Ordinals has gone through more than a year of development. This year, we ushered in the fourth halving in Bitcoin history, and also ushered in a major update in the Ordinals ecosystem - the launch of runes. After the launch of runes, we witnessed the short-lived "rune craze" with soaring fees, the "epic satoshi auction" worth 33.3 Bitcoins, and the suspicion of "Casey hara-kiri" and "Runes are dead, Ordinals is dead". We have witnessed the quiet demise of many Ordinals projects that were still active in 2023, and the emergence of countless Bitcoin Layer 2 projects like mushrooms after rain.

UniSat, the light of the Chinese Bitcoin ecosystem, keeps moving forward with a low-key attitude and always stands at the center of the Bitcoin ecosystem. Whether it is the previous $PIZZA that gave a generous reward to Chinese and foreign Ordinals players, or the Bitcoin native expansion solution Fractal that has been unanimously recognized, concerned and expected by Chinese and foreign Ordinals players recently, UniSat itself has not taken the initiative to make too many marketing moves, but their silent efforts are still known and highly concerned by the market.

Starting out as an open-source wallet and engraving service, UniSat's role has quietly changed in more than a year. How do they view the current Ordinals and Bitcoin ecosystem, and even the future development? What thoughts, persistence, and expectations do they have for the development of Fractal and even UniSat itself? With curiosity about the above questions, BlockBeats contacted UniSat founder Lorenzo. Let's hear Lorenzo's views.

Market Views

BlockBeats: The transaction volume of inscriptions and runes has been shrinking in the past few months, causing many Bitcoin ecosystem players to lose confidence. What do you think caused the sluggish performance of the Bitcoin ecosystem after the launch of runes?

Lorenzo: The market has its own rules. Sometimes, the moon waxes and wanes, things grow old, and it is normal to have ups and downs. It was the same for a few months in the middle of last year. Just keep a normal mind.

For people who do things, lows actually help to accumulate strength. We also felt the changes in market sentiment during the development of Fractal. When the market is hot, there are all kinds of voices every day, and it seems that there are people pulling you in any direction; when the market is cold, these voices are gone, and I can finally "write bugs" with peace of mind, haha.

BlockBeats: There is an interesting "egg-and-chicken problem" regarding BRC-20 and Runes. One view is that BRC-20 and Runes need to be launched on a large scale before the relevant infrastructure can be discovered by the market value. Another view is that BRC-20 and Runes need to mature before a new round of bull market can begin. What do you think about this?

Lorenzo: Last year, we did see the new vitality that the explosion of inscriptions brought to the Bitcoin ecosystem. We also experienced the situation in April and May last year when the system was completely stuck because it could not bear the popularity brought by BRC-20. We had no choice but to sit and wait. So in the long run, if we only focus on the wealth effect and do not consider the infrastructure issues, it is very likely that assets will be out of the circle on a large scale again and again, and the subsequent network congestion and soaring fees will quickly reduce the popularity. In the long run, people will question the practicality of the Bitcoin network and the value brought by protocols such as inscriptions and runes.

We are more concerned about whether Bitcoin can run on a healthy track in the long run. We are not just thinking about making UniSat's products or Fractal's ecosystem better, but whether we can help Bitcoin grow into a system so that all participants can have more opportunities. Only with mature infrastructure can we be ready for a match to ignite the bull market.

BlockBeats: When and under what conditions do you think the next wave of explosive growth in the Bitcoin ecosystem will come?

Lorenzo: The Bitcoin ecosystem has always been on the road. Regardless of wind and rain, UniSat has been running continuously. We are not good at operations, markets, promotions, or marketing, but we have the determination, patience, and calmness to move towards our goals step by step. We have extraordinary confidence in Bitcoin, and we also hope to expand Bitcoin into a more trustworthy electronic cash system through Fractal. We are full of expectations for a more efficient, elegant, fair, and transparent future. As for whether to stand aside or participate in the construction of such a future, it is left to everyone to judge and choose independently.

