Author: Chester, Research Lead of UTXO Stack, Source: Byte Yuan CKB
RGB++ Layer is a concept upgraded from the RGB++ protocol, representing a higher level of abstraction that extends isomorphic binding, smart contract capabilities, and bridgeless cross-chain functions to all UTXO chains.With the help of RGB++ Layer, the Bitcoin ecosystem will surely be further enriched. In particular, driven by the RGB++ Layer, the rise of Bitcoin Finance (BTCFi) will lead the Bitcoin ecosystem into a new era of prosperity.
RGB++ Layer has multiple functions and brings many outstanding features to the Bitcoin ecosystem. Its importance can be explained from the following three aspects:
RGB++ Layer is the asset issuance layer of Bitcoin.
RGB++ Layer is the smart contract layer of Bitcoin.
RGB++ Layer is the interoperability layer of the entire UTXO world.
Current asset issuance protocols on the Bitcoin chain, such as Ordinals or BRC20, are far from a perfect design and rely heavily on centralized indexers. Unlike any previous solution, RGB++ Layer can serve as a powerful asset issuance layer for Bitcoin.
RGB++ Layer supports the issuance of various RGB++ assets, including user-defined tokens (UDT) similar to ERC20 and digital objects (DOB) similar to ERC721. Unlike Ethereum, ERC20 and ERC721 are issued and stored by smart contract accounts, while UDT and DOB are stored in Turing-complete UTXO, which means that they are first-class assets on RGB++ Layer, and their status is equivalent to that of Ether (ETH) on Ethereum.
Thanks to the advantages of the UTXO model, RGB++ Layer can create a new paradigm for asset issuance - allowing the same asset to be issued on multiple chains at the same time, with different proportions on each chain. This will provide asset issuers with a high degree of flexibility. When project teams issue tokens, they don't have to worry about losing users on other chains due to issuing on one chain. Instead, they can issue part on BTC, part on BCH, and even part on the Dogecoin chain, thereby extending their influence to the communities of all UTXO chains.
In addition, RGB++ Layer will introduce a brand new asset issuance model called IBO (Initial Bitcoin Offering). This can be understood as the Launchpad for all RGB++ assets. The IBO platform supports the creation of a pool of funds directly on UTXOSwap (a UTXO-based decentralized exchange), enabling newly issued assets to be traded with high liquidity. The IBO issuance method strikes a balance between the venture capital (VC) model and the fair launch (Fair Launch) model, providing a more sustainable approach. It avoids the problem of lack of community interest while also ensuring that the project team remains motivated.
RGB++ Layer leverages CKB's smart contract stack to provide Turing-complete programmability for Bitcoin. With smart contracts, the Bitcoin ecosystem can build a variety of DeFi protocols to create a unique panorama of Bitcoin Finance (BTCFi).
For example, UTXOSwap, as a decentralized exchange (DEX) protocol, is the central hub of RGB++ Layer, bringing together liquidity from various UTXO chains. UTXOSwap adopts intention-based trading as its core, implements the process of off-chain matching and on-chain verification, and uses the parallelism of UTXO to improve transaction efficiency.
If you think UTXOSwap is just Uniswap in the Bitcoin ecosystem, you are wrong. In addition to the basic swap, it also supports limit orders and TWAP (time-weighted average price) transactions because it is intention-based. For example, users can actively express their trading intentions, such as "exchange 10 A tokens for at least 20 B tokens", instead of passively accepting market prices.
Another example is Stable++, a decentralized over-collateralized stablecoin protocol. It will issue the first stablecoin USDPP on RGB++ Layer. Stable++ leverages the powerful Turing-complete programmability of RGB++ Layer to efficiently build overcollateralized vaults and liquidation modules. As a user, you can pledge BTC or CKB to mint USDPP. USDPP is a stablecoin compatible with all UTXO chains, and it can circulate freely within the Bitcoin ecosystem.
In general, the atomicity of the UTXO model enables UTXO to operate like Lego, allowing assets from different chains to interact and combine with each other, thereby stimulating more DeFi innovations. This will drive the development of BTCFi and benefit the entire Bitcoin ecosystem.
RGB++ Layer, as an inclusive layer, can connect all UTXO chains to create a universal interoperability layer for the entire UTXO world. This allows various assets from UTXO chains such as Cardano, Dogecoin, BSV, and BCH to be seamlessly integrated into the Bitcoin ecosystem, breaking down asset silos.
The unparalleled feature of the RGB++ Layer is bridgeless cross-chain (Leap). This mechanism enables assets on a UTXO chain to cross to another UTXO chain without a cross-chain bridge. For example, if Alice wants to transfer her RGB++ assets from the Bitcoin chain to the Litecoin chain, she first needs to spend the Bitcoin UTXO bound to her RGB++ assets. Then, a transaction is constructed on the RGB++ Layer to change the unlocking conditions of the Turing-complete UTXO to her Litecoin UTXO. In this way, the transfer of the asset from the Bitcoin chain to the Litecoin chain is successful.
With this feature, technically, all RGB++ assets can be regarded as universal assets of the entire UTXO world, because there are no longer barriers between chains and assets can move freely.
Imagine this: You can use A tokens issued on the BTC chain to exchange for B tokens on the Cardano chain through a decentralized exchange. You can use Meme coins on the Dogecoin chain to play GameFi on the Bitcoin L2 DApp chain. You can use DOB on the CKB chain to subscribe to services on Nostr, and so on. This brings the interoperability of RGB++ assets within the UTXO world to an unprecedented level.
Looking to the future, due to the existence of the RGB++ Layer, the Bitcoin ecosystem will be connected as an organic whole. Various UTXO-based assets, including inscriptions and runes, will flow seamlessly on the RGB++ Layer, significantly enhancing the liquidity of the Bitcoin ecosystem. BTCFi protocol innovations based on the UTXO model, such as decentralized trading, lending, and mining, will continue to emerge. Ultimately, BTCFi will thrive and lead the Bitcoin ecosystem into a new era of prosperity.
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