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Jumped on board with $CKB, let's discuss some superficial understandings of the Bitcoin L2 track:
The design goal of Bitcoin L2 is not only to solve the liquidity problem of on-chain assets but also not just to unlock the on-chain liquidity of Bitcoin. Instead, it aims to activate the commodity attributes and intrinsic value of Bitcoin's mainnet block space by enhancing Bitcoin's programmability, bringing a new choice beyond the trustlessness of Ethereum's mainnet block space to the entire crypto industry.
Why is this said?
First, the total MCAP of on-chain assets is too small to support the value of many Bitcoin L2s.
According to Coingecko's data, the total MCAP of the BRC20 sector is $2.808 billion, combined with the total MCAP of Ordinals NFTs at $1.35 billion, the total MCAP of the entire on-chain track is only $4.158 billion, equivalent to only a medium-sized Ethereum L2 or an FDV of a chain abstraction project.
The liquidity of leading BRC20 assets is concentrated in CEXs, and the liquidity of leading Ordinals NFT assets is concentrated in OKX NFT market, Magic Eden, and Unisat.
These leading projects do not have as strong a demand for on-chain liquidity as imagined. For example, in the BRC20 assets, such as RATS, their community is thinking day and night about listing on Binance rather than cross-chain to a Bitcoin L2 for DEX liquidity.
In fact, as with the Turing-complete public chain ecosystems such as Ethereum and Solana, it is mainly the long tail on-chain assets that need AMM Swap.
Second, the Bitcoin community believes in "not your key, not your coin," resulting in only ~10% of the Bitcoin supply being held in CEXs, 4.22% being held in Bitcoin spot ETFs, and the vast majority of Bitcoin being held in holders' cold wallets.
Therefore, whether it is through the destruction of BTC to abstract economic security like Bitcoin L2 Stacks, or plans to implement a Staking-Slash mechanism through a combination of cryptographic methods and Taproot-based multi-signature script-controlled treasuries like Babylon, it will encounter significant resistance in the conservative Bitcoin community.
Moreover, before the concept of Bitcoin L2 emerged, the Lightning Network had already effectively addressed the trustless exchange problem of Bitcoin.
As Pantera mentioned in its investment research report, the explosion and growth of the on-chain ecosystem made the market realize the possibility of Bitcoin's programmability, rediscovering the "Bitcoin mainnet as technology" narrative beyond the "digital gold."
Therefore, the core design goal of Bitcoin L2 is not to unlock liquidity but to achieve the renaissance of Bitcoin's programmability.
The birth of numerous Bitcoin L2s will enable the Bitcoin mainnet to sell block space to Bitcoin L2s just like the Ethereum mainnet, not only bringing stable and sustainable additional income to Bitcoin miners after the fourth halving but also benefiting from the competition of the Bitcoin mainnet joining block space producers. It is also conducive to changing the developer's lying-flat and tax-profit phenomenon caused by the monopoly of the Ethereum mainnet and the appearance of rent-seeking economization. |
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Post time 1-4-2024 21:14:34