1. Project Introduction

BOB (Build on Bitcoin) is a second-layer platform that combines the security of Bitcoin with the flexibility of Ethereum smart contracts, supporting Bitcoin ecosystems such as Ordinals, Lightning, and Nostr, aiming to improve the practicality of Bitcoin and expand its functionality.

In simple terms, BOB aims to inspire the revival of Bitcoin construction by supporting innovations on the existing Bitcoin stack, including the Lightning Network, ordinal systems, and Nostr. The project's vision is to enhance the value accumulation of Bitcoin in the long term through the promotion of convolutional technology, especially zero-knowledge convolution, and to improve the economic sustainability of the protocol. BOB will also support various cryptographic primitives, providing a space for innovation and experimentation for developers.

The core values of BOB include supporting experimentation and innovation, ensuring real-world impact, and providing freedom of choice. The project is still in its early stages but has already released an early Alpha version. It will continue to research and experiment in the future, including new methods for trustless bridging between Bitcoin, Ethereum, and multi-chain ecosystems.

The first version of BOB's Minimum Viable Product (MVP) already has trustless BTC bridging and a built-in Bitcoin light client, which can encrypt and verify the main chain, allowing the team to create trustless BTC ordinals and BRC exchanges and other Bitcoin primitives.

2. Operation Mechanism

2.1 Merged Mining

The merged mining technology of the BOB project is a key mechanism that allows Bitcoin miners to support the BOB network without increasing additional costs. The main advantage of this technology is that it can utilize existing Bitcoin mining resources while enhancing the security of the BOB chain.

Here is a more detailed explanation of this technology:

2.1.1 Principle and Operation

Merged mining allows two different blockchains—in this case, Bitcoin and BOB—to share the same Proof of Work (PoW) algorithm. In practice, miners can mine both Bitcoin and BOB blocks simultaneously by including the information of BOB blocks as a small part of the Bitcoin blocks (usually an additional data field).

2.1.2 Technical Details

In BOB's merged mining protocol "Optimine," miners generate a proof of work that satisfies the mining difficulty requirements of both networks. Miners need to find a hash value that meets the difficulty requirements of the Bitcoin network while also meeting the difficulty requirements of the BOB network, or even easier conditions. When a Bitcoin block is mined, it implicitly contains a valid BOB block, so this BOB block is also considered mined.

2.1.3 Security

Through merged mining, BOB can leverage the extensive miner base and high security of the Bitcoin network. Because the validation of BOB blocks is done simultaneously through Bitcoin's PoW mechanism, any attempt to attack the BOB network would also require an attack on the Bitcoin network, which is economically and technically challenging.

2.1.4 Efficiency and Incentives

This technology allows miners to use the same computational work to provide security support for two networks without additional energy consumption. This not only improves energy efficiency but also reduces the economic cost of participating in multiple networks.

Merged mining provides additional incentives for miners, as they can earn additional mining rewards on the BOB chain without sacrificing Bitcoin mining returns. This mechanism encourages more miners to participate in the security maintenance of the BOB network, thereby enhancing the overall security and decentralization of the network.

2.2 EVM Compatibility

The Ethereum Virtual Machine (EVM) compatibility of the BOB project is one of its core features, enabling it to support the execution of smart contracts and the development of complex decentralized applications (DApps). This feature greatly expands the capabilities of Bitcoin, transforming it from a platform mainly used for value storage and simple transactions into a more diverse and rich application platform.

Here is a more detailed introduction to BOB's EVM compatibility:

2.2.1 Basic Concept

The EVM is the runtime environment for executing all smart contracts on Ethereum. It is a completely isolated virtual environment, meaning that the code running in the EVM can execute without any external influence. This compatibility allows BOB to leverage existing Ethereum tools and infrastructure, such as the Solidity smart contract programming language, development tools like Hardhat and Remix, and data visualization tools like BlockScout and The Graph.

2.2.2 Technical Implementation

BOB achieves EVM compatibility by integrating EVM into its L2 solution. This means that DApps and smart contracts originally designed for Ethereum can theoretically run on the BOB platform without modification. In this way, BOB can leverage the maturity and extensive developer community of the Ethereum ecosystem while benefiting from the security advantages of Bitcoin.

