Guests | Jeff, Merlin Chain; Ryan Chow, Solv Protocol; Charlie Hu, Bitlayer; Stan, B² Network
This issue is from the Twitter Space organized by ABCDE Labs. The content of the article does not represent the views of Wu Blockchain. Xiao Yuzhou listens:
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BMAN: Merlin had a TGE more than a week ago. I guess Jeff has mixed feelings over the past 10 days. Can you share your thoughts with us?
Jeff : First of all, I think that the bridge-in and bridge-out of our assets are not well prepared before. There are many assets such as BTC, BRC-20, NFT, ETH, USDT, Manta, etc. Therefore, in the process of bridge-in and bridge-out, its complexity is also very high. To be honest, most chains are relatively cautious about their challenges at the beginning. But we may have been wild in the past when we did Web2, and we put all kinds of protocols in anyway, which led to problems with bridge-in and bridge-out now. As for BTC, we are already very stable in this aspect of bridge-in and bridge-out. I took a look at the on-chain data. In the past month or so, about 78,000 BTC were bridged in, and more than 70,000 BTC were bridged out, so its overall liquidity is actually very good. I believe that there are actually very few exchanges in the world that can have so many BTCs in and out. But like NFT, like runes, like this, we also took over Manta, TRON, and now we also took over, like MODE, and some Layer3, including the recent discussion with Linea, that is, too many assets are actually beyond our control. So if you want to do everything right away, you will find that the user experience will be greatly reduced. I think this is the first feeling.
The second feeling is to find out what are the advantages and disadvantages of the so-called fair launch? If we started playing with Bitcoin last year, everyone would believe in the concept of fair launch. Then we saw that BRC-20 and BRC-420 were actually fair launches, that is, there was no whitelist, no invitation system, no rules and restrictions, and everyone played anyway. Then you will find that it may have performed very averagely today. Maybe last year we thought that ORDI might be 100 or 1000, but now you will find that the market has pulled back. In fact, the pullback of ORDI and SATS is also very obvious. Runes actually use two methods. The first is the pre-runes method, which is to first send NFTs to everyone, then everyone changes hands and trades first, and then send coins to everyone. There is also the pre-mint form. Runes specifically introduced the pre-mint form, so many coins are pre-mint.
You will find that the advantages and disadvantages of fair launch are quite obvious. For example, for Merlin tokens, in fact, within 6 to 12 months, at least in the first six months, all tokens were actually airdropped by users, and then the selling pressure was very high. After everyone got the airdrop, once the market went down, everyone saw that BTC went from more than 70,000 to nearly 60,000. Many people may predict that it will break 50,000, break 60,000 to 50,000 or even lower. So in the overall market downturn, you will find that the market pressure of fair launch tokens will be relatively large.
So that's probably my feeling. I think if you're too aggressive with a product, you have to bear the consequences of being aggressive. The second is the launch mechanism. If the market is full of user tokens, the liquidity will bring about a lot of selling pressure. Of course, you can see that among all the new tokens on OKX, including the current Merlin trading volume, the daily trading volume has always been very high. It has been in the top few for the past ten days, which also shows that the market is madly trading this token. As for what will happen next, let's wait and see.
BMAN: There are already dozens of Layer2s for Bitcoin. How can we differentiate among these dozens of Layer2s? What methods can we take to stand out?
CharlieHu : Looking back to September, countless people were FUDing Ordinals last year. "Ordinals is dead" has become a very interesting MEME and catchphrase. Every time I think of that time, I feel that when everyone is FUDing you, it is actually a bottoming signal. If you persist, you may be able to move forward. There must be such a process.
Then the second layer of Bitcoin is indeed in a very interesting process. Just two months ago, everyone was discussing it. I remember when I was in Denver, everyone had a feeling that there were more than 100 second layers of Bitcoin. But if you think about it carefully, you will find that there are really no more than 10 projects that are really promoting it, including those that have made great progress, including those with a vibrant community and some special strategic approaches. Then I have always believed in a principle, that is, the number of projects that can really promote the development of this industry, whether in technology, including product design, including the matching degree between the market and products, may be only in the single digit. So how to gain the share of developers and the market, in English, it is called mind share, which is a space in everyone's cognitive field. I think it is very critical, because people can't actually remember more than 10 second layers of Bitcoin, so differentiation is very important.
There are three aspects of differentiation. The first is technical differentiation. At the infrastructure level, is it security, or is it a capacity expansion solution, or is there something special in the development environment? We promote two technology stacks of Bitlayer. The first is BitVM. We should be one of the earliest teams in Asia to study BitVM, and now we are one of the teams that have made the most contributions. We should also be in the top three in the world. There are three upgrades and three commits in SHA256, and two of them have received two grants from the official BitVM team. In fact, there has been a lot of promotion. We are not just waiting for the traditional BitVM, but doing this.
The second is DLC. DLC is a very underestimated technology. This is a technology proposed by an MIT professor, which is very helpful for building a decentralized cross-chain bridge. In the combination of DLC and BitVM, in promoting the construction of this bridge, we have already released many detailed functions, and we can also expect our engineering team to release them later, and many details are also in our original technical white paper. This is the technology, and the second is the product, that is, product innovation. In fact, Merlin has made many interesting innovations for the Bitcoin track. We are also looking at different product routes from different tracks, especially in the DeFi of Bitcoin. I have personally experienced a lot since the DeFi Summer of 2020. Whether it is from the perspective of investors, retail investors, or developers, many second-layer DeFi projects on Ethereum are actually exploring new narratives and then digging new TVLs and new assets. The TVL of the Bitcoin ecosystem can be activated, and then some new DeFi-like gameplay and asset operation gameplay of the Bitcoin ecosystem, as well as various scenarios, can be developed. I think it is a gradual process from the three types of TVL, some so-called TVL that may not be so real, to real TVL but not used TVL, to real TVL plus TVL that is actually used. For TVL that is actually used, assets can be used in the asset chain, and maximizing the efficiency of using this asset requires a variety of good scenarios.
Whether it is Bitcoin's stablecoin protocol DEX, whether it is Uniswap v2, v3, or various assets like money market credit, and then that includes various structured financial products, and for example, products like Yu'e Bao, like Solv, including some like re-pledge, and including options and futures.
