Fractal Bitcoin: A new hotspot in the BTC ecosystem or just a follower?

Since September, with the enthusiasm sparked by Fractal, the market focus has returned to the Bitcoin ecosystem. A large number of users have participated in the assets and gameplay launched by Fractal, leading to high on-chain gas fees. The reason Fractal has garnered such a significant response is partly due to the current overall sluggish market, which lacks new narratives; on the other hand, based on the previous generous airdrop approach by a certain wallet, many users are particularly attentive to Fractal's launch, resulting in extreme competition even during the testnet phase, with estimates suggesting that over ten million addresses participated in related testnet tasks in hopes of receiving airdrop rewards. Additionally, the high returns brought by asset protocols like Cat20, along with the continuous fermentation of the profit effect, have also driven the sustained rise in Fractal's popularity.

The hunger marketing strategy of a certain wallet has also played a role in driving the momentum. Originally, the circulating supply of the airdropped FB was very small, but as on-chain competition intensified, the price of FB soared, to some extent becoming a "golden shovel," indirectly accelerating the development of Fractal.

Given the above reasons, it is particularly necessary to conduct an in-depth analysis of Fractal.

Overview of Fractal: The Native Scaling Solution for Bitcoin

Fractal Bitcoin is a solution for Bitcoin scalability achieved by recursively expanding infinite layers based on the core Bitcoin code. It is designed as a second-layer network or sidechain for Bitcoin, serving as a native expansion to the first-layer Bitcoin network. While maintaining orthodoxy, it aims to enhance transaction efficiency by accelerating block generation speed and increasing block capacity. Its operational mechanism includes full compatibility with the Bitcoin mainnet (, allowing users to trade on the Fractal Bitcoin network, with these transactions subsequently being able to interact or synchronize with the Bitcoin mainnet ), while providing faster transaction confirmation times (, such as 30 seconds per block ) and a block capacity ( that is 20 times greater than that of the Bitcoin mainnet ).

As a native expansion solution, Fractal can start from the Bitcoin main chain to achieve cross-layer secure asset transfers. Assets such as Bitcoin, BRC-20, and Ordinals can be migrated through a decentralized bridge. The underlying mechanism employs a rotating MPC signature mechanism with dynamic replacement capabilities, while also considering specific aspects of the BRC-20 standard.

Fractal is functionally more like a testnet for Bitcoin, supporting some features that are not yet activated on the mainnet in advance, similar to an experimental ground, providing a better user experience and performance optimization, which is very suitable for bold innovation and experimentation in complex applications. At the same time, it allows users to participate and give feedback in a real interactive environment, similar to the significance of EVM layer two networks for Ethereum.

Investment and Financing: Development Momentum Under Strong Partnerships

The fractal Bitcoin network was developed in collaboration between a certain wallet and a certain fund. As the main developer and promoter, the certain wallet is a leading Bitcoin wallet with over 900,000 active users weekly. It has secured five rounds of undisclosed funding, with two rounds led by a certain trading platform and participation from multiple capital firms.

A certain fund is a crypto-native fund, with a portfolio that includes several well-known projects, and has rich experience in dollar A9 exits, investing in hundredfold projects, and developing the most commonly used blockchain applications globally. Overall, among the resources of the two project parties, a certain wallet stands out more prominently, having attracted a large number of loyal users through its successful brand structure and previous generous airdrops, which is undoubtedly the best endorsement for Fractal.

With the resources pushed by both project parties, Fractal implemented a series of strategic plans to promote user and developer participation. After the mainnet launch, Fractal distributed 1 million FB tokens to over 100,000 eligible addresses from a certain wallet and launched several developer resource funding programs, demonstrating Fractal's ambition for ecological construction.

Fractal Highlights: Significant Advantages

The highlight of Fractal lies in the performance optimization and improvements based on the Bitcoin mainnet, as well as the introduction of related asset issuance methods and ecological applications. Figuratively speaking, Fractal is like new wine in an old bottle, using the resources of the Bitcoin mainnet for a brand new method of asset issuance. Specifically:

The overall design of Fractal Bitcoin allows Bitcoin and assets such as BRC-20 and Ordinals to be migrated through a decentralized bridge. Transactions on the Fractal Bitcoin network will then interact or synchronize with the Bitcoin mainnet, while providing faster transaction confirmation times and larger block capacity than the mainnet.

Implementation Path: Multi-layer Expansion, Mining Mechanism and OP_CAT

multi-layer expansion mechanism

Fractal enhances Bitcoin transaction speed through recursive extension layers, establishing multiple extension layers on the Bitcoin main chain to form a tree structure. This design allows each layer to further fork, increasing the network's parallel processing capability. Each layer can independently process transactions and dynamically adjust the number of layers as needed. During peak transaction periods, it can rapidly increase layers to handle more transactions, thereby flexibly responding to various loads.

It can be compared to other Layer 2 networks and sidechains as having built a new highway, while Fractal can build countless highways running parallel to the Bitcoin mainnet. Each road can both expand the Bitcoin mainnet and extend another road. This way, each road has its unique value orientation, allowing users to solve congestion problems without changing their mode of transportation.

Cadence Mining ( Cadence Mining )

Fractal adopts the same proof-of-work consensus mechanism as Bitcoin, which means that Bitcoin miners can seamlessly switch to Fractal block mining using existing ASICs, GPUs, and other hardware, achieving a win-win situation by sharing workload to improve efficiency, thereby providing additional economic benefits to Bitcoin miners.

