Written by: 1912212.eth, Foresight News
ZK products and related protocols are springing up like mushrooms after rain, and even parallelization is gradually becoming a trend. We see these two concepts appearing on L2 and public chains, but they are rarely combined on Bitcoin.
This is of course due to Bitcoin’s own factors, such as the limited scripting language, the lack of statefulness of data, and the lack of a native execution environment that can run complex smart contracts. For this reason, there are still very few people who dare to build a challenging basic execution layer on top of it.
Recently, Arch Network, a Bitcoin native application platform, completed a $7 million seed round of financing, led by Multicoin Capital, with participation from OKX Ventures, CMS Holdings, etc. Arch was created to build the basic execution layer of Bitcoin.
Introduction to Arch
There are numerous L2s emerging day by day. So far, there are more than a dozen L2 solutions. However, L2 essentially involves the process of bridging between developers and users, and users need to have a certain degree of trust in the bridge and L2. In addition, another obvious disadvantage is that liquidity will become fragmented, which will have an adverse impact on the entire ecosystem.
What Arch wants to do is not Bitcoin's L2, but to introduce programmability directly to Bitcoin. Arch Network is a parallelized PoS network that uses ZK proofs to enhance Bitcoin's native programmability. The network consists of a Rust-based zkVM (called ArchVM) and a decentralized validator network.
Arch draws inspiration from Solana and SVM (Solana Virtual Machine) and does not rely on any bridge or L2. It has three characteristics: programmability, parallel execution speed, and trustless interoperability and composability.
Operation Mechanism
In the Arch network, asset transfers and state changes on the Bitcoin chain all occur on Bitcoin L1. Arch uses ordinals through the "state chain" on Bitcoin L1 to submit state changes in a single transaction, thereby reducing fees and ensuring atomic execution.
A specific transaction process is as follows: Arch calls Bitcoin transaction information, which contains basic information for execution, including the latest status, partially signed Bitcoin transactions (PSBT), and smart contract inputs. The Arch indexer constantly monitors new Bitcoin blocks and checks each transaction in the new block to see if it conforms to the call format.
When the above transaction is detected, Arch compiles the relevant details and proceeds to execute the smart contract. The smart contract then generates a result state and an unsigned transaction to feedback the asset transfer in execution, as well as a proof of verification of the smart contract execution. Everything is then transmitted to the validator network, specifically to the leader node. During each Arch Epoch, a leader is randomly selected, and the leader node propagates the received information to all other nodes in the network.
Each node performs proof verification and incorporates the state changes into the transaction before endorsing said transaction. The leader consolidates signatures from these nodes until a predefined threshold is reached. Finally, once the transaction is signed by the necessary number of nodes, it can be broadcast on the Bitcoin network.
Currently, Liquidium, a lending protocol on Bitcoin, has been integrated into Arch, reducing its reliance on third-party oracles and technology service providers and optimizing user experience. In addition, DeFi, stablecoins, oracles, etc. can also be developed based on Arch.
Transaction Fee Model
Arch charges users for every BTC transaction processed by its infrastructure. The transaction fee model operates in a way that includes multiple mechanisms, among which "per transaction fee" charges users fees, including operations such as deploying smart contracts, trading, and minting NFTs. "Dynamic pricing" is equivalent to a tip for the fast lane, which is dynamically adjusted based on network congestion and the complexity of the transaction.
The various fees collected from the above parts are then used to develop the network through "fee distribution", part of which is allocated to node operators or validators, and the other part is invested in Arch infrastructure development and optimization.
Although the official governance token and roadmap have not yet been announced, its core will focus on the development of smart contract infrastructure and the expansion of the decentralized node network. Currently, Arch will start with a selected group of trusted nodes, and after ensuring stability and security, it will incentivize the community to participate in the expansion.
