Fractal Bitcoin: Comprehensive Research Report

Summary

Fractal Bitcoin was launched on September 9, 2024, and is an innovative Bitcoin scaling solution. It achieves infinite hierarchical recursive scaling by modifying the Bitcoin core code. Within just a few days, Fractal captured a significant portion of Bitcoin's hash rate, demonstrating strong appeal. This study aims to analyze in depth this rapidly rising project within the Bitcoin ecosystem.

Key Points

1. Innovative hybrid mining model: Fractal combines joint mining and free mining, providing a new perspective for the proof-of-work mechanism.

2. Bitcoin's pioneering network: Fractal provides developers with a real testing environment, and activating OP_CAT is the beginning of many anticipated experiments.

3. Strong initial user base: Through partnerships with OKX and UniSat, Fractal successfully attracted the most active user group in Bitcoin.

4. Community-Driven Strategy: Fractal adopts a pragmatic community-driven approach to avoid excessive hype and institutional influence.

5. Ecosystem Integration: Fractal has successfully integrated key participants in the Bitcoin ecosystem, including the BRC-20, Ordinals, and Runes communities.

1. Introduction

Fractal Bitcoin is the only Bitcoin scaling solution that uses the Bitcoin core code to recursively expand infinitely layered. It is built on the world's most secure and widely held blockchain.

To fully understand the innovation of Fractal, it is necessary to review the historical background of the Bitcoin scalability discussion. The Segregated Witness soft fork implemented in 2017 aimed to increase Bitcoin's block capacity, followed by the controversial Bitcoin Cash hard fork. Since 2018, second-layer solutions such as the Lightning Network have received increasing attention. In this ongoing exploration of Bitcoin's scalability and functional enhancement, Fractal has proposed a unique solution to address these long-term challenges.

Fractal's mainnet officially launched on September 9, 2024, at 00:00 UTC. The launch achieved significant success, demonstrating the project's strong appeal and technical robustness. In just 24 hours, Fractal's joint mining accounted for over 40% of Bitcoin's total hash rate, while free mining accounted for 2% of Bitcoin's hash rate. Fractal's free mining hash rate has exceeded three times that of Bitcoin Cash's total hash rate.

The project has attracted participation from major players in the mining sector. Large mining pools such as F2Pool, Antpool, and Spiderpool have joined Fractal's mining ecosystem. Other well-known mining pools are also preparing to participate, demonstrating that the Fractal mining network is growing and has further expansion potential.

2. Core Concepts and Technologies

2.1 Native Bitcoin Expansion

Fractal, as a native extension of Bitcoin, maintains complete compatibility with the Bitcoin mainnet by utilizing the existing Bitcoin codebase and modifying block production parameters. This approach achieves functional enhancement without compromising the core security model of Bitcoin.

2.2 Technical Specifications

Fractal has introduced several key technological innovations:

• Block time: 30 seconds, greatly improving transaction confirmation speed and network throughput.

• Hybrid mining mechanism: In every three blocks, two are free mining, and one is joint mining with Bitcoin.

• Scalability: Theoretically supports unlimited layers of improvement, with each layer providing a 20-fold capacity increase compared to the Bitcoin mainnet.

• Smart Contract Functionality: Achieved Turing completeness in smart contracts by implementing the OP_CAT opcode.

• Parallel execution: Allows different applications to run independently optimized instances.

• Compatibility: Fully compatible with Bitcoin standard ( such as BRC-20 and Ordinals ).

2.3 Unique User Experience

The wallet address on Fractal is exactly the same as the mainnet address. Users only need to switch networks in the UniSat or OKX wallet to access different layers. Major wallets such as OKX wallet and UniSat wallet fully support Fractal Bitcoin.

3. The Position of Fractal in the Bitcoin Ecosystem

Comparison of 3.1 with Other Bitcoin Solutions

Compared to EVM-compatible Layer 2 solutions, Fractal adopts a native Bitcoin approach, which may align more closely with the ideals of Bitcoin purists.

Compared to Bitcoin Cash, Fractal did not create an independent chain, but embraced Bitcoin as the main network and sought local expansion.

