several large Chinese projects should not only communicate, but also support and promote each other. I have a very deep feeling, that is, I recently saw a picture on Twitter, that is, Indians have dominated this cycle again. In fact, the last cycle was dominated by Indians, from Polygon, and then to these large funds, and this cycle is even more so, like Eigen Layer, and AAVE is also Indian, and the AI project is also Indian, and the founder of Polygon came out to do a new project, and there are many projects done by Indians, including a co-founder of BeraChain is also Indian, so what I can see is that Indians gather together. Including what I heard in Hong Kong is that several Indian big brothers are Sreeram from EigenLayer and Sandeep from Polygon. They brought a group of Indian brothers, more than a dozen people, and then went everywhere to help their brothers to do some ecological support. So we can see that Indians are very united, and Indians are united to dominate the entire Silicon Valley.

You can see that the boss of Microsoft is also Indian now, so I am quite emotional. In fact, Chinese have basically dominated Crypto since 2013, but now if you look at the most FUD Merlin, it is actually Chinese, I wonder why there is FUD, right? Then you compare so many airdrop plans horizontally, Merlin is the most generous to take 20% of the coins for fair launch, then you look at the Indian Eigen Layer, and how many points does it give? It's stingy, including various recent airdrop plans.

But why are Chinese FUD the most fierce? Then why can't we unite together to create a track of our own? This is something I feel very emotional about, so I actually want to make a temporary proposal now, that is, ABCDE is willing to help and take the lead, that is, we will organize some token swaps after TGE for some top Chinese projects, so that everyone can exchange tokens together, and then take out some tokens, and organize a fund for the Chinese Bitcoin ecosystem to specifically help Chinese Bitcoin builds and projects.

It is still very difficult for Chinese people in this cycle. I can deeply feel that, that is, as Jeff said, Chinese projects are viewed under a microscope by users, exchanges, and various VCs. No one likes Chinese projects, and Chinese people don’t like their own Chinese projects. Then at least our Chinese founders can come together and do something together. We can exchange some interests with each other after the TGE of this project. Then we can cooperate with each other to create an ecological fund to invest in this Chinese Bitcoin ecosystem. I hope that all the Bitcoin ecosystem projects invested by ABCDE can come together and support each other. At least we Chinese should not FUD ourselves. We Chinese should be like Indians, or even more united than them. Because Indians have dominated for two cycles. So what do Indians have? In fact, the population is not the largest in Crypto, and there are no exchanges or top funds. But why can Indians dominate in every ecosystem? In fact, the people who support Indians the most are actually Chinese, such as BeraChain, EigenLayer, etc. How much money did the Chinese invest in them? How much TVL did they contribute? So why do Chinese people support Indians instead of Chinese people? This is something I am very confused about. Yes, so this is one of my thoughts. As a Chinese Crypto investor who has been in the industry for more than ten years, I feel that what is more painful is that Chinese people should really learn from Indians.

CharlieHu：I have a little experience in this topic, but I cannot say I have a say, because I am the closest to Indians among the builders present here. I have two opinions. The first is that Indians do have something worth learning from. I have always held this perspective, that is, if you cannot beat them in certain fields, you should learn, not necessarily join them and learn, and then beat them better. Indeed, you also said that Indians are also called "third brothers" by us. In fact, many projects, including the early Polygon called Matic, when I joined them, were actually looked down upon by many people. They were looked down upon by Americans, and they did not achieve much in the American capital circle, including EigenLayer. His success came from his time at Stanford. If he was not a professor at Stanford, he might not be anything. Then AAVE is actually because the team of the former boss Polygon sold out their coins. They think that Celestia's DA is inexplicably successful, so there is a chance. In fact, many of their successes must have the factor of unity.

The second is that they are very keen in their insight into the market and their ability to capture alpha. I have a feeling about this. Since last year, there have been many small alpha groups among Chinese people, with 30 people in each group. They are very smart and will not randomly add people, because when there are too many people, they dare not pass on various codes, including various opportunities, first-level opportunities, second-level opportunities, and sharing with each other. There are more and more alpha groups in the Chinese community, which I think is a good thing. There are many in India, and many market opportunities do not come from Twitter, but from private sharing. Then I think our Bitcoin ecosystem has actually done a good job in this regard. Then the second point I can share is that I feel recently that many important positions are actually filled by Chinese people, but they may not be pure Chinese, that is, Chinese born and raised in the mainland. Some may be in Hong Kong, some are born in Taiwan, and then grow up in the United States. Some may be ABCs (American-born Chinese), and they may not be Chinese nationals. They have their own points of integration into Western culture, and there are even some very sharp points that can penetrate them, and then have strong product design.

