Comprehensive Research Report on Fractal Bitcoin

Abstract

Fractal Bitcoin was launched on September 9, 2024, as a native scaling solution for Bitcoin. It employs a unique hybrid mining model that combines merged mining and permissionless mining, providing a new perspective on proof of work. Fractal offers developers a valuable testing environment and has initiated numerous innovative experiments by activating OP_CAT. Through collaborations with OKX and UniSat, Fractal has successfully attracted one of the most active user bases in the Bitcoin ecosystem. Its grassroots and community-oriented strategy, along with integration with the BRC-20, Ordinals, and Runes communities, positions Fractal at the forefront of the current Bitcoin trend.

1. Introduction

Fractal Bitcoin is the only Bitcoin scaling solution that recursively extends infinite layers using the Bitcoin Core code. It is built on the world's most secure and widely held blockchain, providing a new perspective for long-term Bitcoin scalability discussions.

The Fractal mainnet officially launched on September 9, 2024, achieving significant success. Within 24 hours of launch, Fractal's joint mining accounted for over 40% of Bitcoin's total hash rate, with free mining contributing 2% of Bitcoin's hash rate. Large mining pools such as F2Pool, Antpool, and Spiderpool have joined the Fractal mining ecosystem, demonstrating high confidence in the project.

2. Core Concepts and Technologies

2.1 Native Bitcoin Expansion

Fractal, as a native extension of Bitcoin, utilizes existing codebases and modifies block production parameters to maintain full compatibility with the Bitcoin mainnet. This approach strikes a balance between innovation and upholding the fundamental principles of Bitcoin.

2.2 Technical Specifications

• Block time: 30 seconds, significantly improving transaction confirmation speed and network throughput
• Mixed mining mechanism: two permissionless mining blocks and one joint mining block.
• Scalability: Theoretically supports infinite layers of improvement, with each layer providing a 20-fold increase in capacity.
• Smart contract functionality: Achieve Turing-complete smart contracts through OP_CAT
• Parallel Execution: Allows different applications to run their own optimized instances
• Compatibility: 100% compatible with Bitcoin standards ( such as BRC-20 and Ordinals)

2.3 Unique User Experience

The wallet address on Fractal is exactly the same as the mainnet address, and users only need to switch networks in UniSat or OKX wallets to access different levels. This design offers convenience similar to Ethereum, simplifying the user experience.

3. The Position of Fractal in the Bitcoin Ecosystem

Comparison of 3.1 with Other Bitcoin Solutions

• Compared to EVM-compatible Layer 2, Fractal adopts a native Bitcoin approach, which may align more closely with the ideals of Bitcoin purists.
• Unlike Bitcoin Cash (BCH), Fractal embraces the Bitcoin mainnet and seeks local scaling.
• Compared to the Lightning Network, Fractal offers comprehensive smart contract support without the need for channel management.

3.2 Market Strategy and Built-in User Base

• Supported by approximately 1 million weekly active users of the UniSat wallet.
• Focus on trading volume rather than TVL as the core metric
• The built-in user base gives Fractal a significant advantage in competition.

4. Ecosystem Construction

4.1 Decentralization Concept

• Encourage diverse cross-chain bridge solutions
• Open development environment
• Community-driven governance
• Distributed infrastructure

4.2 Launch User and Developer

• User Reward Program: Distributing 1 million FB tokens to over 100,000 eligible addresses.
• OKX Wallet Partnership
• Developer Incentive Program

4.3 Funding Programs and Project Evaluation

• Adopt a retrospective mode
• Evaluation criteria include ecosystem contribution, technological innovation, and long-term impact potential.
• Support for diverse project types

4.4 Outstanding Funding Projects

• sCrypt: Enhanced scripting capabilities
• F2Pool: provides mining support
• Nubit: Development of Data Availability Layer
• DeTrading: Supports trustless cross-chain swaps
• UniWorlds: Development Virtual World Toolkit
• FractalEcosystem.io: Community-driven project directory

4.5 Future Outlook

• Extended Funding Program
• Deepen community engagement
• Explore potential use cases such as advanced DeFi protocols and enhanced NFT functionalities.
• Develop scalable infrastructure
• Enhance cross-chain interoperability

5. Token Economics and Economic Models

5.1 Token Details

• Name: FB( Fractal Bitcoin )
• Max Supply: 210 million coins
• Total Supply: 105,153,225.00000000
• Circulating Supply: 1,213,225.00061300
• Main use: transaction fees ( within the Fractal ecosystem )

5.2 Token Allocation

• Proof of Work Mining (50%)
• Ecosystem Reserve Fund ( 15% )
• Community Reward (10%)
• Pre-sale (5%)
• Advisor Pool (5%)
• Core Contributor (15%)

5.3 Release and Lock-up Period

• Presale and core contributor tokens: 7 months lock-up period, followed by 5 months of linear release
• Ecosystem Reserve Fund and Community Rewards: A maximum of 10% will be released each year over a period of 10 years.
• Advisor Token: A maximum of 20% will be released each year over 5 years.

5.4 Transparency and OP_CAT Governance Voting Mechanism

• Announce the official address for each token distribution category
• The plan is to adopt a governance voting mechanism based on OP_CAT.

6. Team and Partners

6.1 Core Contributors

• UniSat: A leading Bitcoin wallet with over 900,000 weekly active users.
• Block Space Force: Co-founders have experience in building and scaling world-class projects.

6.2 Developer Platform Partnership

• Collaborating with the Scrypt team to build a smart contract meta-protocol on Bitcoin

7. Challenges and Risks

• Programmability: The use of Bitcoin scripts may limit the number of developers.
• Technical Risk: Modifying the core parameters of Bitcoin may introduce vulnerabilities.
• Adoption risks: convincing users and developers to shift from existing solutions can be challenging.

8. Conclusion

Fractal Bitcoin represents an innovative approach to extending Bitcoin's functionality, with advantages such as native integration, technological innovation, and a strong built-in user base. Despite facing challenges in programmability, technology, and adoption, Fractal still shows immense potential. Its success could profoundly impact the future development of Bitcoin and the entire blockchain ecosystem. Investors and users should closely monitor its technological development, ecosystem growth, and market adoption.