2.2.3 Smart Contract Development and Deployment

Developers can use standard Ethereum development tools to create, test, and deploy smart contracts to the BOB network. These contracts can interact with users through standard Ethereum wallets such as MetaMask. Additionally, BOB supports simplifying user interactions through Metatransactions and account abstraction, allowing users to pay transaction fees using BTC or other ERC-20 tokens.

2.2.4 Cross-Chain Functionality

EVM compatibility also enables BOB to support interoperability with Ethereum and other EVM-based chains. For example, users can utilize existing Ethereum infrastructure and markets to trade assets created on the BOB platform or migrate assets from Ethereum to BOB.

2.2.5 Advantages and Challenges

BOB's EVM compatibility brings many advantages, including plug-and-play smart contract support, access to a wider range of developer tools and community resources, and a more diverse DApp ecosystem. However, it also presents challenges, especially in ensuring security and efficiency when seamlessly integrating with the Bitcoin main chain.

2.3 Cross-Chain Functionality

The cross-chain functionality of the BOB project is one of its core features, greatly enhancing the interoperability between the Bitcoin and Ethereum ecosystems. By implementing cross-chain technology, BOB not only supports seamless transactions between Bitcoin and Ethereum but also connects to other EVM-based networks.

Here is a more detailed introduction to BOB's cross-chain functionality:

2.3.1 Cross-Chain Bridges

BOB has implemented one or more cross-chain bridges, allowing the transfer and interaction of Bitcoin and other blockchain assets (such as ERC-20 tokens on Ethereum). These bridges use smart contracts to lock assets on one chain and issue corresponding tokens on another chain. For example, users can lock Bitcoin on the BOB platform and receive an equivalent amount of wrapped Bitcoin (wBTC) on the Ethereum network.

2.3.2 Bi-Directional BTC Light Client Bridge

BOB particularly emphasizes the development of its bi-directional BTC light client bridge, which is an advanced cross-chain solution that supports direct interaction between the Bitcoin and Ethereum ecosystems. This bridge uses light client technology to verify Bitcoin transactions on the EVM, allowing for direct use and management of Bitcoin without the need for centralized custody services.

2.3.3 Metatransactions and Account Abstraction

BOB enhances its cross-chain functionality by introducing metatransactions and account abstraction. Metatransactions allow users to pay transaction fees without owning native network tokens (such as ETH) when conducting transactions. This means that Bitcoin users can use BTC to pay transaction fees on the Ethereum network, increasing the convenience and accessibility of cross-chain operations.

2.3.4 BTC Light Client and Smart Contract Interoperability

BOB uses BTC light client technology to allow smart contracts to access and process Bitcoin block and transaction data. This enables smart contracts created on the BOB platform to directly interact with Bitcoin, performing operations such as P2P exchanges, ordinal auctions, or tokenizing hash power.

2.3.5 Rust and zk-SNARKs

BOB's cross-chain functionality also benefits from its support for the Rust programming language and zero-knowledge proofs, particularly zk-SNARKs. This allows BOB to perform off-chain computations while verifying the correctness of these computations on-chain, providing a secure and trusted verification mechanism for complex cross-chain operations.

2.3.6 Security and Efficiency

When designing cross-chain functionality, BOB pays special attention to security and efficiency. It minimizes trust and risk in cross-chain transactions by using advanced encryption technology and carefully designed protocols. Additionally, BOB's cross-chain bridges are designed to reduce latency and transaction costs, enabling users to move assets quickly and economically.

3. Ecosystem

The fusion points and airdrops in the BOB project are key mechanisms used internally to incentivize and reward user participation in the ecosystem. These features not only encourage active community participation but also increase platform liquidity and user base.

3.1 Fusion Points

Fusion points are an incentive measure within the BOB network designed to reward user contributions and participation. Users can earn fusion points in various ways, including:

• Asset bridging: Users can earn fusion points by bridging whitelisted assets (such as wBTC and tBTC) to the BOB platform. These operations typically have high multipliers, meaning participants can earn more points through active trading.
• TVL (Total Value Locked) contribution: Users can earn fusion points based on the amount and duration of assets locked in decentralized applications (DApps) that support whitelisted assets.
• Active DApp interaction: Users can earn fusion points by interacting with specific whitelisted DApps, such as participating in voting, staking, or other forms of interaction.
• Referral program: Users can earn fusion points by referring new users to the BOB platform, with higher potential rewards for more referrals.