There are already many products in the DeFi world. I think there will be many new DeFi games in the Bitcoin world, and I think this is worth looking forward to in 2024. To a certain extent, this is at the implementation level. For example, if BitVM really wants to be fully implemented on a large scale, ZK writes proof to the first layer of Bitcoin, which will definitely be implemented faster, and this is what we are exploring now; in terms of products, differentiated competition, as the second layer on Bitcoin; the last one is culture. This year's phenomenal infrastructure project, which everyone knows, is BeraChain. Berachain has done a very exaggerated variety of cultural activities in Dubai, and there are also in Denver, and Dubai is even more on a dimension. I think cultural output and culture are to occupy the minds of all kinds of people, as well as a large stickiness of the community, and attract all kinds of developers and users. This is a very exaggerated project. We are also learning from this project. Some of the practices of their founders and their marketing practices are also some dimensions we are learning.
At present, we have put a lot of effort into brands such as racing, acceleration, and Bitcoin engine. Our leader board ranking has decided to go the F1 way, and we are also exploring culture. Only a public chain that can really play through culture can gather long-term users from various communities with consensus. It is not just about getting some airdrops and then moving on to the next ecosystem. So in summary, there are three aspects: infrastructure technology, product design innovation and application scenarios, and culture in this aspect to differentiate.
Stan : I agree with many of the points Charlie made just now. In fact, the demand for Bitcoin is very large. The liquidity of Bitcoin, how to get some places for the Bitcoin in the hands of miners, how to earn interest, in fact, this area has always been in great demand, but the infrastructure of Bitcoin itself is very, very backward. As Charlie mentioned just now, Bitlayer is built based on BitVM. In fact, BitVM is a paper published in the second half of last year, which is very worth reading and has given us a lot of inspiration. But if it really wants to be realized, I think it will take a long time, so we (B² Network) are actually some architectures on DA, and we don’t want to do a general calculation on the Bitcoin layer all at once like BitVM, but we first solve a simple problem like how to verify ZKP on the Bitcoin layer.
So back to us, I think one of our core differences is to solve some very painful pain points, and to propose a modular architecture. If we really want to compare the entire Bitcoin ecosystem to a large computer, and we want it to be scalable and perform more general calculations, I think like a traditional blockchain, we will divide this architecture into three layers, namely the execution layer, DA layer and consensus layer. DA stands for data availability. For example, the execution layer, like our b² rollup, and Merlin Chain, can actually be regarded as the execution layer, which can be infinitely horizontally expanded, and we can have many such rollups.
What about the DA layer? In fact, there has been a lack of mature solutions for the DA layer in Bitcoin. We implemented DAS through B² Hub. Then we also saw that some other projects, such as Nubit, would also develop their own DAS. At the same time, our own DA also combines decentralized storage. This layer is not something we do alone, but we want everyone to come together to record the final data index and some proofs on the Bitcoin network.
The last layer is the consensus layer. This is the reason why all of our builders trust Bitcoin very much, because Bitcoin is the strongest consensus in the entire Crypto field and the gathering place for consensus. Bitcoin has such a large number of miners and computing power gathered here, so its consensus layer is very powerful. The consensus layer occurs on the first layer of Bitcoin and is combined with some off-chain mechanisms. We can use the commitment verification and challenge mechanism, and then let the first layer of Bitcoin verify whether the transactions on our second layer are real and whether anyone is doing evil.
So based on this architecture, I think we just want to push this architecture to the market. It is not that this is an architecture that we developed behind closed doors. In fact, we also hope that everyone can come and see and use our two products. One of them is our rollup, which is actually a rollup compatible with EVM and uses Bitcoin as gas. Its performance is now completely comparable to Ethereum's Layer2 in terms of user experience and other aspects. Because of this architecture, the final settlement of the entire Layer2 transaction occurs in Bitcoin. We are not a side chain at the same time. Our security does not rely solely on ourselves. We hope that security will rely on Bitcoin as much as possible.
Our second product, our DA layer, solves the pain point problem just mentioned. We need to solve the ZKP commitment verification to achieve the purpose of relying on Bitcoin for security. Because you see that Ethereum's DA is actually to make Ethereum's second layer cheaper and more efficient. But Bitcoin's DA, in fact, without Bitcoin's DA, our rollup is impossible. Then the rollup is a fake rollup, so Bitcoin's DA is a necessity. These are some of our features, and we also hope to use these two products to prove the feasibility and security of the entire modular expansion of Bitcoin, and then in the future there will be other builders who can also access this architecture and expand Bitcoin in their own way.
BMAN: What do you think of the Bitcoin ecosystem in the East and West? Which has more advantages, the Bitcoin ecosystem in the East or the Bitcoin ecosystem in the West? How will the Bitcoin ecosystem in the East and West differentiate in the future?
Ryan Chow : From Solv's perspective, we are a team that developed in Asia, but we have quite a lot of in-depth cooperation with Western and Eastern public chain ecosystems. So I would like to briefly talk about our feelings. I think that overall, the Bitcoin ecosystem is indeed divided into several modules. I think the first module is obviously the current module like inscriptions and runes. This module is like the early inscriptions from the East and the runes from the West. I found that many people in the East are willing to participate. So now we can see a certain confrontation in these areas. That is to say, some new assets related to the Bitcoin ecosystem with Western culture are actually beginning to appear. I think this is actually a hundred flowers blooming. I think overall, there will be both Eastern and Western assets, and I even think that there will be some assets that both the East and the West are willing to accept, because we also see more and more Western users using OKX Web3 wallets, as well as various other ones, such as Merlin, and various other infrastructures we have built, such as Unisat, etc. I think it is very obvious that we should first form a unified infrastructure, and then under this unified situation, we can gather together to create new assets at the upper layer. Otherwise, I think that if we develop separately, some of the underlying infrastructure will be fragmented.
Then secondly, I think in the entire Bitcoin Layer2, we see that there are actually some BTC Layer2 infrastructures like Botanix and Bob appearing in the West, but I think from the overall concept of technological innovation and the creation of this ecosystem, I think that Eastern projects and Asian projects are more comprehensive.
