一、 Background
1. Industry structure
The Layer 2 ecology of ETH is booming, with various solutions competing with each other, and almost every Layer 2 TVL reaches a million level. For example, Optimism and Starkent have been valued at more than $8 billion with their excellent Stack solutions and novel technology. And the recently developed Linea and Base, backed by Metamask and Coinbase respectively, will undoubtedly flourish with their capital and resources.
However, in sharp contrast to the unprecedented boom of ETH Layer 2, the Layer 2 ecology of BTC is extremely depressed. While bitcoin is worth three times more than Ethereum, its fee income is only one-eighth of Ethereum. The root cause of bitcoin’s ecological malaise is that it only supports asset issuance, not settlement, and does not require it to take revenue from transaction fees.
That’s why we think bitcoin needs a Layer 2 solution more urgently than Ethereum.
Fortunately, the Taproot upgrade has enabled the development of a Tier 2 solution on Bitcoin. By supporting the threshold signature scheme, a fully decentralized Bitcoin layer 2 has become a reality. While Taproot has made Tier 2 possible, progress is far from optimistic.
Take the leading Bitcoin Layer 2 Stacks, for example.
Compared with major Ethereum Layer 2 solutions such as Arbitrum, Stacks has a market value of just $800 million. Moreover, the number of projects in Stacks ecology is only one third that of those in Arbitrum, with few projects and lack of innovation. This certainly means a huge opportunity in the bitcoin Layer 2 space.
2.Ecosystem requirements
In addition, as demand for the foundry of high-value BRC 20 assets has surged, assets issued in bitcoin have become increasingly expensive. The number of BRC 20 transactions has reached the tens of millions. With the exception of a few like Ordi that have received some liquidity after the exchange listing, most Bitcoin tokens do not enter the secondary market, so there is an urgent need for a Layer 2-based AMM DEX to provide liquidity.
In addition, the number of NFT assets on Bitcoin already exceeds the number of NFT assets on Ethereum. However, due to the lack of a secondary market, these NFTs wither like oases in the desert, and bitcoin’s lack of asset liquidity and settlement capabilities has become a stumbling block to ecological growth. Therefore, developing a decentralized Layer 2 solution like Arbitrum is the lifeline for saving the Bitcoin ecosystem.
By taking Bitcoin as a gas fee, compatible with EVM / Metamask, and using Bitcoin light node + Tarpoot + Signal as a distributed threshold cross-chain solution, we have realized a fully decentralized Bitcoin cross-chain, and properly met the above challenges. The technology realization has already taken initial shape, and it is ready to be developed and deployed.
二.Technology implementation
1.Bitcoin light node
Use the Wasm-enabled on-chain bitcoin light node to obtain data directly from the Bitcoin network.
Use the block header to prove the continuity of the hash to verify whether the transaction hash is in the Merkle tree. And the correctness of signatures, execution logic, etc….
2. Primary root threshold signature
Taproot The upgrade consists of three Bitcoin improvement proposals (BIP) that define three different upgrades to the Bitcoin protocol:
1.Schnorr signature (BIP 340): As part of the Taproot upgrade, BIP 340 introduced the Bitcoin Schnorr signature. Schnorr Signature brings a number of benefits to Bitcoin users, including superior privacy, lower fees, and more flexible multiple signature contracts.
2. MAST Contract (BIP 341): The Merkel Chemical Abstract Syntax tree (MAST) is a proposal to encapsulate any number of different scripts in a Bitcoin address. This concept is now a part of the Taproot upgrade. MAST expands the flexibility and practicality of Bitcoin contracts in a cheap and private way.
3.Tapscript (BIP 342): to enable P 2 TR transactions, BIP 342 added and updated multiple operating codes. These new scripts used together to validate the Taproot spending and Schnorr signatures are called Tapscript. Tapscript, Aiming to maximize the future flexibility of the P 2 TR output to allow for as yet unforeseen upgrades.
Taproot Provide a technical basis for Decents decentralization:
1. It breaks through the limit of traditional bitcoin multiple signatures with up to 15 signatures, supports the participation of nearly 1000 signatures, and enables 1000 POS nodes combined with BFT algorithm to ensure the decentralization of Layer 2.
2. The Schnorr signature algorithm realizes transaction aggregation, greatly reducing the amount and cost of transaction data.
3. The MAST contract framework is combined with the aggregated signature algorithm to realize the threshold signature mechanism, which provides a high degree of programmability and scalability for Layer 2.
3. Signal Privacy Agreement
The signal protocol is used to protect the communication of the aggregated Schnorr signature public key / message.
During threshold signatures, use the Signal protocol for private communication between nodes. To prevent eavesdropping and data leakage.
4. MuSig2 algorithm
Taproot Threshold Signature Based on Musig2, Musig2 is a multi-signature protocol with only two rounds of communication. Musig2 Enhanced practicality than the original Musig.
The nodes involved in multiple signatures each generate key pairs, the first round of exchange key, and the second round of exchange signature fragments. Once the signature fragments of all the nodes are combined, the full multiparty signature can be generated.
MuSig2 It can support the participation of a large number of nodes, realize a fair key aggregation mechanism, and generally improve the scalability and efficiency of multi-party signatures in the Bitcoin network.
5. The EVM is compatible with, and uses the BTC as a natural gas
We adopted the Substrate framework to set BTC as a native Gas system contract and ported it to the EVM platform, making Decents an EVM system with BTC as the native GC.
Why do we do this?
First, using BTC as a gas can maximize the integration with BTC ecology, allowing BTC users to easily use Layer 2 simply by holding BTC. In addition, the Decents order nodes can charge a BTC transaction fee as an incentive. Second, BTC is compatible with EVM systems because BTC needs a Turing-complete smart contract platform to provide settlement functions for the assets issued on it. And, the EVM ecosystem accounts for more than 90% of the smart contract market. Compatible EVM provides access to the most comprehensive on-chain developers and user communities.
三． Compare
Knowing our unique technologies, let’s see why these technologies offer more advantages than tBTC.
1.Use the MuSig2 instead of splitting the private key to reduce the risk.
Shamir Secret sharing is a method to split private keys into multiple parts (n), which can realize the distributed storage of private keys. As long as more than m copies are collected, the complete private key can be reconstructed.(M <n, usually =1 / 2 n) However, once the key is leaked or lost, it is difficult to derive the original private key. Therefore, we propose to use MuSig2 to effectively reduce the risk.
2. All of the validators on the Threshold Network are on the chain.
The verifiers of the threshold network are all on the chain, which does increase the trust and avoids the defects of the opacity and easy operation of the distributed network under the chain.
3.Get data from the BTC network using Bitcoin light nodes.
If we use the data predictor, the data is transmitted from under the chain to the channel on the chain. The prophet has a trust problem: what if the prophet manipulates or tamper with data, or gathers under the chain, causing the risk of centralization? So, in our system, we use the BTC light node on the chain to get data directly from the Bitcoin network to avoid trusting third parties (Oracles).
4. Communication in the BTC threshold network was implemented using the Signal protocol.
Signal protocol is a secure communication protocol based on symmetric encryption and Perfect Forward Sophisticated, which can prevent the communication content from being eavesdropping. Using Signal can avoid the risk of data leakage, collusion, or external attacks when threshold signatures appear.
DECENTS A technological breakthrough will also represent a redefinition of the value of Bitcoin. DECENTS The future will bring unprecedented opportunities to Bitcoin miners and developers, and will also drive the deep development of cryptocurrencies.
