Hello everyone, I'm Paul from Coinmanlabs, and today I want to talk to you about the Layer2-Goat Network for BTC.
Solely for value storage
Since its inception, Bitcoin has been defined as "digital gold". Similar to gold, its main function is to store value, especially with the approval of BTC's ETF, more funds are coming in to buy BTC. Although the concept of Bitcoin-related ecology has long existed, the development of Bitcoin's ecology has been stagnant for more than a decade.
Bitcoin, as a value storage tool, is mainly due to the following characteristics:
Scarcity: Bitcoin's total supply is set at 21 million, which makes Bitcoin scarce. Scarcity is an important feature of traditional value storage tools like gold, as it prevents currency devaluation caused by excessive issuance.
Decentralization: Bitcoin is not controlled by any central authority, which means it is not affected by government monetary policies and does not devalue due to economic crises in any country. This decentralization makes Bitcoin globally stable in value.
Security: Bitcoin uses advanced encryption technology to protect the security of transactions and assets. The immutability and transparency of blockchain technology enable the Bitcoin network to resist fraud and double spending issues.
Global liquidity: Bitcoin can be transferred globally without being restricted by geographical and political boundaries. This high liquidity makes Bitcoin an effective cross-border value transfer tool.
Resistance to censorship: Bitcoin's transaction records are on the blockchain, but user identities are anonymous. This feature makes Bitcoin a tool to evade scrutiny in some countries and regions with strict financial transaction regulations.
Long-term appreciation potential: Since its inception, the price of Bitcoin has experienced significant growth. Despite fluctuations, in the long run, the value of Bitcoin shows an upward trend, attracting some investors to use it as a long-term investment and value storage tool.
Q· Bitcoin unable to fully unleash its potential?
As a decentralized digital currency, Bitcoin has gained a certain level of recognition and usage globally since its inception in 2009. However, despite Bitcoin's many potential advantages such as decentralization, high security, and transparency, it still faces some challenges and limitations in large-scale applications. When Satoshi Nakamoto envisioned Bitcoin as a peer-to-peer electronic cash system, decentralized digital currency could be used as a medium of exchange.
We all know that the appearance of currency greatly simplifies the transaction process and improves economic efficiency. Of course, it's time for Bitcoin to be used as a medium of exchange.
With the approval of Bitcoin's ETF, more traditional or tech companies are using it as company assets or national treasury assets.
According to statistics, there are over $1 trillion worth of BTC in idle state. The reasons for this can be seen in several points:
Lack of native income: Unlike ETH with staking economy, BTC currently lacks low-risk income sources (such as stable staking mining, LST, LRT, etc.).
Lack of cross-chain composability: Any product or asset prioritizes security first, so the current methods of using BTC in DeFi compromise security and decentralization.
Liquidity dispersion: Currently, BTC's liquidity is quite dispersed, such as various wrapped tokens we commonly see, but they do not have any usage scenarios.
Insufficient acceptance in DeFi: Currently, more DeFi projects still prefer to accept ETH and USDC as their first choice.
In terms of market value, liquidity, and institutional adoption, Bitcoin is by far the largest cryptocurrency to date, and its infrastructure is in place. Native DeFi will continue to exist (BRC-20, runes, ordinals, inscriptions, OP_CAT, etc.), and the market needs new narratives, just like ETH's DeFi in early 2020.
Q· Then why not develop Layer2 like ETH?
Bitcoin's Layer 2 solutions, such as the Lightning Network, aim to address the scalability and transaction speed issues of the Bitcoin network, allowing Bitcoin to process more transactions while reducing transaction costs. Currently, these Layer 2 solutions require centralized validators for verification, have poor resistance to censorship, require a lot of computation, and have long withdrawal times. The development and implementation of these Layer 2 solutions also face a series of dilemmas and challenges:
Technical complexity: Layer 2 solutions are more complex technically than the basic Bitcoin network. For example, the Lightning Network requires users to set up and manage their own payment channels, which increases the usage threshold. This complexity can limit access and usage for ordinary users.
User adoption: Despite bringing significant performance improvements to the Bitcoin network, the adoption rate is still a challenge. Many users may not be aware of the existence of these solutions or do not know how to use them.
Capital lock-up issue: In Layer 2 solutions like the Lightning Network, users need to lock a certain amount of Bitcoin in the network to open payment channels. This may limit users' immediate access to their funds, especially when there are sudden changes in fund requirements.
Security considerations: Although Layer 2 solutions aim to maintain the same level of security as Bitcoin, the introduction of new technology may also bring new security risks. For example, if there are flaws in the implementation of payment channels, it may lead to fund theft.
Compatibility and interoperability issues: Layer 2 solutions need to be compatible with existing Bitcoin infrastructure such as wallets and exchanges. Poor compatibility may hinder widespread adoption.
Despite these challenges, Layer 2 solutions are still seen as a key to the future scalability of the Bitcoin network. The developer community, companies, and user groups are working hard to overcome these dilemmas to achieve the long-term sustainable development of the Bitcoin network.
Goat Network
Project website: https://www.goat.network/
Project Twitter: https://x.com/GOATrollup
Project introduction: GOAT Network is a second-layer solution based on Bitcoin, aiming to provide opportunities for Bitcoin holders to generate income.