The first is called paved way, paving the way. Then it actually provides a lot of inspiration and user education for other Western projects, especially user education, which I have a deep feeling about. That is to say, a large number of retail investors in the Bitcoin ecosystem are now mainly Asian users, and the emergence of L2 in the East is indeed mainly to educate these new users. Now the Western L2 is coming here to continue this wave and attract a large number of Asian users to build their ecosystem. We can also see such a demand and this trend are quite obvious.
Then in terms of technological innovation, we will see that the East and the West each have their own advantages, especially the three founders of L2. I think the technological innovations in the content they shared are very obvious. In fact, I think a lot of the deep thinking and innovation mechanisms are not worse than those of Botanix and Bob.
I think everyone is actually doing a lot of innovation, so at this stage, it is often a concept packaging, and then how to make the market accept our innovation mechanism better and faster. Because the underlying technology mechanism, I think it is very good. There are both in the East and the West, but it is true that on the Western side, in terms of propaganda from the perspective of English, some Western chains do have a certain natural advantage, because they talk about it every day in the European and American circles, and in comparison, we definitely have fewer opportunities to speak in the European and American circles, so I think this is indeed a certain difference.
But in the end, I think Asian retail investors are the main user group. This is why we can see that in the past, some Western strategy ecosystems in the Ethereum ecosystem rarely came to Asia to hold a large number of activities, but now some Western L2s are frequently coming to Asia, especially Hong Kong, to hold a large number of BTC-related ecological activities. We can see that now the funds and users are all in Asia.
Here I can also add a very interesting piece of information. I know that some people who want to do Bitcoin L2, when they go to some Western institutions to get some BTC and some financial support, it is actually very difficult, because many institutions need a lot of audits and compliance considerations. So in fact, it often takes a long time, and finally 100 or 200 bitcoins are taken out, which may also be of this magnitude. And in Asia, as everyone knows, a miner may be a person with 1,000 bitcoins.
So I think that on this point, the orthodoxy of the East and the West has its own. I think Bitcoin does not have such a big disadvantage as Ethereum. I think everyone is equal. But in terms of the size of users and the amount of funds of users, I think Asia really has a huge first-mover advantage. This is very similar to the early development of the secured currency by Binance and OKX. The development process was based on the Asian market in the early stage, and then went global. So in this regard, I am actually more optimistic about these L2s in Asia, from my perspective. Because I am not doing L2, so I will express my third-party point of view.
Then we will also see some very basic infrastructure, such as Babylon, which is a restaking infrastructure. I think that from the Western perspective, it often has a good effect. If Babylon is doing restaking infrastructure, the right to speak and the tone of the brand are actually very high. From this perspective, they found a professor from Stanford and then went to Europe and the United States to start, which is indeed a relatively successful way. Recently, I have seen that their model is still quite popular, so this is also a kind of. Finally, there is the application layer. I think Solv is still strictly speaking an application layer, belonging to this kind of liquidity infrastructure, or an application layer like Bitcoin Yu'ebao. I think at this level, everyone's innovation is indeed the same in all aspects. At the same starting line, in the East and the West, at this time, whoever has a larger TVL earlier, a stronger global brand, global users, and may have more opportunities to reach users on exchanges earlier, I think whoever will get a higher TVL will have a relatively large leading advantage.
We will also see a lot of such application layer products in Asia. The Bitcoin-related application layer will grow rapidly, and will continue to have a great influence in the West. Recently, I have a strong feeling that many of our Solv users actually started in Asia, including many Japanese users, so there are a lot of Asian users participating. But now there are a lot of institutions and such BTC ecosystem participants in the West, and they still feel very FOMO. From the perspective of the application layer, it does make them more inclined to participate or support. I don’t think everyone is very strong on this point. Because it is in the East and in the West, there is still such a gap.
CharlieHu : First of all, the term East and West has many dimensions. First of all, it is the geographical location of the East and West. We are in Asia in the Eastern Hemisphere, and the time difference is different in the Western Hemisphere. Then, culturally, I think that there are Chinese communities all over the world now. Many companies like Babylon and Nubit, including many elderly people who have gone abroad, are actually some Chinese teams with great influence in the United States. We delayed 80% of the first round of investors, and the investors were all European and American institutions. At that time, we also hoped to focus on Asia and then promote it overseas.
Then I think that the Bitcoin ecosystem has reached the second half of version 2.0, and it will definitely not be played by the Asian community alone. From the asset side, 70% to 80% of BRC-20 users were Chinese and Southeast Asian users last year. Now it is possible that Europe and the United States have taken the lead. And Asia is actually catching up, and I don’t think it will lag behind. This is a process of integration and progress of the East and the West. Not to mention the second layer, because the second layer is actually promoted by many developers. I think the earliest is from the ICO in 2017 to the DeFi Summer in 2020. In fact, many Chinese projects were promoted and successfully promoted in the ICO in 2017. There are still some projects that are in the top 50 in market value, and some are at least in the top 100. I think there are at least a few.
Then there are the Chinese founders, Chinese communities, and Chinese technical teams in the 2020 DeFi Summer. In fact, we fell behind in that wave. There are indeed two reasons, which we can also expand and analyze. Ethereum's 2020 DeFi Summer has many good European and American projects. There are two reasons. The first is that they do have a deeper understanding of the design of financial products; the second is that they have a closer relationship with the Ethereum Foundation. At that time, the Ethereum Foundation was basically mainly in Europe and the United States, and Asia was actually a bit out of touch. Therefore, in fact, some Chinese, including Chinese, who have very strong financial engineering and financial product design capabilities, were not able to enter this DeFi as builders in the first wave. At that time, the earliest wave from Uniswap to various machine gun pool projects with some gameplay, and later DYDX, were actually not Chinese teams. Later, after BSC, including Polygon, and even various other public chains, there were many Chinese teams, and many of them were forked by writing early blue-chip Ethereum layer projects. The Bitcoin ecosystem is actually different, because DeFi has gone through a whole year of cycles, including a bear market, and many products have basically been iterated and tested several times by multiple chains. So now we are exposed to a lot of Ethereum or other POS strategies that come from this kind of DeFi. Many of the founders of these projects, including some NFTs, are actually very experienced and have experienced one or two bull and bear markets.
