Bitcoin Ecosystem: Where It Went Wrong, and How
@DLC_Link Can Lead The Way
Bitcoin is under a lot of stress.
It's the most secure crypto-asset with the greatest and longest track record. But this security cannot easily be leveraged elsewhere.
a. You can't build on top of Bitcoin;
b. Current derivations fall short of Bitcoin's purpose.
Let's dive in to the current landscape and understand its problems.
The current landscape offers 3 solutions:
1. L2s:
@BTC_LN,
@rootstock_io,
@Stacks
But L2s rely on off-chain transactions or sidechains, which bring chain vulnerabilities.
2. Derivatives: Ordinals, BRC-20, SRC-20, Runes
But derivatives increase block size, clog the network = increased fees.
3. Wrapping:
@WrappedBTC, etc.
Wrapping
$BTC proves to be the best solution - leverage Bitcoin's economic security without clogging the network or chain vulnerabilities.
Although the current landscape for wrapping
$BTC still carries inherent flaws:
Let's look into the top contenders:
◾️ Wrapped Bitcoin (
$WBTC )
The most popular by far, with a $10Bn market cap, WBTC is the go-to solution. But, it utilises custodians, and users cannot mint or burn WBTC directly.
Not only does that process take 24 hours, it also carries massive centralisation risk.
◾️ Rootstock (
$RBTC )
Rootstock has their own native wrapped
$BTC. Whilst it's safer than WBTC, it doesn't help Bitcoin be utilised broadly across the crypto industry.
◾️ Avalanche (
$BTC.b )
This version of wrapped Bitcoin is relatively more decentralised than WBTC, but still utilises 8 primary custodians which still bears some centralisation risk.
It's also tied to Avalanche, which is limiting.
◾️ Threshold Network (
$tBTC)
tBTC employs a randomly selected group of operators, which is a great step towards decentralisation.
It also incorporates an insurance backstop, known as coverage pools.
But it doesn't have much traction.
◾️ Binance's and Huobi's (
$BBTC and
$HBTC )
Entirely centralised. Also, entirely unused.
◾️ Overall, the main drawbacks:
a. They're either too centralised, which goes against Bitcoin's entire purpose; or
b. They're chain specific, for chains which have barely any users.
Imagine what would happen to
@MakerDAO, which uses WBTC within its collateral, or
@aave, which has over $2.2Bn WBTC in their pools, if WBTC faced any problems?
This would cause industry-wide contagion... a crypto winter, if you will.
🎆Enter
@DLC_Link 🎆
Unlike its competitors,
@DLC_Link uses Discreet Log Contracts to store users'
$BTC. In simple terms, these are decentralised multisigs.
⤵️Long story short:
Since only the original depositor can access the locked BTC, even if the whole protocol is compromised, the deposited BTC will only be redeemable by the legitimate depositor.
🥸 Check out the full report here:
t.me/SimplicityGroup/333