Increasing Bitcoin Scale: 5 Projects to Improve Bitcoin Without Changing the Code

Over the past year, Bitcoin has improved at an unprecedented rate.

The so-called “Bitcoin Renaissance” has ushered in NFTs, token levels, staking, and dozens of new scaling solutions and “Layer 2s” on top of the oldest, most popular blockchain. Indeed, while Bitcoin's recent price action has been volatile, developers say the network's biggest stories are unfolding beneath the veil — and the most exciting times may still be months away.

Check out five projects that are redefining what's possible with Bitcoin.

1. BitcoinOS

BitcoinOS claimed to be the first project to prove zero-knowledge proof on Bitcoin in July. Last week, the group published a manifesto saying that they had “opened the final upgrade to Bitcoin” without requiring any consensus changes to Bitcoin Core.

The BitcoinOS website states that “BitcoinOS aims to be the ultimate platform you need in the blockchain space. “By enabling Bitcoin to do anything, we're creating a future where the world's most trusted and valued blockchain is the foundation for all decentralized innovation.”

In early January, BitcoinOS and similar projects celebrated the possibility of “wrapping” on Bitcoin—a powerful layer-2 scaling solution that is very popular in the Ethereum ecosystem.

Using the unique BitSNARK technology, BitcoinOS claims that real Bitcoin rolls can be made, thus far offering one of the best solutions to Bitcoin's trilemma of scalability, security and transparency.

Speaking to Decrypt, the team clarified that BitcoinOS is not “layer 2” or “package”. Rather, it's an infrastructure layer upon which any stack of functions can be built, instantly inheriting Bitcoin's security and decentralization.

It also unifies the liquidity and user base of all the coils in the ecosystem, making the user experience feel like one chain: a fully unleashed Bitcoin.

“Our goal is to unify the fragmented world of blockchain and drive the next wave of adoption and growth,” the website states.

2. Broloops

In mid-June, Bitcoin developer Burak Keckley presented an alternative Bitcoin-native package design called “Brollups”.

Unlike BitcoinOS, Broloops does not use zero-knowledge technology. Also, while BitcoinOS and other “bright” encryption systems still have very little trust around Bitcoin Bridge, Keckley says the encryption scheme is truly “trustless.”

“Brollup allows unilateral withdrawals, meaning you can withdraw your coins without permission,” Keckley told Decrypt.

To create this trustless bridge, Broloops uses pre-signed transactions whereby users deposit their unused transaction outputs (UTXO) in exchange for virtual transaction outputs (VTXOs) of Bitcoin.

In a broloop system, VTXOs can be exchanged for call data that executes a billable scenario in a smart contract. In other words, Broloops can enable smart contracts on Bitcoin that, according to the document, “cover more than 90% of DeFi use cases” – including selling NFTs for Bitcoin or ordering token sales on DEX.

Broloops is an extension of the Ark protocol that was originally designed to solve some of the UX problems of the Bitcoin Lightning Network. However, Ark still has some limitations—including some trust and financial assumptions surrounding Ark service providers, or “ASPs.”

“It means nothing to prove. [zero-knowledge proofs] Unless users can withdraw on Bitcoin,” Kecli argued in July. If so, it's not layer 2 [a] There is no unilateral way out.

3. Fractal Bitcoin

Fractal is a Bitcoin sidechain focused solely on scaling Bitcoin transactions. The model stands out because the code is designed to mimic Bitcoin's base layer as closely as possible so that building on top of it feels familiar to native Bitcoin developers.

“Fractal enables plug-and-play continuity,” the website explains. “Iterative scaling of the Bitcoin core code itself without any external constructs enables native support of existing infrastructure such as wallets.”

The team claims that all Fractal transactions and hashes can be traced back to their source on the Bitcoin blockchain. Fractals can be built on top of other fractals, the scale of Bitcoin increases 20X with each layer, and all transactions go back to Bitcoin L1.

The system is secured by Bitcoin L1 integrated mining and native Fractal mining. It also supports Ordinals and BRC-20 tokens (like Bitcoin itself) and UniSat – the BRC-20 marketplace – as major contributors.

Unlike Bitcoin's main chain, however, Fractal introduced OP_CAT to its implementation, enabling smart contracts. “This is our first step towards offering an improved Bitcoin script on Fractal,” UniSat founder Lorenzo said last month.

4. Babylon

Babylon is introducing the most popular DeFi app for Bitcoin on altcoin chains.

Babylon Labs has already launched a staking mainnet allowing BTC holders to lock their coins on the base layer. Soon, those coins will be used to secure multiple proof-of-stake networks at the same time, and stakeholders from each network will receive profits.

“There's no staking or staking,” says Babylon to Decrypt, which means storing BTC requires no reliance on intermediaries, IOUs, or any separate layer-2 chains. “With its modular design and slicing functionality, Babylon enables the Bitcoin Staking Protocol. [proof of stake] Systems to promote Bitcoin as a great asset and enjoy higher crypto-economic security than native tokens can provide.

In a recent interview, Babylon founder David Tese said that altcoins can economically secure their systems with Bitcoin without having to increase their native assets. However, he also highlighted Bitcoin L2s as a major source of demand for the Babylon service.

“Bitcoin staking will be a way for L2s to get security from Bitcoin,” he explained. “You want to make money from Bitcoin, [and] You want security from the world's most secure chain.

With Bitcoin on the horizon, several projects such as the Stacks-based Zest Protocol are enabling liquid storage of Bitcoin so that savers can get yield but still have the freedom to trade BTC.

5. He gets married.

Nubit will be a backend service that maintains multiple Bitcoin L2s as a backbone.

The block will be a “data-availability” (DA) layer secured via Bitcoin staking and powered by the aforementioned Babylon protocol, which routinely places security checks up to Bitcoin's L1. The blockchain is optimized to securely store large amounts of data from the Web2 and Web3 worlds, with security similar to that of Bitcoin itself.

“Nubit DA Bitcoin uses Bitcoin to provide trustless and scalable data delivery across all blockchains,” Nubit founder Yu Feng wrote earlier this month. Data availability ensures that all transactions on the blockchain are reliably stored and recorded in the network, and that the state of the chain can be retrieved at any time.

For many Bitcoin bundle projects that “spin” their transactions to Bitcoin, researchers have found that using Bitcoin L1 itself for DA would be too expensive. This is why many are considering using optimized DA layers that inherit Bitcoin's security instead.

“We provide an ecosystem solution that not only eases the transition from Web2 to Web3, but also fosters an open collaborative environment where everyone can participate and be rewarded by the Nubit network,” Feng wrote.