I will talk about a few cases. The top projects in other ecosystems are actually all Chinese faces. For example, the founder of Jupiter is a Malaysian Chinese, and several product managers of SushiSwap are actually ABCs. There are also Chinese partners in Uniswap and Paradigm. Yes, so of course those may not be the Chinese we define as the pure land market, and we actually have too little integration and communication with them. In fact, some of the most important positions in the cryptocurrency industry are already filled by Chinese people, of course they may be second or third generation, including many of the founders of Bitcoin ecosystem accelerators who have been working in China for many years. I think that our communication with them, at least from my own experience, is seamless, and we have many opportunities to prove those Westerners that we are wrong.

They think that Chinese people can't build a very powerful Layer2, can't build some very good technical facilities in the middle layer, and can't achieve a large TVL. To do some DeFi projects worth tens of billions, I think this is the best cycle to prove that they are wrong, because Bitcoin doesn't have the legitimacy of Ethereum. We may not be liked by Chinese faces, especially boys, but by V God. V God likes Chinese girls, jokingly said. So it may be difficult to push him in terms of legitimacy, and Bitcoin doesn't need it. Hal Finney has passed away, and Satoshi Nakamoto can't be found. We don't need to lick people like the so-called Luke. They are not in this community and their influence is not that great, so I think in the end it is still the product and the increment, as well as the final data that speak, which is the most direct thing on the Bitcoin side. Then in this area, our cost advantage, our speed, our efficiency, and our ability to capture opportunities, in fact, there may be great opportunities from a certain point of view. Indians' grouping is actually relative. We have seen that some successful people group together, and there are actually many people who look down on each other.

Sandeep once said to me at the end that he really disliked most of the Indian projects. He was a person who fought his way out of the bloodbath. Most people who stay in India actually have no chance to be on the main stage, so I think I still have a better mentality in this regard. I think the grouping of Indians is also called survivor bias. If Sreeram was not a Stanford professor, he would not have achieved what he has today. If Azura was not the Polygon CTO, AAVE might not be anything. So as long as we have an opportunity and a handle to support each other, there is still a chance in this wave of cycles.

BMAN:In the Bitcoin ecosystem, many different asset protocols have been launched in the past six months, including the latest protocol Runes. I would like to ask everyone, do you have a relative layout of Runes in your own ecosystem, and what do you think of the Runes protocol? Will it replace BRC-20, or even have a longer-term development?

CharlieHu：I personally have high hopes for Runes, although the user experience is very bad. I think Casey has also been FUDed these days, and it is his turn to be FUDed. This is a joke, and it is Western FUD. He is an extremely conceited German. On September 12 last year, it was his few words that forced me to think that Bitcoin's first layer would not be able to go on like this. So there are some opportunities and applications for either off-chain expansion or second-layer expansion. Of course, I don't stand in line. Domo also has the problem of domo. These two people who are promoting standards have value to the industry, and we respect them very much, but they also have their personality defects, which I won't talk about. Runes assets are definitely very popular in the West now. From Denver to Dubai, these Degen and other more sensitive people who speculate in coins are discussing this topic.

On the day of the halving, a bunch of Indians and Dubai people were using dozens of computers to work on runes. No one went to the party. I thought this was quite interesting, but it turned out that everyone burned their bitcoins. This was inexplicably messed up, and there were operational errors. The entire user experience is very bad now. I think this is the same as last year, so you can actually pay attention to the entire asset. I think many of the protocols that have exploded have not yet come out. It is still in the early stages, and everyone is in a confused and groping stage. Many people have occupied some tickers and are preparing to issue some MEMEs. It is essentially a MEME asset protocol. Casey also started to promote it. I think there is no problem with his influence. He came to Hong Kong this time in the hope of finding some consensus between the East and the West. XVerse pushed him to come here. In fact, he still feels quite distant from Asian culture and Asian communities. Then we at Bitlayer are doing two things. We are exploring on the tool layer. First of all, we must support Rune assets to come to the second layer, for example, to improve their user experience by 100 times, including transaction volume and liquidity provision. These are what we must do. There are still relatively few things that can be done on the first layer, including that the experience is definitely worse. Being able to come to the second layer is definitely to pursue better returns and better experience.