About Fractal

BlockBeats: Fractal is described as a "Bitcoin native scaling solution" that uses Bitcoin core code for unlimited levels of expansion. What is the biggest difference compared to the many other Bitcoin Layer2 or sidechain projects on the market?

Lorenzo: First of all, Fractal’s starting point is to make Bitcoin better. To borrow the words of a community friend, “You can regard Fractal as Bitcoin’s most loyal assistant. All designs are to solve the practical problems of Bitcoin.”

Fractal is currently the only native Bitcoin expansion solution, using the Bitcoin Core code and maintaining a high degree of consistency with Bitcoin. If other L2 and sidechains are like building another highway, then Fractal can build countless highways parallel to the Bitcoin mainnet. Each road can be used to expand the Bitcoin mainnet or to expand another road. In this way, each road has its own unique value orientation, and you can solve the congestion problem without changing transportation. Our address format is the same as the mainnet address, and we use the original wallets, tools, mining machines, etc. This is why the community feedback is very comfortable and convenient to use Fractal.

Unlike some Bitcoin Layer 2, Fractal will not compete with the mainnet for attention and liquidity, but will be a solution with unique advantages. In the case that the Bitcoin main network cannot effectively support certain features, Fractal will be a good choice.

Fractal is also very suitable to be used as a precursor network for Bitcoin, because it is highly consistent with the mainnet and has been optimized in performance, which is very suitable for complex applications to experiment and innovate as much as possible. At the same time, it allows users to participate and give real feedback in a real interactive environment, which is currently impossible for Signet, Testnet and other Bitcoin Layer 2.

In addition to the technical level, from the perspective of governance, Fractal's governance will be decentralized as much as possible, allowing the community to participate in the decision-making of many major issues. For example, for OP_CAT this time, we decided whether to activate OP_CAT on the Fractal test network and mainnet through online community voting. We are only information providers and executors, listeners to the community, not decision makers.

We will add more channels for effective communication with the community, and hope that any opinions will have a place to be expressed. In the future, we hope that developers, institutions, and communities can form a three-legged situation in the Fractal ecosystem to avoid the situation where the community resists institutions and project parties and affects the development of the ecosystem. This is also true to Bitcoin's decentralized and open principles.

BlockBeats: Why did you think of activating OP_CAT on Fractal? If Bitcoin Core later promotes the OP_CAT upgrade of the Bitcoin mainnet, it may pose some threats to Fractal. What unique advantages can OP_CAT on Fractal show? For example, some specific applications?

Lorenzo: The significance of introducing OP_CAT is to expand the programmability of Bitcoin while taking into account security. We believe that the potential of OP_CAT is still not fully understood by everyone. At the beginning, I also underestimated the possibility of OP_CAT. Thanks to our partner team sCrypt for helping us understand it more deeply. OP_CAT is actually very powerful and allows us to achieve almost all performance on the Bitcoin network.

It is worth noting that the Bitcoin network is a system engineering. The theoretical advantage of a function may be completely different from its practical manifestation in the system. For example, some people have proposed using OP_CAT to verify ZK_proof, but it is not realistic to actually run such a large script on the Bitcoin mainnet. Therefore, we cannot just stay in theoretical research, and it is more important to actually operate it. This is where OP_CAT's advantage on Fractal can be reflected. Fractal's large capacity allows developers to experiment as much as they want, and guarantees extremely low costs for a long time. Many complex applications that are not feasible on the mainnet can be well implemented on Fractal.

I don’t think it should be said that the upgraded mainnet will pose a threat to Fractal, but rather that each has its own strengths. Fractal is suitable as a storage place for less important assets, while the BTC mainnet is suitable for very high-value assets, after all, it is the most secure network. This can encourage asset innovation while avoiding mainnet congestion, and both perform their respective duties.

BlockBeats: Fractal promises to provide a secure and scalable solution. Can you explain how Fractal addresses common security concerns, such as the risk of a 51% attack? How does its architecture ensure future growth while remaining secure and scalable?

