Building Dapps on Bitcoin AMA

The AMA session organized by dlcBTC and Old Fashioned Research explored the future of building decentralized applications (Dapps) on Bitcoin.

Key participants included developers and leaders from the Bitcoin ecosystem such as dlcBTC, Velar, DeepLake, Unisat, Trust Machines, and Alex.

The discussion covered Ordinals, BRC20 tokens, Bitcoin Layer 2 scaling solutions, and the broader impact of building Dapps on Bitcoin.

The panelists shared their perspectives on the potential of Bitcoin beyond a store of value, focusing on its evolution as a platform for decentralized finance (DeFi) and other applications.

Listen to the AMA recording here:

For a quick overview, we’ve prepared detailed call notes highlighting the key insights and innovations covered in the podcast.

Part 1: Exploring Ordinals and BRC20 Tokens

Introduction to Ordinals

Ordinals are essentially Bitcoin NFTs, but with a broader range of functionalities.

They allow users to inscribe data onto satoshis, turning them into unique digital assets.

The panelists discussed how Ordinals have reignited interest in Bitcoin, especially with the peak transaction volume observed earlier this year.

Understanding the Hype:

• Speakers noted the Ordinals hype in early 2023 brought significant activity to the Bitcoin network, attracting new users and developers.

• Jan from Axelr and Leonidas highlighted that Ordinals are more than just NFTs; they represent a new class of digital artifacts that are fully on-chain, immutable, and permissionless.

Use Cases and Ecosystem:

• Lorenzo from Unisat introduced the concept of recursive inscriptions, enabling developers to create complex, composable systems on Bitcoin using multiple inscriptions.

• This functionality is similar to building with Lego bricks, where each piece can interact with others to form a complete structure.

• Z3 from AORUS Games shared insights on using recursive Ordinals for gaming, allowing for more dynamic and cost-effective game development on Bitcoin.

Part 2: Scaling Bitcoin with Layer 2 Solutions

Challenges and Opportunities:

• Ken from Xverse and Henrik from Toric discussed the inherent limitations of the Bitcoin network in supporting complex transactions and smart contracts, highlighting the need for scalable solutions.

• Stacks, Lightning Network, and emerging zero-knowledge proof (ZK) rollups were identified as key technologies enabling Bitcoin to handle more advanced applications without compromising its security and decentralization.

Lightning Network:

• Henrik explained that despite common misconceptions, the Lightning Network is robust and capable of supporting thousands of transactions per second, making it a viable scaling solution for payments.

Stacks and SBTC:

• Ken emphasized the upcoming SBTC upgrade on Stacks, which will enable a trustless two-way peg with Bitcoin, allowing users to move Bitcoin into the Stacks ecosystem and use it within smart contracts.

• This development is seen as a significant step towards scaling Bitcoin’s financial applications.

Future of Bitcoin Layer 2s

Rana from Trust Machines highlighted the importance of building cross-layer interoperability.

Trust Machines is working on products like LightningSwap for seamless asset movement between Bitcoin layers, and a DeFi platform using native Bitcoin as collateral.

Part 3: Building DeFi on Bitcoin

Unlocking Liquidity

Dr. Xu from Alex and Lorenzo from Unisat focused on the need to bootstrap liquidity for Bitcoin-based DeFi.

They proposed creating more user-friendly developer tools and infrastructure, such as decentralized on-chain indexers, to foster a more vibrant DeFi ecosystem on Bitcoin.

BRC20 Swap and Financial Products

Lorenzo introduced the BRC20 Swap, the first native swap on Bitcoin, aimed at boosting liquidity and offering more financial products like lending, borrowing, and stablecoins on Bitcoin.

Future Innovations

Panelists stressed the importance of simplifying development on Bitcoin to attract more developers and projects.

They envisioned a future where Bitcoin supports a diverse range of applications, from gaming to financial services, making it more than just a store of value.

Part 4: Expectations and Predictions

Upcoming Developments

Panelists expressed optimism about the future of Bitcoin as a platform for decentralized applications.

They anticipate increased institutional interest, regulatory clarity, and the launch of new financial products and protocols.

Key Priorities:

• Focus areas for the next six months include enhancing developer tools, improving user experience, and ensuring the security and decentralization of the Bitcoin network.

Impact of the Next Halving:

• The upcoming Bitcoin halving in 2024 is expected to bring renewed attention to the network.

• The speakers believe that a more developed ecosystem, including BRC20 tokens and layer 2 solutions, could play a crucial role in the next bull market.

The AMA concluded with a strong sense of community and collaboration among the builders and investors in the Bitcoin space.

While challenges remain, there is a collective effort to push Bitcoin’s capabilities beyond its current use cases.

The panelists agreed that building a sustainable and scalable ecosystem on Bitcoin will require continued innovation, collaboration, and education.

About dlcBTC

As a decentralized wrapped Bitcoin, dlcBTC leverages Discreet Log Contracts (DLCs) and Chainlink's Cross-Chain Interoperability Protocol (CCIP) to provide a theft-proof bridge to

cross-chain DeFi, backed by the security of the Bitcoin network. dlcBTC unlocks yield for your Bitcoin in DeFi with the benefit of lower fees and merchant self-custody, empowering users to put their Bitcoin to work.

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