They are actually very mature in terms of products. Teams like Solv, which started in 2021, have already accumulated a lot of products. This type of Chinese team is actually very capable. In terms of product design and operational capabilities, they actually have a very experienced overseas team, overseas channels, and overseas KOLs. These accumulations are not inferior to those so-called Western teams. Because in fact, every team starts to do product design. After the concept is verified, they actually have to promote the market. Those channels and various KOLs around the world are actually a fair competition process. If your product is good and the terms you give to everyone are better, everyone will be willing to cooperate with you.
In fact, to put it bluntly, there are people in every market who are willing to cooperate with you. They don’t discriminate whether you are Chinese or Western. In terms of valuation, many Layer2 projects we see in the West, whether it is Layer2 or various application layer projects, are relatively highly valued. I think we are not inferior to them in this respect. On the one hand, we will not lose to them in valuation, and secondly, we will not lose to them in speed. We also have cost advantages. Our engineers and our operation team are more competitive and faster, and the cost is relatively lower than theirs. I think we can have advantages over them in these aspects.
As for Bob, I know a lot about their situation. I won’t talk about the situation in 2019. In fact, many teams first did something in the Polkadot or Ethereum ecosystem, but they may not have been very successful. Now they see the opportunity of Bitcoin and come here. Some overseas teams. When I met Alex and Dominic in Denver and Dubai, they also mentioned that they all came from Polkadot in 2018 and 2019, and then came from Ethereum. Now they are in the Bitcoin ecosystem. In fact, everyone has the same goal. So we should think that our real competitors should be like BeraChain, or Blast. I think it’s boring to FUD the so-called imaginary enemy every day. They actually have many problems themselves. I think this is one.
The second is the Bitcoin ecosystem team, the Western team, and the Eastern and Western teams are integrated with each other. I think this Hong Kong Bitcoin Conference should be a good opportunity for the strongest lineup of the East and the West to integrate. I don’t think it will be a split, but more integrated. Many capitals will go to Hong Kong. Many people in many institutions actually look at white faces, and they actually know China very well, so I think there is no so-called absolute split between the East and the West, only everyone’s choice.
Some asset custody in the East may use cobo or Spark, while overseas may choose Coinbase. These are just brand preferences. However, for the first principles, some principles of Bitcoin, including security, trustlessness, and DA in the second-layer network, and what are the better Layer2 standards, there is actually some consensus between the East and the West to a certain extent. The consensus on this is still relatively strong. I think the most recent split is the split between Ethereum and Bitcoin. This is actually quite interesting. We are working hard to reach all kinds of Ethereum, the inner circle, and the final circle of these activities. We sponsor them. We go one by one to make various Ethereum developers aware of the opportunities of the Bitcoin ecosystem, and bring their experience resources and users, as well as their products to the Bitcoin ecosystem. I think this is what we Bitlayer do, and it is also to increase the value of this ecosystem. Blindly rolling up the original inscriptions, those old users are not our biggest goal in my opinion, and our geographical location is not limited. We are also reaching out to various regions, and our users will not only focus on Asia.
BMAN: Today's topic is about how to unite the strength of Chinese people to consolidate the Bitcoin ecosystem. Because the Bitcoin ecosystem has always originated from the Chinese and the East, the most important thing today is to talk to all of you Bitcoin builders here, how can we work together?
Jeff : It can be said that they are East and West, but because the East and the West represent different values and styles of doing things, they are certainly not good or bad or high or low, but the market's impression of them is definitely different. I think this layer of window paper can be pierced. I think the market has higher requirements for Eastern projects, especially Chinese projects, because in the eyes of Westerners, Easterners may not be so credible, and in the eyes of Easterners, Easterners are not so credible. So they look at you with a microscope, right? For example, as we have always said, whether it is the number of airdrops, the number of airdrops, the number of circulation rules, or the pledge mechanism, the decompression mechanism, the bridge time, the bridge cost, etc., all your dimensions, if you look at it, you will find that people will really look at you with a microscope, not a magnifying glass.
But without talking about this, I think first of all, the Bitcoin ecosystem is more suitable for Chinese people to come together, whether it is trading or construction. Because there is nothing in this ecosystem, there is no God, that is, anyone can come to make something, and no one will judge him. But in other ecosystems, you will find that I believe that people who have really worked as developers and applications know that in any other ecosystem, you will find that there must be a God, no matter who this God is, but there must be such a person, so you will find that it becomes a political game. Just like I said that I have been starting a business in Web3 for a year, I think the biggest feeling is that Web3 is more centralized than WEB2. It has become a business that says you have to please God, then listen to the decree, and then execute the decree of God very well. Then at this time you will find that the Chinese are definitely far away from the Western gods, so you will find that some of the really good projects done by Chinese in Ethereum are actually more about helping, that is, some key positions in the industry chain are definitely not available to you, then you can only do some things that Chinese people are good at, such as making some tools, and doing some things that they are unwilling to do.
But Bitcoin is different. You will find that Bitcoin is now a fair race. And because I am Chinese, I participated in Ordinals relatively early, so there is a natural community here with users and assets, so it is easier to start. And for example, many projects in our developer ecosystem, in fact, many chains are now poaching our developers and asking them to do the deployment.
Of course, we also told all developers that we welcome everyone to long-chain deployment. Why? Because this industry is in its early stages, and your application may get different take-aways from different user ecosystems on different chains, and may also accumulate different resources, and then eventually it will feed back to the entire ecosystem and expand the Bitcoin ecosystem. Because if after a year, the market value of the entire Bitcoin ecosystem's assets has not exceeded 10 billion, it would be very sad.
But if we can make it bigger together, the market value of the entire ecosystem will increase, and the entire narrative will come out. Whether it is the Chinese or the white people who come to Bitcoin to start a business, in fact, everyone will have a greater voice. Because now, for many overseas institutions or individuals at the top of the food chain, as I listened to a podcast a few days ago, they have a very mocking attitude towards the Bitcoin ecosystem doing Layer2 or something.
