ABCDE: Why did we invest in B² Network?

Author: Kris, ABCDE

Bsquared Network (B² Network) is a leading Layer 2 project on BTC, successfully The introduction of smart contracts into BTC unlocks the potential value of 832 Billion market value BTC. This project will provide a new platform for innovative applications such as DeFi, NFT, and BTC derivative assets in the BTC ecosystem.

1. Unlock BTC ecological value

Currently Bitcoin's problems:

Bitcoin's performance problems: Bitcoin initially The main focus of the design is decentralization and security, not peak performance. Due to its 10-minute block interval and limited block size, Bitcoin's throughput is severely limited and can only handle a small number of transactions per second. As the Bitcoin user base continues to expand, this problem has become increasingly prominent, causing network congestion, transaction delays, and transaction fees to skyrocket.

Bitcoin’s Turing Incompleteness: Bitcoin’s Scripting Language Intentionally designed to be non-Turing complete and intended to enhance the security and simplicity of the network. This means that Bitcoin cannot natively execute complex smart contracts, thus limiting its potential in decentralized applications.

Transaction fee issue: As network traffic grows, users must pay Higher transaction fees to ensure their transactions receive priority processing. This dynamic makes small or frequent transactions economically impractical.

B² Network is an evm compatible layer 2 on BTC that allows developers Directly experience the native Bitcoin second-layer network with consumers:

- Provide an off-chain trading platform that supports Turing-complete smart contracts to improve transaction efficiency and reduce costs.

- By combining zero-knowledge proof (ZKP) technology with Bitcoin’s Taproot integration, ensuring enhanced privacy and security of transactions.

- The network aims to develop Bitcoin into a dynamic platform, Setting the stage for innovative applications such as DeFi and NFT is not only applicable to traditional Bitcoin assets, but also to emerging Bitcoin derivative assets.

2. Design and advantages of B² Network

The technical architecture of B² Network is shown in the figure below, including a two-layer structure: Rollup layer and data availability (DA) layer. B² Network aims to redefine how users think about Bitcoin’s second layer solutions.

B² uses ZK-Rollup as the Rollup layer. The ZK-Rollup layer uses the zkEVM solution and is responsible for executing user transactions and output-related proofs within the second layer network. The user's transaction is submitted and processed at the ZK-Rollup layer. The user's state is also stored in the ZK-Rollup layer. Batch proposals and generated zero-knowledge proofs are forwarded to the data availability layer for storage and verification.

Data availability layer includes distributed storage, B² nodes and Bitcoin network . This layer is responsible for permanently storing a copy of the Rollup data, validating the Rollup’s zero-knowledge proof, and ultimately performing final confirmations on Bitcoin.

Distributed storage is a key aspect of B² Network, which serves as ZK -Repository of Rollup user transactions and their associated proofs. By decentralizing storage, the network fundamentally improves security, reduces single points of failure, and ensures data immutability.

In order to ensure data availability, B² is also in every zone of Bitcoin In the block, write a Tapscript script to the Bitcoin network, as shown below. The script anchors Rollup’s data paths and zero-knowledge proofs for efficient storage in decentralized storage during this period, a process that is cost-effective and generates 6 transactions per hour. Therefore, when verifying, users will compare transactions one by one with the Taproot script data on Bitcoin Layer1 to ensure the ultimate credibility of the Rollup data.

In addition, B² Network will also convert the zero-knowledge proof verification process performed by B² nodes into bit commitments, and write the bit commitments into the Bitcoin network. Challengers can compare the results of the zero-knowledge proof verification with the bit commitments and find After doing evil, challenge through the challenge mechanism to unlock rewards, as shown below.

Through the above design, B² Network  has achieved the following advantages:

- Reduce transaction costs by 50 times and increase speed by 300 times

- You can pass Use Unisat, Xverse, Metamask, OKX and other familiar wallets to interact

- Leveraging account abstraction, access using original BTC (bc1p…) or ETH (0x) addresses

- Low cost:

- >The cost of B² Rollup Layer is the operating expense of the chain itself. When demand increases, only the RPC service and ZKEVM Prover need to be added horizontally

-> The cost of B² DA Layer is the node operating cost of B² Nodes. The increase in Rollup transactions will not affect B² Nodes

-> The cost of Layer1 is the transaction fee of BTC itself. Each BTC block contains a Layer1 transaction, so the cost is fixed.

It is worth noting that B² Network will also conduct Upgrade, B² Nodes is upgraded to B² Hub, B² Hub will serve all developers and project parties who want to build a second-layer Rollup on the Bitcoin network, providing a data availability layer and state transformation verification/proof system based on the Bitcoin network.

3. How does B² Network activate the BTC ecosystem through economic incentives?

● Sequencer pledge: Sequencer participates in the sequence validator election by staking BSQ. Users can Delegate BSQ to the sequence validator.

● Bitcoin miner incentives: Bitcoin miners contribute computing power BSQ tokens are available. Bitcoin miners who participate in zk proof generation can obtain BSQ (miner income will generate new income after halving).

● Asset cross-chain incentives:● When users transfer BTC, ETH, When assets such as BRC20 cross-chain to B² Rollup, users will receive BSQ returns (if users lock assets into Layer 2 DeFi to provide liquidity, they can obtain higher returns).

● Storage node incentives: Storage nodes store Rollup data copies and Submit the stored zk proof to receive BSQ benefits.

● B² Hub handling fee: BSQ will be the native generation of B² Hub To use B² Hub to deploy ZK-Rollup, BSQ will be charged as transaction fee.

● Governance: BSQ holders can participate in future protocol upgrades vote.

● Transaction fee discount: You can enjoy a discount when you use BSQ to pay gas fees.

● Income sharing: Users who pledge BSQ can get platform Gas fees divided into.

4. Looking to the future

B² Network The launch introduced smart contracts to BTC, providing a new platform for innovative applications such as DeFi, NFT, and BTC derivative assets in the BTC ecosystem. It is expected that the gas fees for BTC asset transactions will drop significantly in the near future, and the ease of programming of Layer 2 will also bring more abundant application scenarios for BTC.