3.2 Airdrops

In the BOB project, airdrops are often combined with fusion point activities, including:

• Fusion point conversion: Accumulated fusion points can eventually be converted into tokens of the BOB project, which can be traded on various exchanges or used for further operations and investments within the platform.
• Community activity rewards: Users participating in specific community activities or completing specific tasks may receive airdrops directly as rewards.
• Contribution rewards: Users who make significant contributions to the BOB ecosystem, such as developers or active community members, may also receive airdrops to recognize their contributions.

4. Roadmap

The roadmap of the BOB project details its multi-stage deployment plan, including the following stages:

Phase 0: Public Testnet

This is the initial stage of the BOB project, focusing on the deployment of the test network and validation of basic functionalities. The goal of this stage is to ensure the stability of the system's infrastructure and prepare for the implementation of the next stage.

Phase 1: Bootstrapping BOB - Optimistic ETH Rollup

In this stage, BOB will implement an optimistic Ethereum Rollup solution. This means that all transactions and state transitions will initially be verified and settled on Ethereum's L1, with the potential to transition to a more efficient system in the future.

Phase 2: Inheriting Bitcoin Security through a New Merged Mining Protocol

This stage will see the integration of Bitcoin's PoW security into the BOB project through merged mining technology. This ensures that the BOB network inherits the high security standards of Bitcoin while maintaining high transaction processing efficiency.

Phase 3: Upgrading from Optimistic Rollup to ZK Verification

ZK-Rollups provide higher efficiency and security than Optimistic Rollups. The goal of this stage is to reduce the trust requirement on network validators by using zero-knowledge proofs to verify transactions and state changes, significantly increasing transaction throughput and speed.

Phase 4: Implementing BTC Staking Ordinals through BitVM, One-Time Signatures, and ZK Proofs

This stage will introduce more advanced features, such as the Bitcoin Virtual Machine (BitVM), one-time signature mechanism, and ZK proofs, all aimed at further enhancing the security and decentralization of cross-chain interactions.

Phase 5: Multi-ZK-Rollup (Simultaneously Connecting ETH and BTC)

The final stage aims to create a multi-ZK-Rollup that simultaneously connects to both the Bitcoin and Ethereum chains, greatly enhancing the flexibility and efficiency of cross-chain operations, making BOB a truly multi-chain platform.

This roadmap demonstrates the ambition and complexity of the BOB project, aiming to address existing scalability and interoperability issues by gradually introducing advanced blockchain technologies. The successful implementation of each stage will require overcoming significant technical challenges, but if successful, it will greatly advance the entire blockchain industry, especially in enhancing Bitcoin's capabilities and integration with other blockchain systems.

5. Team/Financing

Dominik Harz is the co-founder and CTO of Interlay and BOB. He holds a Ph.D. in Computer Science from Imperial College London and previously served as a research assistant at the university.

Alexei Zamyatin is the co-founder of Interlay and BOB and previously worked as a researcher at SBA Research. He is a Ph.D. candidate at Imperial College London's Centre for Cryptocurrency Research and Engineering, focusing on blockchain security and interoperability.

Recently, BOB secured a $10 million seed round of funding led by Castle Island Ventures. Other participants include Mechanism Ventures, Bankless Ventures, CMS Ventures, UTXO Management, as well as angel investors Dan Held and Domo, the creator of the BRC-20 token standard.

This funding supports BOB's goal of enhancing Bitcoin infrastructure without compromising performance by enabling off-chain computation and on-chain validation (similar to Ethereum's optimistic rollup), thereby promoting scalable smart contract applications on Bitcoin.

6. Project Evaluation

6.1 Market Analysis

The BOB project is positioned in the Bitcoin Layer 2 solution and DeFi (Decentralized Finance) space, particularly in driving interoperability between the Bitcoin and Ethereum ecosystems. By combining Bitcoin's security and Ethereum's smart contract functionality, BOB aims to expand Bitcoin's capabilities to support complex financial applications, which is not achievable on the traditional Bitcoin network. The following is the main market analysis of the BOB project and some similar projects:

6.1.1 BOB Project's Market

Bitcoin Layer 2 Solution: BOB provides higher transaction speed and lower transaction fees than the native Bitcoin network by implementing layer 2 technologies such as merged mining and smart contracts, while maintaining core security attributes.