Lorenzo: Common 51% attacks are generally divided into two types:

Hiding blocks + empty blocks/excluding specific transactions. Under the Fractal system, joint mining ensures that a normal transaction gets a chance to enter a block every two free blocks. Assuming that the attacker continues to produce empty blocks, all free blocks will be marked as empty blocks, then the network will only degenerate to a normal transaction getting a chance to enter a block every 90 seconds.

The vault uses the delayed difficulty adjustment to produce blocks crazily. Fractal has made adjustments and optimizations based on the dynamic DAA, so that the difficulty adjustment when the computing power fluctuates strongly can better match the actual changes.

In terms of consensus mechanism, we adopt an innovative method called "Cadence Mining". 2/3 of the blocks are produced by free mining, and 1/3 of the blocks are mined by joint mining. Miners can use their existing mining machines to mine Bitcoin mainnet and Fractal at the same time. Joint mining requires high computing power. These computing powers are large enough, which is equivalent to using additional Fractal Bitcoin revenue to incentivize miners while also ensuring network security.

Another security issue that everyone is more concerned about is cross-chain. The MPC solution is our current minimum requirement solution, because we must prioritize the good operation of Fractal and ensure stability while innovating. We are also working with other teams to develop atomic solutions, which means that my assets go directly to the counterparty's wallet, and the counterparty's wallet goes directly to my wallet. There is no third possibility, which completely eliminates the need to trust the platform. In addition, we are also promoting several other technical innovations, hoping to provide more options for everyone.

Asset security is an issue we take very seriously. When choosing solutions and partners, we will carefully consider the pros and cons to ensure safety and reliability. Therefore, some technical routes will be abandoned after attempts. After we publish mature solutions, we can share our exploration and thinking with everyone.

BlockBeats: With Fractal about to go live in September, the community is looking forward to the possible emergence of dApps such as Satspumpfun. In addition to Satspumpfun, what other projects or applications are worth paying attention to in Fractal? What preparations has UniSat made for this?

Lorenzo: From the perspective of everyone's concern, the first type of application should be a bridge, that is, an application that helps assets flow between the Bitcoin mainnet and the Fractal mainnet. Some of these applications emphasize security, some emphasize decentralization, some emphasize atomicity, and some emphasize the need to trust the platform. Each has its own advantages, and there is no perfect solution at present. What we can do is to provide more relatively reliable options so that users have the ability to choose and balance among different options.

The second type of application may be transaction-related, such as native Swap, DEX, NFT Marketplace, etc. Fractal can provide a lower fee rate, faster confirmation, smoother experience, and sufficient liquidity that are more advantageous than the first layer. This is the most intuitive benefit that Fractal can bring. Please note that the low fee rate here is not 10% or 20% off, but a difference of 1/10,000 or 1/100,000 under the same mechanism as Bitcoin. This makes it possible to build projects based on a large number of on-chain transactions, such as relatively cheap props transactions in games, etc.

The third category of applications may be those that have been suppressed on the Bitcoin layer due to the limited block size, such as DID applications, credential issuance applications, voting governance applications, and so on. This type of application targets a large number of users who frequently participate and interact. This type of application can maximize the benefits of Fractal and the consistency of Bitcoin mainnet addresses and private keys.

After the initial stage of Fractal's value establishment, I hope to see more innovative, more interesting applications that are more integrated with the real world or other industries. Bitcoin has a very broad mass base, and I believe there must be a team that can create popular applications for a wider range of people, so that Bitcoin can be connected with the real world. We are looking forward to it and will fully support it.

BlockBeats: Fractal's several rounds of testing have received great attention and enthusiastic participation from both Chinese and foreign communities. Some voices from the English community have expressed concerns that UniSat's construction on Fractal will prioritize BRC-20 over runes. Do you have any response to this point of view?

Lorenzo: Many friends in the community got to know us because BRC-20 entered the Bitcoin ecosystem and then used the UniSat wallet, so they naturally made a deeper connection between BRC-20 and UniSat. It is understandable that everyone has a special feeling for BRC-20.

