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ExSat’s innovative breakthrough

ExSat’s innovative breakthrough

BlockBeatsBlockBeats2024/09/19 11:58
By:BlockBeats

EOS is making another effort. This article explains how to participate in exSat, the docking layer that will be launched on the mainnet soon

Recently, the OP_CAT protocol has made the Bitcoin ecosystem lively again, and the transaction fees of the Fractal Bitcoin mainnet have been rising steadily. However, in sharp contrast to this craze is the market's "condemnation" of Ethereum L2, which has even triggered more serious discussions such as whether the Ethereum roadmap needs to be changed. The root of this debate is whether to ignore the development of L1 itself and put the development of L2 execution first, which will lead to problems such as liquidity fragmentation and L1 value capture failure.


However, the Bitcoin ecosystem is not all prosperous. Like Ethereum, it also faces many problems that need to be faced and solved. For example, the limited ecological transaction processing capacity, scalability, and insufficient smart contract functions. In addition, network congestion often leads to delayed transaction confirmation and increased costs. Although there are solutions such as lightning networks and side chains, there is still no widely recognized Bitcoin scalability solution.


This dilemma also brings thinking to other crypto ecosystems. For the Bitcoin ecosystem, which is also vigorously developing L2, how to deal with the relationship between L2 and Bitcoin itself is a big proposition. But there is a project, exSat, which does not want to be Bitcoin's L2, but thinks about how to use technological innovation to find a way to get as close to Bitcoin's L1 as possible, connecting the Bitcoin network and its L2.


"Connection layer" innovation, what is exSat?


The Bitcoin ecosystem is currently undergoing a paradigm shift, gradually expanding from pure financial assets to various DApps, but Bitcoin's special mechanism makes its ecological development progress relatively slow. With the halving, the business development costs of the Bitcoin ecosystem are also rising, forcing miners to improve infrastructure and seek additional income.


As mentioned earlier, the Bitcoin ecosystem currently has countless Layer2s ready to go, ready to make a big splash here, but it will also experience the same problems as Ethereum. exSat was launched to meet these challenges and proposed a docking layer solution. This new term may sound difficult to understand at first, but the popular understanding is that exSat will play the role of an intermediary service between the Bitcoin mainnet and a number of Layer2s.


The reason for the birth of such a solution is that on the one hand, the current miners' income is not good, and on the other hand, it is also because the current Bitcoin L2 has not achieved the desired effect.


Yves La Rose, one of the founders of exSat, once said in an interview that "most of the so-called L2 solutions are not really the second layer, because if they fail, the Bitcoin mainnet will not be affected in any way, only the assets on its own network will be affected." The opacity of data has a profound impact on the progress of the Bitcoin ecosystem. The mechanism design of exSat allows BTC miners to submit raw Bitcoin data directly to the network and receive rewards through token issuance. In this way, in the process of solving the problems that plague the BTC L2 ecosystem, exSat has also found a way to help Bitcoin miners regain profitability.


To achieve these goals, exSat is launching some technical innovations aimed at simplifying the development of new L2s and providing the necessary tools for existing L2s to promote closer cooperation in the ecosystem.


How exSat leverages the strengths of many parties to promote the Bitcoin ecosystem


The most important thing for the crypto ecosystem is not to stick to the old ways, but to find ways to start from the existing technical foundation after realizing the problem, and use existing resources and innovative thinking to provide truly effective solutions.


POW+POS+RAM, the power of hybrid consensus mechanism


POW relies on the computing power of Bitcoin miners, with a high degree of decentralization and reliable security, while POS verifies transactions through validators staking tokens, providing higher efficiency and scalability. exSat's consensus mechanism is a hybrid consensus mechanism that combines Bitcoin's PoW and PoS. Validators need to stake native exSat tokens and BTC at the same time to form a dual-token security system.


In terms of data, due to the relatively slow progress of the Bitcoin network upgrade, exSat proposed the idea of UTXO data mirroring. If UTXO data can be mirrored into a decentralized state index, this data can be used to drive smart contracts.


exSat's idea was supported by the EOS Foundation, who created the exSat network foundation and provided initial funding support through donations and community fundraising. It is reported that this amount of funding exceeded 20 million US dollars. At the same time, technically exSat was able to adopt a convenient solution, using decentralized EOS RAM to provide data availability and create a decentralized state data indexing system, thereby providing a secure, transparent, high-performance and scalable foundation for BTC. Simply put, it means that the original BTC data is "mirrored" to the exSat network, and EOS RAM is used for decentralized high-speed storage, so that BTC assets can also cross the chain to the exSat network.


RAM is a decentralized storage database that can store more than 108GB of Bitcoin UTXO data. In July, RAMS DAO, a decentralized RAM leasing platform on the EOS chain, was established, collecting 108GB of RAM with a total value of approximately 140 million EOS, which is leased to the BTC second-layer network exSat. Users can obtain BTC mining income after the exSat mainnet is launched.


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If a miner has generated a block in the past 72 hours, that information can be pushed to exSat's validators. Validators run the POS mechanism to verify that the information they receive from the actual miners is correct, and then write the data to RAM, achieving a very cost-effective and scalable ecological development, and the hybrid consensus mechanism also greatly improves the credibility of the data. Any existing or upcoming BTC L2 can choose to use exSat for settlement or data availability, thereby reducing infrastructure costs.


exSat's full-chain vision


What allows exSat to further complete its expansion function is that its interactive page is compatible with EVM, allowing the Bitcoin network to support the running of smart contracts, greatly expanding the scope and flexibility of Bitcoin, and finding a place for Bitcoin in the multi-chain world.