We cooperate with teams like RunesTerminal for this purpose. RunesTerminal is our first officially announced overseas ecological project. Then we have a lot of exchanges with them in this area. Recently, I have seen many tool layer projects related to Runes, and many of them have been seen in Dubai, but I think they are all in the early stages and there are no real killer ones. It is not called a killer, but it is very popular and popular. Last year, assets like Sats and Rats were very popular on BRC-20. I have communicated with some teams that were relatively successful in launching runes last year. They are also waiting for an opportunity. I think we are still eager to try, and there is nothing particularly awesome. Leonidas' Runestone can't be counted, but of course it is a good pilot.

Last year, can these old-school first-generation runes and entrepreneurs of the first-generation inscriptions, whether in China or overseas, successfully continue their glory in the rune circle? I am waiting and watching. I hope that there will be some new builders in this wave, like Solv, with new good product designs and good DeFi solutions accumulated on Ethereum for many years, and some NFT solutions to empower this layer of Bitcoin ecology. The Bitcoin ecology should not be just a group of people like Leonidas who are still doing his things. This is what I don't want to see. I am also exploring to dig out some senior builders from various other ecosystems. Runes are an asset, and everyone must have a consensus on the asset target. So I think it is the most practical thing to do a good application on it and improve the user experience.

Ryan Chow：From the perspective of Solv, we are doing DeFi, and we are doing a liquidity layer based on Bitcoin, so from the perspective of the protocol, we are not involved in Runes. I personally bought some. Overall, I basically found some, and I think this is very interesting, but I am definitely not as professional as Charlie and Jeff in this regard.

Let me briefly share one of my thesis. That is to say, I actually found some supporters of Solana who play Meme, and then I first asked them what their overall status is now? Because Runes is an asset initiated by Europe and the United States that is a bit like MEME. So I communicated with them and asked, as a whole, do you play Solana's MEME recently? And then inscriptions, runes, what do you think of these runes now? What do you think of the BTC ecosystem? I think the feedback I got is still very optimistic. Basically, they are a bit like Solana, and strictly speaking, they also belong to a group ecosystem.

Like BOME, and some others I forgot, there are several, the recent MEMEs, and BONK, these are actually some things that they or their friends have participated in making, so they have a very deep circle to reach a consensus, that is, they think that Bitcoin's rune assets like MEME are actually very imaginative, and they are very bullish on such an asset in the entire Bitcoin ecosystem. So I think in this matter, they have withdrawn most or more than half of the funds from Solana's MEME to the rune assets. I think this is actually a pretty good signal.

BMAN:I also speculate on MEME, and I can feel the enthusiasm of this community, and gradually turn to Runes. I think it is still quite interesting.

Jeff：I might just throw some cold water on this. I think first of all, whether it is Runes or BRC-20, it is just a protocol for issuing fungible tokens, just like ERC-20. After ERC-20 came out, no one actually cheered for the fungible token protocol anymore, because I think, that is, we already have ERC-20 to issue coins. Whether it is TRC-20 or BEP-20, everyone will treat the new coin issuance protocol as a new coin issuance protocol. The reason why everyone cares so much is that there has never been a coin issuance protocol on Bitcoin before.

So from last year's BRC-20 to this year's Runes, everyone will have a kind of shift in attention, and will think that this is a very cool thing, a very new thing, so this is normal. But secondly, I think in the long run, I may have to correct my previous judgment now. That is, I thought that Runes would not have a big impact on BRC-20 after it came out. I think this is a wrong prediction at present, right? If the prediction is wrong, you should actually take a look. Why? I think it is mainly because BRC-20, first of all, has a smaller number of good tickets, or the targets that can be hyped, but Runes has a longer number of digits, so it gives many developers a relatively wide space. Secondly, because it has a function like pre-mint, the way many projects can combine operations has changed significantly. At the same time, because Runes is an asset protocol led by overseas, in the early days, like the current RSIC and Runestone, they will have a lot of attention overseas, and people in other communities are also more willing to accept it, or willing to buy it, willing to take over, so its overall momentum is very good now.

Back to today's point about the second layer, I think that its challenges and opportunities coexist. This is of course just today's point of view. I think the challenge is that people on the first layer are not willing to cross similar rune assets to the second layer. Because it is not so inconvenient to trade rune assets on the first layer at present, it may indeed have some costs, but most people are trading in the coins that are particularly popular. Then the user may think that if I buy a transaction order of 5,000 US dollars or 3,000 US dollars, I pay 50 US dollars, which I can accept. I don't know if anyone here is working on the Rune Bridge. We already have some runes in it, but we haven't built the Rune Bridge yet. But I personally think that users on the first layer today are not willing to put the runes on the second layer for trading. It doesn't hurt them. And everyone has a natural distrust of such bridges. I think this is normal. For example, BRC-20, many people are not willing to transfer BRC-20 to the second layer. Anyway, either my coin is dying, I won't sell it on the first layer, and I can't sell it on the second layer. This means that this coin has been listed on the exchange, so I will bridge it to the exchange. This is probably the case.

