In case you missed it, bitcoin Season 2 released part of its Spring/Summer collection last week.
Among other things, twitter.com/bergealex4/status/1777771133233742177″>HalfA “bitcoin Economic Layer” snuck out with a $21 million fundraising round. twitter.com/AlpenLabs/status/1778080721128599949″>Alpen Laboratories announced $10.6 million in funding to start a bitcoin-native zero-knowledge infrastructure.
Another group of blockchain designers, including the folks at Starkware, got together and launched the twitter.com/L2Ordinals/status/1778453840775553485″>L2O Consortium “Setting standards for trustless and Layer 2 applications.”
Of course, no one knows what all this means, but it is provocative. It gets people going, capital foaming, and the industry humming. Eight-figure seed rounds are being launched and some pretty big risk players are returning. Almost every day, a new layer is announced or some “bitcoin-native” protocol you've never heard of announces that its users have locked billions of dollars worth of bitcoins in its “trustless” multi-sig protocol.
I guess that's how it happens in a bull market. Interestingly, some of the people involved will admit that it feels more like performance art than legitimate engineering. Remember the twitter.com/bergealex4/status/1778823151629054147″>Rick Owens Strange parades? It's eye-catching, but who will wear this?
Note that most of the new devices being proposed have not yet removed their training wheels anywhere they have been implemented. Rollups on ethereum, for example, are still only twitter.com/ercwl/status/1772796987806450121″>disguised multi-sig. Similarly, this new generation of bitcoin-adjacent protocols seems like content launching with no product or “decentralization on the roadmap.” Under the layers of bland marketing and technical mumbo-jumbo, it's hard to find a trust model that's much better than Liquid's simple and often maligned federated sidechain.
Forget unilateral exit, most “Layer 2s” offered today can hardly qualify for the term under our admittedly flexible policy here at bitcoin Magazine.
To make matters worse, proof-of-stake variants have infiltrated the design space despite ethereum's dismal performance since its transition. It is not surprising that the conversation has already led to twitter.com/build_on_bob/status/1773010071917642182″>ponzinomics to set the speculative wheel in motion. With the colloquial style “dots,” a new symbolic gadget has burst onto the scene and is all the rage among the designer crowd. This new liquidity farming fad requires users to deposit their bitcoins (and those of twitter.com/mononautical/status/1777876863832191404″>friends and family) somewhere in exchange for, you guessed it, performance.
This time they call it gamification. I think it is the ultimate cryptonihilism. Fast fashion has officially become bitcoin!
Does the emperor have no clothes?
Speaking of catwalks and people dressed as clowns, the Taproot Wizards team recently pandemonium unleashed in the aspiring Layer 2 community by participating in its most cherished scientific project, BitVM.
My dear colleague Shinobi gave a decent summary of the event. I won't bother you with the technical details but of course the claims remain highly controversial to this day. The fate of at least a dozen startups is at stake here, so you can imagine the smell when they were publicly reported to the fashion police.
Although I am partial to the wizards' arguments, we should probably postpone writing BitVM's obituary. Jumping liquidity hurdles seems to be one of the widespread trade-offs one has to make when designing trust-minimizing protocols on top of bitcoin. Lightning strikes have caused us incoming liquidity headaches for years. Proposals like Ark have been ruled out due to the huge UTXOs that operators have to finance. Perhaps BitVM bridges can be designed to mitigate traders' initial liquidity requirements. At the very least, the problem probably won't be enough for everyone to drop everything and go home.
The unfortunate conclusion to this saga is that everyone involved seems a bit amateurish. Although twitter.com/udiWertheimer/status/1776563645738000745″>claims the opposite, clearly some due diligence was omitted. The issue could have done with a little more collective brain cell analysis before publishing it and it's safe to say that all targets were pretty surprised by the announcement.
To fix all this, the magicians have just presented their twitter.com/QuantumCatsXYZ/status/1779968142279573583″>derivative proposal. It's hard not to get the impression that this was a setup motivated by marketing purposes. Then again, they're grown men in wizard hats, what do you expect?
On the other hand, it is a valid question and the response from the BitVM “team” has not been exactly kind either. One would expect a thicker skin from researchers who have been around the block. Banning people from participating in a Telegram working group and dismissing the entire premise does not serve the interests of the community they are building for. They may not agree with the conclusions, but the obvious result is that the audience and interest in BitVM has now grown beyond the small engineering circles where it was being encouraged. Many have suggested that it was probably the first time the mechanism was communicated in an accessible way. It was a missed opportunity for its proponents to take advantage of this attention and direct it their own way if they thought the project was misrepresented.
Hopefully this is all just a failed dress rehearsal because I don't see how this is very inspiring for anyone seriously interested in contributing to this space.
A great ending
Of course, a circus show is not complete without the clown act.
The city's most popular protocol designer is getting ready to showcase its latest line just in time for the halving this Friday. Runes, a protocol for fungible tokens, is probably the most anticipated drop since the Jordan 1. As we speak, twitter.com/namcios/status/1775483586885423423″>hundreds of users are syncing bitcoin nodes for the first time in their lives in preparation for the holidays. Blockchain is expecting a record crowd for this event, so be aware that tickets could be expensive.
As for me, I'll probably just watch from my balcony in the comfort of my safe and ever-reliable bitcoin jeans. Tick tock, next block.
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