Compared to the Lightning Network, Fractal offers comprehensive support for smart contracts, does not require channel management, and provides a simpler user experience.

3.2 Market Strategy and Built-in User Base

Fractal, relying on approximately 1 million weekly active users from UniSat, directly meets these users' demand for a cheaper, faster, and more feature-rich trading environment. This built-in user base allows Fractal to avoid the "cold start" problem.

The Fractal plan takes the number of transactions as a core indicator, rather than the total locked value ( TVL ). This strategy aligns with its built-in user base and helps to demonstrate real usage and adoption.

4. Ecosystem Construction

4.1 Decentralized Concept

Fractal is committed to decentralized and community-driven growth, reflected in:

• Encourage diverse cross-chain bridge solutions
• Open development environment
• Community-driven governance
• Distributed Infrastructure Development

4.2 Start Users and Developers

• Distribute 1 million FB tokens to over 100,000 eligible addresses.
• Collaborate with OKX wallet
• Developer Incentive Program

4.3 Funding Programs and Project Evaluation

• Adopting a retrospective funding approach
• Evaluation criteria include contributions to the ecosystem, technological innovation, etc.
• A wide range of projects supporting innovation from core infrastructure to application layer

4.4 Outstanding Funding Projects

• sCrypt: Enhance the scripting capabilities of Fractal
• F2Pool: Contributing to the security of Fractal
• Nubit: Developing a data availability layer
• DeTrading: Supports cross-chain atomic swaps without the need for a central authority.
• UniWorlds: A toolkit for developing and building interoperable virtual worlds.
• FractalEcosystem.io: Displaying the community directory of the Fractal project

4.5 Future Outlook

• Expansion Funding Program
• Deepen community engagement
• Supports a wide range of future applications
• Continue to develop scalable infrastructure
• Enhance interoperability with other blockchain ecosystems

5. Token Economics and Economic Models

5.1 Token Details

• Name: FB( Fractal Bitcoin )
• Maximum Supply: 210 million pieces
• Total Supply: 105,153,225.00000000
• Circulating Supply: 1,213,225.00061300
• Main use: transaction fees ( within the Fractal ecosystem )
• Secondary uses: voting, applications

5.2 Token Allocation

• Proof of Work Mining (50%)
• Ecosystem Reserve Fund ( 15% )
• Community Reward (10%)
• Presale (5%)
• Consultant Pool(5%)
• Core Contributor (15% )

5.3 Release and Lock-up Period

• Pre-sale and core contributor tokens: 7 months lock-up, followed by 5 months linear release
• Ecosystem reserve fund and community rewards: A maximum of 10% released each year over 10 years.
• Advisor Tokens: Up to 20% released annually over 5 years

5.4 Transparency and OP_CAT Governance Voting Mechanism

Fractal has announced the official addresses for each token allocation category to facilitate community monitoring. A governance voting mechanism based on OP_CAT is planned, allowing token holders to vote directly on proposals.

6. Team and Partners

6.1 Core Contributors

• UniSat: A leading Bitcoin wallet with over 900,000 weekly active users.
• Block Space Force: The co-founders are experienced in building and scaling world-class projects.

6.2 Developer Platform Partnership

Fractal has received support from the Scrypt team, which is building a smart contract meta-protocol on Bitcoin using OP_CAT.

7. Challenges and Risks

• Programmability: The use of Bitcoin scripts may hinder ecosystem growth
• Technical Risks: There are potential risks associated with modifying core parameters of Bitcoin and implementing new features.
• Adoption risk: There may be resistance from Bitcoin extremists, making it challenging to convince users and developers to shift to Fractal.

8. Conclusion

Fractal Bitcoin represents a groundbreaking method for Bitcoin scaling, with advantages such as native Bitcoin integration, technological innovation, and a strong initial user base. Despite challenges such as programmability, technical risks, and adoption barriers, Fractal demonstrates enormous potential and could reshape the utility and adoption landscape of Bitcoin.

The success of Fractal will profoundly impact the future of Bitcoin and the blockchain ecosystem. Potential investors and users should carefully weigh the project's potential against the risks, and closely monitor its technological development, ecosystem growth, and market adoption.