But what do I think is the opportunity? The opportunity is that you will find that the Runes that came from BRC-20 will also go the same way. What does it mean? That is, there will definitely be some top coins, which will be hyped up very high, and then they will be listed on centralized exchanges. Then, a large number of coins, like ORDI and SATS, are stored in centralized exchanges today, and then they become a MEME in centralized exchanges, and everyone can speculate on them. Because the users on the chain and the users of the exchange are very non-overlapping, this user group will have a full turnover, and eventually the coin will become the coin of the exchange. Many of the big ORDI users who came to us to pledge before actually don’t use Unisat at all, because the entire process of buying this coin is completed on the exchange.

However, after these top coins are listed on centralized exchanges, the remaining coins will have a very obvious liquidity depletion, because the middle and tail coins on the first layer are actually very difficult to hype up. Its overall transaction efficiency, including the efficiency of asset distribution, leads to its very high early cost. Just think that the cost of the entire issuance and friction of this coin may be like BRC-20. You see, there are at least 10 coins, and its issuance process has cost tens of millions of US dollars. In fact, this cost of tens of millions of US dollars is a cost in the minds of users. Therefore, its liquidity in the secondary market must be very good to make up for these costs and allow it to continue to rise. So you will find that BRC-20, except for ORDI and SATS, has been cut in half or even cut at the bottom today. In addition to these two tokens, other communities have more or less encountered relatively large problems, and their liquidity is very poor. So where are the opportunities in the second layer? You will find that whether it is Solana's MEME or the MEME on Base, its entire asset issuance process, such as who will participate, whether everyone will come together to crowdfund, or airdrop, etc., its entire participation process is very smooth and the cost is very low.

The second is to build a pool on it, which is DeFi. DEX has been tempered, so it proves that this is the best way to issue, so you build a pool on this second layer, and soon the price can be hyped up. Of course, it may also return to zero very quickly, which we can see every day, but it can also be hyped up very quickly, including the early MEME tokens on Merlin, and its speed of rise will be very fast. Then at this time, more people who issue this MEME coin will think that if I issue it on the first layer, either I will pay hundreds of thousands of dollars or millions of dollars, or users will pay hundreds of thousands of dollars or millions of dollars. Then you will find that BRC-20 has verified before that this model is inefficient, so this may be an opportunity for this rune on the second layer. Of course, it is still early to look at all these things today. I think we are actually working on the incubator of Runes recently, and we will take a look at it together with OKX Venture and others.

Whether it is overseas or Asian developers, I think they must have a lot of things to build. But if Runes finally goes back to the old path of BRC-20, and we Layer2 do not provide him with help and empower him, I personally think that if it really happens, I think it is still a pity.

BMAN: On the operation code side, there is an OP_CAT recently, which is actually doing this for the combined script fragment, that is, providing this UTXO with the ability to combine script fragments. Then I would like to ask everyone what aspects of their impact and variable ability on the entire Bitcoin ecosystem will bring about? And do you think it will have some major impacts on the subsequent development of the entire Layer2, such as the overall development?

Jeff：Let me briefly talk about this. This can actually be used to whitewash the situation. It will have a huge impact on the entire ecosystem. But I think that the occurrence of this incident and after it occurs, it will be effective and can be expanded on a large scale after it is effective. The entire cycle is relatively long. Of course, this thing itself is a certain amount of smart contracts that can be run on Bitcoin. It is definitely helpful for the entire ecosystem, including Layer2. But I believe that in reality, its development cycle and its cost structure may not help everyone's ecosystem in the short term.

Now, for all Bitcoin Layer2, as long as it involves a large amount of fund custody, fund security must be the most important part. When we went online in February, many people felt that the funds were not safe, and there would be bugs in the entire deposit and withdrawal process. As everyone knows that so much money is on Merlin, in fact, everyone, including bad guys and hackers, has the desire to attack.

