Bitcoin Ecosystem and Inscription Craze: The Innovative Path of Established Projects

In 2023, the cryptocurrency market witnessed the strong rise of Bitcoin and the vigorous development of the inscription ecosystem. The increase in Bitcoin's price is attributed to multiple factors, including the prosperity of the on-chain ecosystem, expectations for spot ETFs, the approaching halving cycle, and the potential rate-cutting policies of the Federal Reserve. At the same time, the massive entry of institutional investors has also provided significant momentum for Bitcoin.

The inscription ecosystem, especially represented by Ordinals, non-fungible tokens (NFTs) and fungible tokens (FTs), has not only injected new vitality into the Bitcoin ecosystem but also influenced the development of other public chains. Almost all mainstream public chains have developed their own inscription gameplay, and many established projects have also seized this opportunity to rejuvenate.

Bounce: Auction Innovation and Layer 2 Planning

Bounce Finance, as a multi-chain supported Auction-as-a-Service (AaaS) protocol, has recently achieved significant results in the auction of Bitcoin ecological projects. Several Bitcoin-related projects launched on the platform had low initial valuations, but as the auction process progressed, these projects performed excellently, which also drove up the price of Bounce's native token AUCTION.

The recent GoDID project auction is a typical example. As a market aggregator for decentralized identity (DID), GoDID's token distribution plan makes full use of the tokens from earlier projects, creating a mutually reinforcing ecosystem.

In addition, Bounce also announced the BounceBit project, which is a blockchain solution designed specifically for the Bitcoin ecosystem, scheduled to launch in 2024. This initiative demonstrates Bounce's ambition in the Bitcoin Layer 2 space.

Uniswap: Extending to the Bitcoin Sidechain

As a leader in decentralized exchanges (DEX), Uniswap has recently deployed its V3 version onto the Bitcoin sidechain Rootstock through GFX Labs. This move is seen as an important step for Uniswap's expansion into the Bitcoin ecosystem.

Rootstock (RSK), as a Bitcoin sidechain compatible with the Ethereum Virtual Machine (EVM), ensures security through merged mining and a joint guarantor model. Recently, the liquidity of Oku (a trading frontend built on Uniswap V3) on RSK has reached $535,000.

Magic Eden: Entering the Bitcoin NFT Market

Originally focused on the Solana ecosystem's NFT marketplace Magic Eden, this March announced its expansion into the Bitcoin ecosystem. This strategic move is an important part of its multi-chain development plan, further consolidating Magic Eden's position in the multi-chain NFT market.

Currently, Bitcoin ecosystem NFT projects such as bitmap and Bitcoin Frogs have shown outstanding trading volumes on the Magic Eden platform, demonstrating the platform's successful expansion in the Bitcoin NFT space.

Nostr: Social Protocol Combined with Micropayments

The decentralized social protocol Nostr underwent a significant upgrade in September this year, introducing a small payment feature called "Zaps." This feature allows users to make quick, low-cost micro-tips or payments through the Nostr client, primarily relying on the Lightning Network.

Since the launch of the feature, the number of payments made with Zap has exceeded 50,000, demonstrating the potential of combining decentralized social networking with micro-payments.

ALEX: BRC20 Trading and Oracle Development

Originally a DeFi platform on Stacks, ALEX developed a decentralized exchange called B20 specifically for trading BRC20 tokens in response to the inscription craze. The platform allows users to use sUSDT (USDT cross-chain from the BNB chain to Stacks) as the base currency for BRC20 token trading.

ALEX also plans to launch the first Bitcoin oracle for BRC20 tokens, aimed at leveraging the programmability of Stacks and the ability to read Bitcoin states, to lead the decentralized consensus of BRC20 indexing.

Development of Public Chain Inscription Ecosystem

Inscription technology is not only prevalent on Bitcoin but has also expanded to multiple public chains. Ethereum's ETHS, Solana's SOLS, Avalanche's AVAV, etc., are all representatives of inscriptions on their respective public chains. This expansion has even led to temporary outages on some networks such as Arbitrum, TON, and IOST.

However, the significance of issuing inscriptions on smart contract chains has sparked discussions. Taking Ethscriptions on Ethereum as an example, while it may be more economical than traditional smart contract transfers in certain cases, it may also introduce new security issues and is not as flexible in functionality as smart contracts.

Conclusion

The development of the Bitcoin ecosystem has sparked innovation in multiple projects. Bounce has created significant economic benefits through its unique auction mechanism; Nostr combines decentralized social networking with micro-payments; ALEX has developed a BRC20 trading market and plans to launch a Bitcoin oracle; Uniswap and Magic Eden have expanded their respective businesses into the Bitcoin ecosystem.

Although inscription technology is widely used across various public chains, its significance and value differ on different types of blockchains. For non-smart contract chains like Bitcoin, inscription technology has introduced a new way of asset issuance; while for smart contract platforms like Ethereum, inscription technology may bring new challenges and opportunities while also reducing costs.