Of course, this is very understandable. Many people also had such a mocking attitude towards Ethereum back then. Because vested interests always look down on new things. Just like the people of Bitcoin at that time thought that you are doing Ethereum, why do you need smart contracts? Why do you need to be so smart? It doesn’t need to be so smart, Crypto is digital gold. If you are so smart, you might as well buy Litecoin. So you will find that the first wave of vested interests did not get on board, so now new vested interests have appeared, and the new interests will laugh at how Bitcoin can do Layer2, right? You are a fake Layer2.
In fact, I don’t know if it’s intentional or if they are really arrogant enough, because the word Layer2 itself is a created word. If you said the word Layer2 5 or 8 years ago, the Bitcoin OGs might laugh at you, saying that no one uses Layer1, and you still want Layer2. Now that they have the right to speak about Layer2, they will think that Bitcoin does not have Layer2, or that Bitcoin itself does not need to have Layer2. Just like many people laughed at Ordinals last year, and laughed at Runes today. .
So the history of the whole world is actually repeating itself, although the scenes of each repetition are not exactly the same. I think today's developers, whether they are from the East or the West, must move forward together. But I do think that although it is said in such a high-sounding way, in fact, everyone will inevitably have a sense of competition in the process, and I think that's fine. The sense of competition makes everyone demand more of themselves. When you do something, you will say, look at how your competitors do it, then we must not be worse than them. I think this attitude is definitely OK. As long as we don't fall into a kind of internal circulation and vicious competition, the entire industry can move forward. This is my personal opinion.
Stan : In fact, the West has occupied the discourse power mainly in the last cycle, and it is also because of the entire Ethereum, DeFi Summer, and some of the later major technological innovations, which may come from some innovations of Ethereum itself, so to some extent Ethereum has become an orthodoxy and mainstream. Then they actually led a lot of mainstream narratives. And I saw many professors from top Western universities, as Ryan mentioned just now, they actually came out to stand up and further strengthen these narratives. Eigen Layer and Babylon in this cycle actually have such a feature. But in fact, I have always felt that, especially for Bitcoin, our advantages are still very obvious, that is, miners and exchanges are actually mostly from the East, and the core audience of Bitcoin is also mainly in Asia Pacific. Whether it is asset volume, user volume, or liquidity, the East has more advantages, including large mining companies like Bitmain, and this other advantage is difficult to be replaced. So we actually build under this background, and there are definitely many advantages that need to be used well.
That is to say, back to us, our projects and some of the things we are doing technically, in fact, we Chinese, or just Chinese-led teams must be organically integrated. I think making the product more modular, more combinable, and being able to interface with each other can also avoid reinventing the wheel and reuse each other's advantages. For example, we plan to announce our POS tomorrow, then this protocol is actually a combinable protocol, and we don't plan to issue invoices ourselves, so third parties can also issue invoices. I think that protocols like this are open, and then everyone can use them on this basis, or if you think ours is not good, take the contract code away and develop your own, which is actually OK. I think as long as everyone can maintain a state of cooperation, combination and communication with each other, then the entire Chinese Bitcoin builder field can keep moving forward.
Actually, I also went to Dubai this time, and I had a lot of feelings about TOKEN 2049. First of all, let's look at how the city of Dubai rose. In fact, I kept looking at their history at that time, and there are several key factors. First of all, their geographical location is very good. I think I will just give an example casually. Of course, this example may not be very good, but I will use how the city of Dubai rose in the first half of the century. It may inspire you, that is, as a Chinese Layer2, how he should move forward. Dubai, first of all, is a very strong strategic geographical location. It is at the intersection of the East and the West, and in fact, Bitcoin itself is also such a strategic hub in the field of Crypto, so in fact, the builder of Bitcoin naturally occupies such a geographical position. In addition, Dubai itself wants to emphasize the free economic policy, so I think that Layer2 like Bitcoin can also do more trade exchanges and more mutual circulation of assets, which is very important. Then the third is that Dubai has made a lot of infrastructure investment. I think the entire Bitcoin ecosystem is also like this. We may jointly support some builders who are very good at infrastructure, wallets, accounts, abstractions, etc., and then build it into a truly world-class facility like an airport or port. For example, Dubai has some very iconic buildings, such as the Burj Khalifa, which has actually become a landmark. It can attract people from various other ecosystems and other geographical locations. So I am particularly looking forward to whether it is Merlin, BitLayer, B², or CKB, which may not come today, but I think there will always be some Burj Khalifas growing in everyone's ecosystem, just like Arbitrum had GMX before, that is, every public chain can actually create its own benchmark application.
Merlin and Bitlayer are also preparing for these collaborations, and we are also supporting and serving some excellent builders. I may have used Dubai as an analogy to describe a chain, but it is actually a random analogy, because in the field of Web3, if a chain or a project can have hundreds of thousands of users, it is actually a very powerful ecosystem. So in fact, we are still very, very early, and there is no need to distinguish between you and me at this time, because you look at Bitcoin, I think it is really the first stop for non-Web3 fields to enter Web3. As an engineer, the first lesson we learn about blockchain must be Bitcoin, POW, and UTXO. So Bitcoin will always have an influence whether in the Internet or in the traditional financial field, and it is also the first stop for the public to hear about Crypto and Web3 for the first time.
You say a child would ask his father the first question, for sure, “Dad, do we have Bitcoin?” He would also ask, “Dad, do we have Ethereum?” So I think we should make good use of the advantages of this entry point. The market is really huge. We can make our products combinable and reusable with each other, and then together we can push Bitcoin forward.
Ryan Chow : From my perspective, I think that we are actually working together and then collaborating; from the purpose, in my opinion, it is about how we can work together to better serve all these users. Because I actually think that in the end, if we can seize a very large market share in the Bitcoin ecosystem, or even occupy a dominant position, one of the fundamental points is that we can serve users very well, that is, we can do all the needs of users very well. For example, like Ethereum and Lido, Ethereum has done POS, then Lido will appear at this time. Basically, everyone can also say that Lido and Ethereum are working together, because Lido came out of the Ethereum Foundation, but on the other hand, it is indeed because Ethereum has a foundation that understands the needs of Ethereum big users the most. It even collects feedback with Ethereum big users and then makes it. At this time, he has a project like Lido around him, and he is also very clear about what the user needs are. He may realize it one year earlier than everyone else. At this time, he is preparing to make products, which of course will actually meet the needs of the market more, or meet the real user needs.