Key contributors:
Project Analysis
Project Overview
GOAT Network is a second-layer solution based on Bitcoin, aiming to provide income-generating opportunities for Bitcoin holders. Bitcoin's script language is very limited and cannot achieve functions like zkRollup. To address this issue, GOAT Network has proposed a solution based on the Optimistic Challenge Protocol (GOAT-OCP). This solution allows Bitcoin holders to act as operators and guarantors during the withdrawal process, earning corresponding fees. If the operators behave dishonestly, they face the risk of losing locked assets.
The implementation mainly relies on ZKM's Entangled Rollup, which runs duplicate Rollup smart contracts on multiple underlying blockchains to achieve interoperability with a unified settlement layer. By using Entangled Rollup, GOAT Network can support direct deposits of underlying blockchain assets without introducing additional bridging entities.
GOAT Network was designed with modularity in mind, including GOAT Federation, GOAT Nodes, Decentralized Sequencer, Proof Network, and Relayer.
BTC Holders
GOAT Network's Optimistic Challenge Protocol (GOAT-OCP) addresses Bitcoin's limitations in Layer 2 by introducing the BitVM2 mechanism. Specifically, GOAT-OCP uses Bitcoin Script's specific tree structure (known as Taproot) to transform transactions into validity proofs and verify their correctness through these proofs. If the operator (Prover) fails to create the tree structure correctly, the challenger (Challenger) can trigger a transaction to transfer the operator's initial locked assets to the challenger's account. This penalty takes immediate effect, and the operator cannot prevent or cooperate. Therefore, the operator has a strong incentive to act correctly, and most of the time, we can assume they will do so.
Through GOAT-OCP, Bitcoin holders can participate in the withdrawal process as guarantors in Layer 2 and are entitled to receive fees for providing this service. However, if they behave dishonestly, they face the risk of losing locked assets. This provides a way for Bitcoin holders to generate income from holding BTC, allowing their capital to generate returns instead of remaining idle. Thus, GOAT Network's Optimistic Challenge Protocol provides a way for Bitcoin holders to earn income.
Adopting Trustlessly
GOAT Network has achieved a unified settlement layer between different Layer 1 blockchains through Entangled Rollup, without the need for additional trusted entities as bridges. Specifically, GOAT Network integrates the Entangled Rollup network, which serves as a unified liquidity provider for various Layer 1 blockchains.
Entangled Rollup utilizes ZKM's infrastructure and reuses the validity proofs of Rollup transaction batches as bridging transaction receipts from L2 to L1. This allows the target chain to easily verify receipts and complete bridging transactions. By using this Entangled Rollup, GOAT Network can support direct deposits of underlying blockchain assets without introducing additional trusted entities as bridges. In this approach, the deposited assets on the other end can be considered local assets (protected by the consensus mechanism of the original blockchain), enabling local liquidity among all connected blockchains. This unified local liquidity enables GOAT Network to have a very fast launch time and strong community consensus. The unified local liquidity brings stability and higher returns to participants, further enhancing the robustness of GOAT Network.
Hold to Participate
GOAT Network ensures that no single entity has control over the entire network through its decentralized Sequencer network and robust data availability solutions.
GOAT Network's decentralized Sequencer network allows anyone holding Bitcoin to lock and become a node, or delegate their Bitcoin to existing Sequencer nodes. This permissionless mechanism means that no single entity can control the entire network, maintaining the network's decentralized nature.
Furthermore, GOAT Network promotes broad and diverse participation by allowing any Bitcoin holder to directly participate or participate through delegation. This means that regardless of participants' resources or technical expertise, they can contribute to the network's operation and benefit from it. This inclusive mechanism enhances the network's resilience and decentralized nature, ensuring that no single entity has control over the entire network. Therefore, GOAT Network's decentralized nature is ensured through the permissionless Sequencer network and broad, diverse participation, enhancing the network's resilience and decentralized nature.
Token Economics
The total supply of GOAT will reach 1 billion tokens, with 42% of GOAT token supply allocated to Sequencer mining and community mining, providing income for node operators and participants locking Bitcoin in the network. Additionally, 6% is allocated to airdrop activities, and 1% to KOLs (Key Opinion Leaders/Influencers), meaning that 49% of the total supply of GOAT will be distributed to community contributors.
Before the mainnet launch, GOAT Network has also introduced the "GOAT Club" reward program, providing future rewards to Bitcoin holders listed on the "whitelist" holding 0.001 BTC or more, first-day DAPP release partners, and Sequencer node operators locking Bitcoin to protect network security.
Latest Developments
GOAT Network claims that it has received commitments of 5,000 BTC (worth $287.5 million) from five institutional node operators to date. According to the team, the network plans to launch with the assistance of seven node operators and expand to dozens over time, aiming to secure more commitments to ensure sufficient liquidity to support its Bitcoin income and DeFi ecosystem.
Income will come from various sources, such as gas fees in BTC, mining rewards in GOAT tokens, and returns generated by yBTC (yBTC is a receipt token received after locking BTC on the GOAT network, which can be used to unlock more income opportunities within the GOAT network ecosystem).
GOAT Network plans to launch a Series A financing round soon, aiming to raise $5 million at a valuation of $100 million.
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