MEME become a trend, why can't the BTC ecology replicate the diverse gameplay of the ETH Fang ecology?

After the inscription market became popular, many people invested too much in BTC L2, thinking that BTC 2nd floor would be as brilliant as ETH Workshop layer2?

However, the fact is that the "success" of the BTC ecosystem may be stagnant in the narrative stage of "asset issuance" for a long time, and it may not be feasible to replicate the ecological diversity of ETH Fang. Why? Let's share a few technical logics:

BTC and ETH Fang belong to two heterogeneous chains, the former is a "stateless" chain, and the latter implements complex composable financial business logic based on smart contracts.

In order to copy the various financial games such as DEX, Lending, Derivatives, and Aggregator on ETH Fang to the BTC chain, the key is to build a programmable "state + calculation + verification" capability for BTC.

• Status: At present BTC UTXO collection can only calculate the real-time "balance", historical balance, and historical record, which constitute the basic state of the contract.
• Computing: The UTXO unlocking conditions in the BTC Pubkey script can be regarded as its core computing power, but this computing power is very limited, and it is difficult to express complex business logic.
• Validation: BTC network full nodes can verify information such as UTXO balances and script signatures, but only on the basis of these basic verifications, BTC the network can't even verify the exact execution of these logics.

In short, in order to realize complex financial applications on BTC, it is necessary to extend based on the limited "capabilities" of BTC and build a programmable framework with "state + calculation + verification".

Looking back at the ETH Fang scaling route, we have gone through multiple routes such as Plasma, Rollup, and Validium, and finally chose Rollup as the mainstream, while the earliest block size adjustment of BTC's expansion, SegWit, etc., has long come to an end, and is currently mainly in the legitimacy dispute of sidechain Stacks, client-side verification RGB, and state channel verification Lightning Network.

Since Plasma's sidechain can't support smart contracts, validiums are too independent to inherit the security of mainnet. The ETH key is that the mainnet rollup contract can be verified by the mainnet validators, and Layer 2 users also have the right to challenge and withdraw funds. Although some aspects of the actual practice process are not satisfactory, in theory, the rollup solution has also gained mainstream market consensus.

For reference, BTC sidechain, client verification, and state channel verification are currently developing into different factions:

• Sidechain Stacks supports smart contracts and has a wide range of application types, but it is an independent consensus outside the BTC and is difficult to be unanimously recognized by the public;
• Client-side verification RGB follows the mainnet UTXO model, and off-chain clients can process more complex transactions, but it and the BTC mainnet do not have two-way checksum constraint capabilities, and the development momentum is not yet climatic;
• The state channel Lightning Network is regarded as a relatively orthodox scaling track at this stage due to its proximity to bitcoin core developers, but the development of the Lightning Network is too slow, and a new Taproot Assets has recently been released, and the result is only an asset running on the mainnet, and it is difficult to say whether it will actually land on the Lightning Network.

If we compare it with the model of ETH, a mature layer2 is at least protected by the security of the mainnet, and the expansion effect should be obvious, and the most important thing is that it can run smart contracts in multiple scenarios. Using this as a standard, sidechains, client validation, and state channels all seem to fall short of the standard.

• Protected by Mainnet: Lightning Network > client-side verification > sidechains;
• Scalability effect: sidechain > client verification > lightning network;
• Contractual features: Sidechain > client-side verification > the Lightning Network.

The new tenets of the scaling route are clear: if security is the standard, then you have to wait for the Lightning Network to grow to scale, if you only want to scale, then don't try to rectify the BTC, a suitable sidechain can solve all problems, and if you want to do all three, client-side verification RGB is the best solution.

The question is, which route is worth entrusting BTC Layer 2 vision?

1. Side chain, although it can be done, but this is an independent consensus chain, and the ETH Fang is no different, the logical paradox has appeared, we already have a super smart contract verification network like ETH Fang, why do we want to build a new BTC side chain? Let the BTC guard the position of its value storage chain, and other ETH similar chains to expand the development imagination space, isn't it more perfect?

2. Client verification, similar to ETH Fang's Rollup, the comprehensive performance of RGB client verification is more suitable for BTC mainstream expansion, this market is the same as its name, it is still a "black box", it is still unknown to what extent it can develop, and it is not possible to make a premature conclusion;

3. State channels, due to the legitimacy of Lightning labs, the Lightning Network was once given high hopes for scaling BTC. However, after Taproot Assets, the Lightning Network's bias towards payment networks will eventually lead to a sidechain solution that favors the ETH Plasma payment network, and it may be difficult to become a layer-2 that can undertake a variety of financial plays.

In essence, trying to copy the diverse financial gameplay of ETH Fang to BTC is a bit too hasty. The extension space of the BTC ecology may be very large, but it may not be copied from ETH Fang

Think about it, playing innovation in the ETH workshop is also influenced by the established fundamentalism behind it, not to mention the BTC of doctrine and doctrine will be more stringent?

Above.

The prosperity of the ETH layer 2 is due to the composability of the smart contract itself, which can infinitely combine and stack Lego, and the biggest risk in the whole process is actually consensus overload, but the variety of gameplay in the payload is enough to give developers a broad stage.

However, the BTC layer2 ecosystem, due to its own basic functions is too weak, the expandable space is too rich, and the security consensus itself is too strict. Consensus builds an absolute barrier to BTC, but it is also the root of the limitation of ecological innovation.

Therefore, chaos and contradictions, most capital, institutions, and mainstream user groups will have a feeling of incomprehension.

BTC VC outside the ecosystem hold a huge amount of money but can't get in because they don't know how to talk about the narrative of BTC Build in order to logically Make Sense, and developers in the BTC ecosystem are swaying between various routes and lack a unified development direction.

Although the majority of retail investors are fomo, everyone only cares about the myth of wealth that the inscription may create, and no one cares about Build.

Although the asset issuance route of the ETH Fang ecosystem is diverse, it ultimately revolves around the dark line of "value capture", whether it is VC-driven or retail-driven, there must be value precipitation in the end.

In fact, the BTC ecosystem is the same, the market cannot stay in the boom stage of pure "asset issuance" forever, and there must be continuous technological breakthroughs, some people continue to build, and some projects continue to develop.

This market can't be all MEME.