We recognize the value of BRC-20 and actively promote the technical development of BRC-20 with L1F and other partners. However, we always maintain a neutral and open attitude towards asset issuance agreements. As long as there is user demand and it is beneficial to the overall Bitcoin ecosystem, we will support it. The priority depends on the needs of the community to a certain extent, and we will try our best to achieve it if there is demand.

Not only do we not take a stand on the choice of protocol, but also on products and features, in many cases, even if we think a certain technology is very good and we are fully prepared, we will not take a special stand. For example, we think OP_CAT is an important improvement and we have made technical preparations long ago, but we still launched a wide range of community consultation and voting, hoping to understand everyone's true attitude, rather than acting rashly. The reason is simple: if the community thinks the time is not yet ripe but insists on pushing it, and it gets hurt, who can we blame?

UniSat changes, development and future

BlockBeats: Because UniSat's wallet is so good, people used to compare UniSat with Xverse. But with UniWorlds and Fractal, has UniSat's overall positioning changed?

Lorenzo: UniSat has evolved from an open source wallet to an engraving service, to a protocol contributor, to a developer service provider, to an infrastructure provider, and now to a Bitcoin expansion solution implementer. This staged role change is inseparable from our long-term pursuit. On the solid foundation of Bitcoin construction, we clearly know our direction, and we are neither arrogant nor impatient, and we are moving towards our goal step by step.

At present, we have become the infrastructure provider that the ecosystem relies on. Our API provides services to hundreds of teams, with monthly usage and requests exceeding 1 billion times, and it is still increasing rapidly. You may not think that the traffic cost we pay to developers for API requests every month is even greater than the traffic cost provided by the official website to hundreds of thousands of users for daily access. Under such high-intensity API access, we continue to provide free quotas to more than 95% of development teams. For us, it is our mission to build a good infrastructure to protect ecosystem builders.

At this point, I would like to thank these ecosystem partners for their trust in us. We will continue to move forward with these encouragements. I also want to give a thumbs up to our UniSat Infrastructure team. Thank you for your hard work. You are the best!

BlockBeats: Can you share some of the projects that UniSat is currently investing in or collaborating on? And how will these projects complement Unisat and Fractal to form a more complete business closed loop?

Lorenzo: We are a team mainly composed of engineers, and we are not very good at investing. So far, all our investments are intended to be of substantial help in the direction of exploration. From a long-term perspective, we hope to be more open in investment and invest in more innovative and adventurous teams. This type of investment can help us see the direction of progress more clearly. If we fail, although we lose money, it is a good lesson for all entrepreneurs; if we succeed, it will be a huge help to the community and the ecosystem.

BlockBeats: We know that Fractal will have its own token in the future. Many community friends actually want to know what the differences are between $SATS, $PIZZA and Fractal’s new token in terms of their respective functions and positioning?

Lorenzo: Regarding the positioning of different assets, we still hope to keep our own views for the time being. Overall, we are more focused on the overall success of Bitcoin as a system. If Fractal becomes a truly useful extension of Bitcoin, the value of the corresponding assets will also increase simultaneously. Otherwise, whether it rises or falls, as a purely speculative zero-sum game, it is difficult to bring growing value to participants.

BlockBeats: Some players have noticed that it has become much harder to obtain UniSat Points recently. Can you tell us why this adjustment was made? In addition, players are very concerned about whether there is a way for ordinary people to participate in the Fractal ecosystem and obtain rewards. What advice would you give them?

Lorenzo: In fact, after the engraving rate dropped, contrary to everyone's intuition, the cost of obtaining points actually decreased rather than increased, because the cost of getting 10 points is now lower than the original cost of getting 1 point. From a long-term perspective, we hope that UniSat Point can well reflect the relationship between our users and UniSat. Later, as Fractal's mainnet is launched, more ways to obtain points will be gradually opened.

After the mainnet is launched, we encourage everyone to participate in the quality projects they recognize. Fractal is a PoW consensus mechanism. Friends who are interested and capable can participate in the mining pool or mine freely by themselves. At present, in the testnet stage, we encourage everyone to get test coins to participate in the testnet interaction, help us conduct various tests and provide valuable feedback. We will give corresponding feedback to users who contribute to the growth of the network.

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