I have just repeatedly emphasized that users are in Asia, including the early development of exchanges. Users are in Asia. Because in Asia, Binance, OKX, and Huobi are the best exchange products, and this is very obvious. Similarly, in the Bitcoin ecosystem, I don’t think that people actually say that it has such a strong orthodoxy and ideology as Ethereum. I prefer to describe it as an exploration of user needs, a deep understanding within the circle, and the ability to transform it into specific products.
I think whether it is the application layer Solv or the infrastructure, if we know what the market needs, we can iterate what is needed, and then the whole market will adopt it. This is what I think is the greatest significance, so I think BMAN and ABCDE Labs should organize and communicate frequently and deeply, and then look at the development trend of users and the entire market, and look at the real pain points of the market, and then they will naturally find their own position.
Just now, I think brother B² also spoke very well. He talked about the overall perspective, and then how we can serve the needs of different users. I think these are typical examples. It is obvious that we have a deep understanding of users and a conclusion we can draw. So I think I am quite confident about this.
The user market is now in Asia. But of course I think this is just like Binance is also doing business in Europe, America and the world, such as various markets in Eastern Europe and Southeast Asia. I think we are actually starting from Asia and also serving more market users in other regions. But I think it is more likely that the current standard setters and rule setters are actually in Asia. If we radiate outward from here, I think we can still create something very good.
Finally, I would like to add that I think that in terms of pain points and needs in this market, I can actually see that there is a clear divergence between the East and the West. That is, Asian users are actually willing to believe in the custody solutions of Cobo, Bitmain, etc., which are centralized trust, and add technical mechanisms to the underlying endorsement as the custody framework and other mechanisms. I think this is clearly proven to be feasible in Asia. However, this model is not necessarily feasible for many Western users, because Western users do want a completely decentralized mechanism, a completely decentralized Bitcoin cross-chain, or custody, or some mapping solutions, so I can actually see a clear divergence on this point. I don't think this matter must be left to Westerners to make, or that only Europeans and Americans can make this completely decentralized Bitcoin mapping solution. I think that we have seen many attempts now, and there is also an opportunity to create such a solution in Asia. If it can be done, then first of all, our plan for Asian big miners and big users is that I think we can definitely take over Asian projects. At the same time, there are some real demands from the West. We will jointly explore what these Western demands are, and then put them into these Asian projects. How can we better serve them? In the end, users from both the East and the West can actually be connected. I think the fundamental point is that user demand is a very important point. I think ideology is very important, but I don’t think it is insurmountable. I think the success of Binance, Bybit and OKX in all aspects actually proves this point. So in general, the significance of holding together is to explore the real needs of the market, and then we can iterate better products. I am still confident about this.
BMAN : I think that the major Chinese projects should not only communicate, but also support and promote each other. I have a very deep feeling. I recently saw a picture on Twitter, which shows that Indians have dominated this cycle again. In fact, the last cycle was dominated by Indians, from Polygon to these large funds, and this cycle is even more so, like Eigen Layer, and AAVE are also Indians, and the AI project is also Indian. The founder of Polygon came out to do a new project, and there are many projects done by Indians, including a co-founder of BeraChain is also Indian. So what I can see is that Indians gather together. Including what I heard in Hong Kong is that several Indian big brothers are Sreeram from EigenLayer and Sandeep from Polygon. They brought a group of Indian brothers, more than a dozen people, and went everywhere to help their brothers to do some ecological support. So we can see that Indians are particularly united, and Indians are united to dominate the entire Silicon Valley.
If you look at the CEO of Microsoft, he is also an Indian now, so I am quite emotional. Actually, Chinese people have basically dominated Crypto since 2013, but now if you look at Merlin, the one with the most FUD is Chinese people, I wonder why there is FUD, right? Then if you compare so many airdrop plans horizontally, Merlin is the most generous, giving 20% of the coins for fair launch, then look at Eigen Layer, an Indian, and how many points does he give? He is very stingy, including various recent airdrop plans.
Why are Chinese FUD the most aggressive? Why can’t we work together to create our own track? I feel very emotional about this, so I would like to make a temporary proposal. ABCDE is willing to help and take the lead. We can organize some token swaps after TGE for some top Chinese projects. Then we can exchange tokens together, take out some tokens, and organize a fund for the Chinese Bitcoin ecosystem to specifically help Chinese Bitcoin builds and projects.
It is quite difficult for Chinese people in this cycle. I can feel it deeply. That is to say, as Jeff said, Chinese projects are viewed under a microscope by users, exchanges and various VCs. No one likes Chinese projects, and Chinese people don’t like their own Chinese projects. At least we Chinese founders can come together and do something together. We can exchange some benefits with each other after the TGE of this project. Then we can cooperate with each other and make an ecological fund to invest in this Chinese Bitcoin ecosystem. I hope that these Bitcoin ecological projects invested by ABCDE can come together and support each other. At least we Chinese should not FUD ourselves. We Chinese should be like Indians, or even more united than them. Because Indians have dominated two cycles. So what do Indians have? In fact, the population is not the largest in Crypto, there are no exchanges, and there are no top funds, but why can Indians dominate in every ecosystem? These king-level projects are Indians? In fact, the people who support Indians the most are Chinese, such as BeraChain, EigenLayer, etc. How much money did Chinese invest in them? How much TVL did they contribute? Why do Chinese support Indians instead of Chinese? This is something that I am very confused about. Yes, so this is one of my reasons. As a Chinese Crypto investor who has been in the industry for more than ten years, I feel very sad that Chinese people should really learn from Indians.
CharlieHu : I have a little experience in this topic, but I cannot say I have a say, because I am the closest to Indians among the builders present here. I have two opinions. The first is that Indians do have something worth learning from. I have always held this perspective, that is, if you cannot beat them in certain fields, you should learn, not necessarily join them and learn, and then beat them better. Indeed, you also said that Indians are also called "third brothers" by us. In fact, many projects, including the early Polygon called Matic, when I joined them, were actually looked down upon by many people. They were looked down upon by Americans, and they did not achieve much in the American capital circle, including EigenLayer. His success came from his time at Stanford. If he was not a professor at Stanford, he might not be anything. Then AAVE is actually because the team of the former boss Polygon sold out their coins. They think that Celestia's DA is inexplicably successful, so there is a chance that many of their successes must actually have the factor of unity.