Cross-Chain Technology: By providing compatibility with the EVM and establishing cross-chain bridges, BOB makes interoperability between Bitcoin and other blockchain assets (especially Ethereum and its tokens) possible, greatly increasing the potential applications of Bitcoin in DeFi and other fields.

Smart Contract Platform: By supporting the EVM, BOB enables developers to deploy and execute smart contracts on Bitcoin, a significant feature of Ethereum that can now be realized in the Bitcoin ecosystem through platforms like BOB.

6.1.2 Similar Projects

RSK (Rootstock): RSK is the first project to bring Ethereum's smart contract functionality to Bitcoin. It is a Bitcoin sidechain that allows the Bitcoin network to directly support smart contracts and more complex transaction types.

Lightning Network: Primarily used for payments and microtransactions, the Lightning Network is another layer 2 scaling solution for Bitcoin, enabling high-speed and low-cost transactions through the establishment of a payment channel network.

Liquid Network: Developed by Blockstream, Liquid is a Bitcoin sidechain primarily used to expedite Bitcoin transactions and issue other types of digital assets.

Stacks: Formerly known as Blockstack, Stacks aims to bring smart contracts and decentralized applications to the Bitcoin network through its unique Clarity smart contract language and Proof of Transfer (PoX) consensus mechanism.

6.2 Project Advantages

1. Security

BOB leverages Bitcoin's proof of work (PoW) security model and provides the same level of security as Bitcoin through merged mining technology. This means that any attempt to attack BOB would also have to be sufficient to attack Bitcoin itself, which is practically infeasible as Bitcoin's network is currently the largest and most secure PoW network.

2. DeFi and Smart Contract Applications

BOB not only supports basic Bitcoin transactions but also enables complex financial tools and services (such as lending platforms, automated market makers (AMMs), and stablecoins) to be implemented on Bitcoin through smart contracts. This expands the application scope of Bitcoin, making it a more comprehensive financial solution.

3. Innovative Funding and Community Incentive Mechanisms

The BOB project encourages community participation and network growth through fusion points and airdrop mechanisms. These incentive measures not only increase user engagement but also contribute to the maintenance and development of the BOB ecosystem.

4. Open and Scalable Architecture

BOB's architecture is designed to support future upgrades and expansions, including support for new cryptographic primitives and technologies such as zero-knowledge proofs and off-chain computation solutions. This ensures that BOB can adapt to future market demands and technological developments.

6.3 Project Challenges

1. Complexity and User Adoption Difficulty

While BOB simplifies the user experience through familiar interfaces like MetaMask, the underlying technology—especially involving smart contracts and cross-chain interactions—may pose a challenge for new users. This complexity may limit the participation of non-technical users, thereby affecting the widespread adoption of the project.

2. Dependence on External Factors

The success of BOB largely depends on its compatibility and interoperability with Ethereum and other blockchain technologies. Any significant changes or incompatible updates on these external platforms could potentially have adverse effects on BOB.

3. Project Execution and Technical Implementation Difficulty

Implementing the technical functionalities and ecosystem described by BOB requires high-level technical expertise and rigorous project management. Any mistakes or delays in the implementation process could potentially impact the overall success and market acceptance of the project.

7. Conclusion

In conclusion, the BOB project, as an innovative Bitcoin layer 2 solution, greatly expands the application scope of Bitcoin by integrating Bitcoin's security and Ethereum's smart contract functionality, providing the possibility of cross-chain functionality and DeFi applications. It incentivizes community participation through mechanisms such as fusion points and airdrops, striving to build an active and supportive ecosystem.

Despite facing challenges such as technical complexity, security issues, and intense market competition, the innovative concepts and expanded functionalities of the BOB project provide new perspectives and possibilities for the future application of Bitcoin. With the continuous advancement of blockchain technology and the gradual maturation of the market, the BOB project has the potential to play a key role in advancing Bitcoin and the entire cryptocurrency ecosystem into a new stage.

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