In fact, the BTC+EVM on-chain ecosystem has been put into practice in 2020, but the funds flowing into the Bitcoin ecosystem are generally limited. On the one hand, the innovation boom at that time took place on Ethereum, and on the other hand, Bitcoin's infrastructure was not enough to support sufficient liquidity. But now with the passage of Bitcoin ETF, the asset issuance boom has taken turns, and many projects have begun to try to explore how to create more use cases in the Bitcoin ecosystem from all aspects.


By introducing Docking Layer and smart contract functions, exSat transforms Bitcoin from a single value storage tool to a core protocol currency that can interact seamlessly with other blockchains. Users can use Bitcoin for various cross-chain operations, such as lending on Ethereum, trading on Solana, and participating in governance on Polkadot, all of which can be achieved through exSat, which not only enhances the use value of Bitcoin, but also brings users a richer experience.


To achieve the full-chain vision, it cannot be achieved by only being compatible with EVM, but also requires a series of supporting infrastructure. Therefore, exSat also supports account abstraction and can support universal gas fees for various assets, such as BTC, Ordinals, and other Bitcoin ecosystem assets. It is even possible to pay gas fees for others, making it easier for developers and users.


In addition, validators manage multi-signature escrow accounts through the threshold signature scheme (TSS) to handle deposit and withdrawal operations. When depositing, funds are transferred to the escrow account, and the exSat system automatically detects and processes the transaction; withdrawals generate Bitcoin transactions through smart contracts, which are signed and submitted to the Bitcoin network by the validator.


The modular system design also allows exSat to take a step further on the road to full-chain construction. exSat is supported by Antelope, a modular blockchain solution designed to enhance the Bitcoin ecosystem. By acting as the DA layer and settlement layer in the Rollup system, exSat not only simplifies the deposit and withdrawal process, but also provides a higher trust guarantee for Bitcoin L2, significantly reducing development costs and resource consumption. Through this modular design, exSat enables developers to flexibly customize Bitcoin L2 solutions according to different needs, promote the further prosperity of the DApp ecosystem, and also lay a solid foundation for the future development of Bitcoin.


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In the long run, exSat promotes the active development of the Bitcoin ecosystem in two ways. From the user's perspective, exSat provides a unified user experience for account and asset management, and combines intent-centric operations to simplify the experience. For developers, exSat provides an abstract chain model with full-chain DApp support, making DApp development easier.


Fair launch, XSAT's value choice and development potential


Currently, exSat is still in the testnet stage, and the mainnet will be launched on October 23. The network launch is mainly divided into three stages: initialization, network launch, and start staking XSAT. In the first stage, the exSat Foundation will synchronize the historical data of the first 840,000 blocks as a snapshot to start network operations. There are no incentives at this stage.


Then the exSat network officially began to synchronize the original BTC block data in real time and started the mining reward mechanism. exSat chose to implement a halving cycle similar to the Bitcoin model, and the total supply of its native token XSAT is 21,000,000.


XSAT staking will start after the halving event. Before starting to stake XSAT, validators need to meet the minimum staking threshold of 100 BTC. Only XSAT stakers who rank high in staking amount and continue to meet the minimum staking threshold of 100 BTC can become valid validators, participate in signing and receive rewards.


For such miners/pools, "zero-cost staking BTC" can obtain additional income, while promoting the prosperity of the BTC ecosystem and the increase in value. The incentive mechanism may drive 10%-20% of the main network BTC staking. Currently, exSat has locked more than 2,400 BTC, with 32 validators, accounting for 37.54% of the total network computing power. On October 18, exSat officially announced its cooperation with digital asset financial service platform MatrixPort. This cooperation will add 300-600 million US dollars of liquidity to exSat. This move is likely to create a new TVL record for the BTC ecosystem.


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The value of exSat is not only reflected in developer support and miner incentives, but its infrastructure also brings rich functions to users. One of the core goals of exSat is to promote intent-centric full-chain dApps. Users holding $XSAT in the exSat wallet can not only access various applications, but also seamlessly use other Bitcoin L2s, without cross-chain bridging, signing multiple transactions, or processing multiple Gas tokens. Just select the operation you want to perform, and exSat can automatically complete the task.


As the activity on exSat and its partner L2 increases, the demand for $XSAT will also rise. In addition, exSat also adds value to its network through decentralized state data indexing, using RAM to store Bitcoin's block data. Since all projects using this index layer and other network components need to rent storage space in the decentralized database, the scarcity of RAM will increase as the number of projects increases.


For retail investors, current opportunities include staking mining, XSAT airdrops, and network incentives. In terms of token economics, exSat mimics Bitcoin's fair launch model, ensuring the long-term stability and healthy development of the network through transparent supply and halving cycles. At the same time, exSat's token economic model also provides incentives for participants to contribute to the operation and development of the network.


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Currently, exSat focuses on three aspects of business. First, it cooperates with Bitcoin mining pools to attract more computing power by pushing data; second, exSat is recruiting validators, especially those institutions and projects that can pledge Bitcoin to ensure the accuracy and security of the data. The most important and core vision of exSat is to be committed to becoming a hub for other Bitcoin L2s, providing transparent and decentralized support to L2 solutions that do not have their own index data, and promoting the further development of the Bitcoin ecosystem.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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