So how to do this part well? In fact, everyone is hoping to find a compromise between stability, security, intelligence and efficiency. Recently, we have seen many projects working on Rune Bridge and Inscription Bridge. We have looked at their solutions and found that they are still quite dangerous. This is also for many developers, that is, the audience here, if you are going to develop Rune Bridge or chain development, in fact, for example, the current index of Rune is only Unisat, and everyone uses its indexer. And everyone knows that the indexer of BRC-20 often has some small problems. There are no fatal problems, but there will be small problems. However, once the bridge, its own liquidity custody mechanism is where the rune of your layer exists, and the entire bridge process is instantaneous. Now that the Rune Bridge is almost finished, should it be delayed or instantaneous? For example, our delay is three days. I think it is very fast among the official bridges of Layer2. Of course, users will definitely think it is not fast enough. Therefore, when many projects are working on the instant bridge, they are equivalent to handing all decisions to the machine. Because there is no multi-party indexing capability, once there is a problem with the intermediate index, or the information on the bridge is biased, the entire machine will actually execute all your runes, and then there may be such a bug in the middle, because the technology itself is not perfect today. Casey also fixed a version of the bug before going online, because the imperfect protocol and imperfect index led to the loss of funds. For example, we now have a Dog rune worth tens of millions of dollars, more than 30 or 40 million dollars on the chain. So I think that in many cases when the technology is not mature, we still have to put stability and security first. In fact, many projects are now promoting the concept of real-time and fast, and I personally still have a lot of concerns. As a developer, this is my personal opinion.

CharlieHu：This is an interesting dynamic in the Bitcoin community, or some debates between different factions on both sides. The radical faction hopes that OP_CAT will be passed as soon as possible, so that many things that may not be done now can be done, but this will have some security risks to a certain extent, and even sacrifice some of the existing basic principles of Bitcoin, so this will make some Bitcoin OG veterans, including those with laser eyes, absolutely oppose some things.

What I recently observed is that a technical OG in the Bitcoin community now has 5 people maintaining the report code of the entire Bitcoin core. He bypassed several of them and started to promote this matter. I think this is equivalent to a joking rebellion in the community. I think this rebellion has something to do with it. There may be some actions before the Bitcoin Conference in the United States in July this year.

As for what we are doing with BitVM, we still have the same view, that is, BitVM is good because it does not require a hard fork, and does not need to wait for OP_CAT and BIP. In fact, it is possible to do proof with the existing upcode and scripting languages.

Assuming that we do not have OP_CAT, we do not have BIP, and Bitcoin does not need to do an overall network upgrade, we can do such a thing. I mentioned earlier that Ethereum has a lot of politics, a lot of human relationships, a lot of politics, and a lot of so-called political system points, such as whether V God likes you or not. I will not talk about this on Ethereum. There are actually some on Bitcoin, but this is more decentralized, such as what one or two people said, including Luke's statement last year that he wanted to get rid of BRC-20. This is actually what he said alone, and of course there will be some arguments, including some quarrels, and these quarrels are for the good of this community and this ecosystem. There will be some so-called consensus, some so-called differences, or even some possibilities of destruction, but in fact, none of them will happen so quickly.

Personally, I am cautiously pessimistic about the implementation of OP_CAT and the promotion of BIP. I think this is a question mark. Is the current Bitcoin ecosystem really developing well?

I also want to discuss with some of our overseas investors and consultants in Hong Kong this time about how the next few months will go. These things will definitely set some tones. How will the Bitcoin ecosystem go after the halving in 2024? I think there will be some things happening between the Hong Kong conference in May and the US conference in July, and we should pay close attention to these aspects.

Whitefish (CKB):First, I think the first layer is the competition of protocols. Runes is one of the protocols. I think it has no essential changes to BRC-20, but only some optimizations of details. This is my most fundamental view. Of course, Casey has made a great contribution. The historical status of Ordinals cannot be shaken. This is very clear. Then for OP_CAT or other opcodes, our team's view has always been very simple. We think the most important feature of Bitcoin is stability. We think the best way for the Bitcoin ecosystem is to do something without hard forks and soft forks, so we will propose RGB++ and use CKB to do such things as a smart contract platform.

I believe that the Bitcoin ecosystem is that although it has fallen so much, I think Bitcoin is the future of the entire industry. Bitcoin is a very free and pioneering space and platform. I think the Eastern Layer2, especially ABCDE, has invested in many projects, including EVM and UTXO. I think we can do a lot of different things, instead of catering to overseas Western capital. Then we often use the metaphor of CKB. Although CKB insists on UTXO, our ideas are different from those of Bitcoin Maximize overseas. Then we feel like pagans in the East, but there are some differences in concepts. Then I think that we Eastern people, or those who recognize this route overseas, can do a lot of things if we unite. And we see that it is very strange on the EVM track. Some of us have already run very far ahead, but overseas still don’t buy it, and then everyone can go to support their own line, which already explains a lot of things.

I think at this time we should also strengthen our confidence in the Bitcoin ecosystem, and don’t distinguish between Chinese and overseas. I think those prejudices should be put down, and then everyone This is our best opportunity to build a public chain.

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