The mining method of Fractal is divided into permissionless and merged mining, with two out of every three blocks generated through permissionless mining and one through merged mining. Permissionless mining allows anyone with the appropriate tools to mine Fractal blocks, and anyone can participate in the network by downloading software and running a node. Merged mining is specifically aimed at Bitcoin miners, allowing them to mine Bitcoin blocks and Fractal blocks simultaneously without extra computational power.

OP_CAT

OP_CAT is an opcode in the Bitcoin scripting language, originally used to concatenate two elements into a string. However, due to concerns regarding security and memory usage, it was removed by Satoshi Nakamoto in 2010, as it could lead to scripts using excessive memory, thereby creating very large stack values from small inputs. Its advantage lies in its ability to write scripts necessary for building more complex and trustless Bitcoin infrastructure, which is crucial for implementing advanced transaction conditions and functionalities. Fractal Bitcoin reintroducing OP_CAT can, to some extent, bring more development possibilities to the Bitcoin ecosystem, such as on-chain applications, smart contracts, and more.

Fractal Token Economics

The Fractal Bitcoin mainnet primarily consumes two types of tokens: FB and SATS, with the former serving as general gas and the latter as the exclusive gas for a certain DEX.

The total issuance is 210 million, and after the mainnet goes live, only the tokens produced through mining can circulate, while other tokens are subject to a lock-up mechanism, with private placement locked for six months.

50% - Proof of Work mining, Bitcoin miners can directly mine FB.

Estimated Proof of Work Mining Timeline:

• 15% - Ecosystem Treasury, used for investing in and supporting Fractal ecological projects. Up to 10% of the total pool can be used each year for 10 years.
• 15% - Core Contributors, the core contributors who build and maintain the Fractal core software. All tokens are locked for 7 months and are released linearly over 12 months.
• 10% - Community subsidy, establishing partnerships and liquidity programs. Up to 10% of the total pool can be used each year for 10 years.
• 5% - Pre-sale, aimed at early investors and network participants, all tokens locked for 7 months and released linearly within 12 months.
• 5% - Advisor, a person who provides strategic advice and support for the project. Up to 20% of the total pool can be used each year for 5 years.

Currently, the official statement has not made it clear whether there will be airdrop rewards for users participating in the testnet. If there are, it may be carried out through community subsidies or the ecosystem treasury. Although the 5% for advisors, 10% for community subsidies, and 15% for the ecosystem treasury are unlikely to be misappropriated by the team for dumping, excluding the 5% for investors, the 50% allocated for mining will incur time costs. In the short term, the remaining 45% is still under the control of the official team, which may pose risks.

To ensure complete transparency, the official allows users to subsequently track the following official addresses to view the usage of funds:

• Ecosystem Treasury (15%):bc1pukzhdkdghqajp3zvwkx65e7uv5zma6lzalet4xauf3p5c0vdg8wqk2avv6
• Community Grant (10%):bc1pdrqk5xv3tfpmdsuegnt5a63xucf475r3l0vqg6zulwmtzezg7h6sd2pqx3
• Pre-sale (5%):bc1put2rhzx0cwz552epm25dt2rexg2tzx9sws2sjcezsjm9y7h7ct8svhpzf2
• Consultant(5%):bc1pm2h0420vmgayhzs59d5nf0mzjlf3q6vrnlpqytefe3rk6a8ku3zq59walm
• Main Contributor (15%):bc1ppvqe8ugt27kgw4trvnzjvcfzn52702tq2ahe7cgzw0jsv67vrhysvgnndz

Fractal Ecosystem Overview

CAT 20

The hottest ecological protocol of Fractal is undoubtedly the CAT20 protocol launched by CAT Protocol, which was released in the early hours of September 11, with a total supply of 21 million. The code shows traces of development by Chinese individuals, and specific information about the project team has not been disclosed. Although the ambiguity of the code and the project team may pose risks, the community sentiment and the dissemination by several opinion leaders have led a large number of users to rush in to participate in the minting, causing Gas fees on the Fractal chain to soar, reaching nearly 7000 at its peak. The extremely high popularity led to the official token FB being speculated up to a price of 40 dollars, demonstrating the extent of the entire crypto community's enthusiasm for the CAT20 protocol. Interestingly, the founder of a certain DEX, CAT Protocol, and a certain team staged a drama resembling the tale of the real and fake Monkey King regarding the CAT20 protocol, with each party holding their own position, which precisely proves the protocol's breakout.

Comparing the CAT protocol with the existing Bitcoin protocol, we find that one of its main innovations is the use of the OP_CAT opcode, which perfectly fits the ecological environment of Fractal. Its modular and programmable minting provides flexible and composable rules for complex decentralized applications such as AMM, lending, and staking. Another prominent feature is that its transactions are fully verified by miners and reduce reliance on indexers. Unlike token standards that may rely on external or third-party verification, CAT20 ensures that all transactions are directly confirmed by Bitcoin miners, making the protocol itself less susceptible to inconsistencies or manipulations by indexers.

As of the time of writing, a certain wallet has indicated that the CAT20 trading market is under research, and official resource support is forthcoming. However, the sudden freezing of the official social media account of the CAT20 protocol seems to add uncertainty. In short, as the protocol is still in its early stages, there are many issues regarding its feasibility that remain to be discussed, and further attention is needed on specific plans and performance.

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