The second is that they are very keen in their insight into the market and their ability to capture alpha. I have a feeling about this. Since last year, there have been many small alpha groups among Chinese people, with 30 members. They are very smart and will not randomly add people, because when there are too many people, they dare not pass on various codes, including various opportunities, primary opportunities, secondary opportunities, and sharing with each other. There are more and more alpha groups in the Chinese community, and I think this is a good thing. There are a lot of them in India, and many market opportunities do not come from Twitter, but from private sharing. And in this regard, I think our Bitcoin ecosystem has actually done a good job. Then the second point I want to share is my recent feeling that many important positions are actually held by Chinese, but they may not be pure Chinese, that is, Chinese born and raised in mainland China. Some may be from Hong Kong, some were born in Taiwan and grew up in the United States, and some may be ABCs (American-born Chinese). They may not be Chinese citizens, but they have their own points of integration into Western culture, and there are even some very sharp points that can penetrate them, and then have very strong product design.
Let me talk about a few cases. The top projects in other ecosystems are actually all Chinese. For example, the founder of Jupiter is a Malaysian Chinese, and several product managers of SushiSwap are actually ABCs. There are also Chinese partners in Uniswap and Paradigm. Yes, so of course those may not be the Chinese in the pure land market that we define, and we actually have too little integration and communication with them. In fact, some very important positions in the crypto are actually already Chinese, of course they may be second or third generation, including many of the accelerator founders of the Bitcoin ecosystem that we see now, who are actually ABCs who have worked in China for many years. So I think that our communication with them, at least from my own experience, is actually seamless, and we have many opportunities to prove those Westerners that we are wrong.
They think that Chinese people cannot build a very powerful Layer2, cannot build some very good technical facilities in the middle layer, and cannot achieve a large TVL. To build some DeFi projects worth tens of billions, I think this is the best cycle to prove that they are wrong, because Bitcoin does not have the legitimacy of Ethereum. We may not be liked by Chinese faces, especially boys, but by V God. V God likes Chinese girls, jokingly said. So it may be difficult to push him in terms of legitimacy, but Bitcoin does not need it. Hal Finney has passed away, and Satoshi Nakamoto cannot be found. We do not need to lick people like the so-called Luke. They are not in this community and their influence is not that great, so I think in the end it is still the product and increment, as well as the final data that speak, which is the most direct thing on the Bitcoin side. Then in this area, our cost advantage, our speed, our efficiency, and our ability to capture opportunities, in fact, there may be great opportunities from a certain point of view. Indians' grouping is actually relative. We have seen that some successful people group together, but in fact, there are many people who look down on each other.
Sandeep once said to me that he really disliked most of the Indian projects. He was a person who fought his way out of the bloodbath. Most people in India actually have no chance to be on the main stage, so I think I still have a better attitude in this regard. I think the grouping of Indians is also called survivor bias. If Sreeram was not a Stanford professor, he would not be where he is today. If Azura was not the CTO of Polygon, AAVE might not be anything. So as long as we have an opportunity and a handle to support each other, there is still a chance in this cycle.
BMAN : In the Bitcoin ecosystem, many different asset protocols have been launched in the past six months, including the latest protocol Runes. I would like to ask everyone if there is a relative layout of Runes in their respective ecosystems, and what do you think of the Runes protocol? Will it replace BRC-20, or even have a longer-term development?
CharlieHu : I personally think highly of Runes, although the user experience is very bad. I think Casey has also been FUDed these days, and it is his turn to be FUDed. This is a joke, and it is Western FUD. He is an extremely conceited German. On September 12 last year, it was his few words that forced me to think that Bitcoin's first layer would not be able to continue if it was just like this. So there are some opportunities and applications for either off-chain expansion or second-layer expansion. Of course, I don't take sides. Domo also has its own problems. These two people who are promoting standards have value to the industry, and we respect them very much, but they also have their personality defects, which I won't talk about. Runes assets are definitely very popular in the West now. From Denver to Dubai, these Degen and these more sensitive people who speculate in coins are discussing this topic.
On the day of the halving, a bunch of Indians and Dubai people were working on runes with dozens of computers. No one went to the party. I thought it was interesting, but it turned out that everyone burned their bitcoins. This was inexplicably messed up, and there were operational errors. The entire user experience is very bad now. I think this is the same as last year, so you can actually pay attention to the entire asset. I think many explosive protocols have not yet come out. It is still in the early stages, and everyone is in a confused and groping stage. Many people have occupied some tickers and are preparing to issue some MEMEs. It is essentially a MEME asset protocol. Casey also started to promote it. I think there is no problem with influence. He came to Hong Kong this time in the hope of finding some consensus between the East and the West. XVerse pushed him to come here. In fact, he still feels quite distant from Asian culture and Asian communities. Then we at Bitlayer are doing two things. We are exploring on the tool layer. First of all, we must support Rune's assets to come to the second layer. For example, we want to increase their user experience by 100 times, including transaction volume and providing liquidity. These are what we must do. There are relatively few things that can be done on the first layer, and the experience is definitely worse. Being able to come to the second layer is definitely to pursue better returns and a better experience.
We cooperate with teams like RunesTerminal for this purpose. RunesTerminal is our first officially announced overseas ecological project. We have communicated with them a lot in this area. Recently, I have seen many tool-layer projects related to runes, many of which have been seen in Dubai, but I think they are still in the early stages and there are no real killer projects. They are not killer projects, but they are very popular and out of the circle. Last year, assets like Sats and Rats were very popular on BRC-20. They have a great influence. I have communicated with some teams that were successful in issuing inscriptions last year. They are also waiting for the opportunity. I think we are still eager to try, and there is no particularly awesome one yet. Leonidas' Runestone can't be counted, but of course this is a very good pilot.
Can the first-generation rune entrepreneurs of the old school last year, whether in China or overseas, successfully continue their glory in the rune circle? I am waiting and watching. I hope that there will be some new builders like Solv who will bring new good product designs and good DeFi solutions accumulated on Ethereum for many years, and some NFT solutions to empower this layer of Bitcoin ecology. The Bitcoin ecology should not be just a bunch of people like Leonidas who are still doing his things. This is what I don’t want to see. I am also exploring to dig out some senior builders from various other ecosystems. Rune is an asset, and this asset target must be a consensus among everyone. So I think it is the most practical thing to make good applications on it and improve the user experience.
Ryan Chow : From the perspective of Solv, we are doing DeFi and a liquidity layer based on Bitcoin, so from the perspective of protocol, we did not participate in Runes, but I personally bought some. Overall, I basically found some, which I think is very interesting, but I am definitely not as professional as Charlie and Jeff in this regard.
Let me share my thesis briefly. I actually found some supporters of Solana who play Meme, and then I first asked them what their overall status is now? Because Runes is an asset initiated by Europe and the United States that is a bit like MEME. So I talked to them and asked, as a whole, do you play Solana's MEME recently? And how do you feel about the inscriptions and runes now? What do you think of the BTC ecosystem? I feel that the feedback I got is still very optimistic, that is, they are basically a bit like Solana, and strictly speaking, they also belong to a group ecosystem.
Like BOME, and some I forgot, there are several, the most recent MEME, and BONK, these are actually some things that they or their friends have participated in making, so they have a very deep consensus in the circle, that is, they think that Bitcoin's rune assets like MEME are actually very imaginative, and they are very bullish on such an asset in the entire Bitcoin ecosystem. So I think in this matter, they have started to withdraw most or more than half of the funds from Solana's MEME to this rune asset, I think this is actually a pretty good signal.
BMAN : I also like MEME, and then I can feel the enthusiasm of this community. Gradually, I turned to Runes, which I think is quite interesting.
Jeff : I might just pour some cold water on this. I think first of all, whether it is Runes or BRC-20, it is just a protocol for issuing fungible tokens, just like ERC-20. After ERC-20 came out, no one actually cheered for the fungible token protocol anymore, because I think, that is, we already have ERC-20 to issue coins. That is, people will treat new coin issuance protocols, whether it is TRC-20 or BEP-20, as a new coin issuance protocol. The reason why everyone cares so much is that there has never been a coin issuance protocol on Bitcoin before.
So from last year's BRC-20 to this year's Runes, everyone will have a kind of shift in attention, and will think that this is a very cool thing, a very new thing, so this is normal. But secondly, I think in the long run, I may have to correct my previous judgment now. That is, I thought that Runes would not have a big impact on BRC-20 after it came out. I think this is a wrong prediction at present, right? If the prediction is wrong, you should actually take a look. Why? I think it is mainly because BRC-20 has a good ticket, or the target that can be hyped is constantly decreasing, but Runes has a longer number of digits, so it gives many developers a relatively wide space. Secondly, because it has a function like pre-mint, the way many projects can combine operations has changed significantly. At the same time, because Runes is an asset protocol dominated by overseas, early projects like RSIC and Runestone will receive a lot of attention overseas, and people in other communities are more willing to accept it, or to buy it, or to take over. So its overall momentum is very good now.
Back to today's point about the second layer, I think that there are challenges and opportunities. This is of course just today's point of view. I think the challenge is that people on the first layer are not willing to transfer rune assets to the second layer. Because it is not so inconvenient to trade rune assets on the first layer at present. It may indeed have some costs, but most people are trading the coins that are very popular. Then the user may think that if I buy a transaction order of 5,000 US dollars or 3,000 US dollars, I pay 50 US dollars, which is acceptable. I don't know if anyone here is launching a rune bridge. We already have some runes in it, and the rune bridge has not been built yet. But I personally think that users on the first layer are not willing to put runes on the second layer for trading today. It doesn't hurt them, and everyone has a natural distrust of this kind of bridge. I think this is normal, including BRC-20. Many people are unwilling to transfer BRC-20 to the second layer. Anyway, either my coin is about to die, I won't sell it on the first layer, and I can't sell it on the second layer. This coin has already been listed on the exchange, so I will bridge it to the exchange. That’s roughly the situation.
But what do I think are the opportunities? The opportunity is that you will find that Runes, which came from BRC-20, will also go the same way. What does it mean? There will definitely be some top coins, which will be hyped up very high, and then they will be listed on centralized exchanges, and then a large number of coins, just like today you see ORDI, SATS, a large number of coins are in centralized exchanges, and then become a MEME in centralized exchanges, and everyone can speculate on it. Because the users on the chain and the users of the exchange are very non-overlapping, this user group will have a full turnover, and eventually the coin will become the coin of the exchange. Many of the big ORDI users who came to us to pledge before actually don’t use Unisat at all, because the whole process of buying this coin is completed on the exchange.
However, after these top coins are listed on centralized exchanges, the remaining coins will have a very obvious liquidity depletion, because the middle and tail coins on the first layer are actually very difficult to hype up. Its overall transaction efficiency, including the efficiency of asset distribution, leads to its very high early cost. Just think that the cost of the entire issuance and friction of this coin may be like BRC-20. You can see that there are at least 10 coins, and its issuance process has cost tens of millions of US dollars. In fact, this cost of tens of millions of US dollars is a cost in the minds of users. Therefore, its liquidity in the secondary market must be very good to make up for these costs and allow it to continue to rise. So you will find that BRC-20, except for ORDI and SATS, has been cut in half or even cut at the bottom today. In addition to these two tokens, other communities have more or less encountered relatively large problems, and their liquidity is very poor. So where are the opportunities in the second layer? You will find that whether it is Solana's MEME or MEME on Base, its entire asset issuance process, such as who will participate, whether it is crowdfunding by everyone, or airdrops, etc., its entire participation process is very smooth and the cost is very low.
The second is to build a pool on it, which is DeFi. DEX has been tested for thousands of years, so it is proved to be the best way to issue. So if you build a pool on the second layer, the price can be hyped up very quickly. Of course, it may also return to zero very quickly, which we can see every day, but it can also be hyped up very quickly, including the early MEME tokens on Merlin, which will rise very quickly. Then at this time, more people who issue MEME coins will think that if I issue on the first layer, I will either pay hundreds of thousands of dollars or millions of dollars, or users will pay hundreds of thousands of dollars or millions of dollars. Then you will fi
