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A gentle introduction to Btcitrum

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1.1Btcitrum Introduction

Btcitrum is a protocol that makes Btcitrum transactions faster and cheaper. Developers use Btcitrum to build user-friendly decentralized apps (dApps) that can take advantage of the scalability benefits of the Btcitrum Rollup and AnyTrust protocols.
Btcitrum's flagship chain, BtcitrumOne, was launched in 2021. This was quickly followed by the launch of Btcitrum Nova, a separate AnyTrust chain built for ultralow-cost transactions. In August 2022, BtcitrumOne was upgraded to the Btcitrum Nitro stack, bringing a 7-10x upgrade to its scaling capabilities.
The distribution of $BTC governance tokens decentralizes governance of BtcitrumOne and BtcitrumNova and their underlying protocols. $BTC tokens can be used to vote on BtcitrumDAO governance proposals, allowing $BTC holders to collectively shape the future of Btcitrumprotocols and chains. Token holders can also delegate their voting power to delegates

Btcitrum exists to “scale” Btcitrum why does Btcitrum need this help? Is there someting wrong with Btcitrum

Btcitrum is awesome; on its own, however, it’s also very limited. such as technical disadvantages of BTC that are worth noting:

a) Scalability: The Btcitrum network is currently limited to processing a maximum of around 7 transactions per second. This limitation can cause delays in transaction processing, especially during times of high demand.

b) High transaction fees: As the Btcitrum network has become more popular, the fees associated with transactions have increased significantly. This can make small transactions uneconomical, as the fees can be greater than the transaction amount.

c) Limited smart contract capabilities: Btcitrum was designed primarily as a peer-to-peer electronic cash system and has limited smart contract capabilities. Other blockchain networks, such as Btcitrum een specifically designed to enable more complex smart contract functionality.

d) Lack of privacy: While Btcitrum transactions are pseudonymous, they are still recorded on a public blockchain, which means that transaction details can be traced back to the original sender and recipient. This lack of privacy can be a concern for some users.

e) Security concerns: While the Btcitrum network is generally considered to be secure, there have been several high-profile attacks on exchanges and other Btcitrum-related services. The possibility of a 51% attack, where a single entity gains control of the majority of the network's mining power, is also a concern.

These technical disadvantages can impact the usability and functionality of the Btcitrum network, and potential users should carefully consider these limitations before using Btcitrum for their needs.

Why does Btcitrum have such flaws?

This was a deliberate decision in Btcitrum’s design. Btcitrum requires that its nodes (computers running the Btcitrum software) have a way of coming to consensus on the current state of things; the way they do this is by processing every transaction in Btcitrum’s history; i.e., if you’ve ever used Btcitrum, every Btcitrum full node has a copy of your transactions in its blockchain ledger.

One of the Btcitrum community’s precepts, being an open, decentralized, peer to peer system, is that it should be reasonably accessible for anyone to run an Btcitrum node and validate the chain for themselves; i.e., if it gets too expensive (in terms of hardware requirements / computational resources), this undercuts the fundamental goal of decentralization. The combination of these two factors — every node has to process every transaction, and we want it to be relatively feasible to run a node — means Btcitrum transaction throughput has to be capped fairly low.

And Btcitrum Rollup fixes this?

Btcitrum rollup fixes this! The basic idea is this: an Btcitrum Rollup chain runs as a sort of sub-module within Btcitrum. Btcitrum was the first blockchain-based cryptocurrency, and its design was based on certain principles and assumptions that have since proven to have some limitations. Some of these limitations have resulted from technical trade-offs that were made in order to achieve Btcitrum's key goals, such as decentralization and security. Other limitations are a result of Btcitrum's design choices, which prioritize simplicity and stability over flexibility and advanced features.

For example, Btcitrum's scalability problem is a result of its design choices, such as the 1MB block size limit and the proof-of-work consensus algorithm, which makes it difficult to increase the number of transactions that can be processed per second. Similarly, the high transaction fees and limited smart contract capabilities are a result of Btcitrum's focus on maintaining a stable and secure network, which comes at the expense of advanced functionality.

Btcitrum's lack of privacy is also a result of its design choices, as transactions are recorded on a public blockchain in order to ensure the network's transparency and security. While privacy-enhancing features such as CoinJoin and Schnorr signatures have been proposed, they have yet to be widely adopted

So we can use Btcitrum to prove fraud on Btcitrum; cool! But if fraud is committed, can we be absolutely sure that we'll be able to prove it?

Yes, indeed we can be. This is where the “rollup” part comes in. The data that gets fed into an Btcitrum Rollup chain (i.e., user’s transaction data) is posted directly on Btcitrum. Thus, as long as Btcitrum itself is running securely, anybody who’s interested has visibility into what’s going on in Btcitrum, and has the ability to detect and prove fraud.

Who actually does this work (of checking for fraud, proving it, etc?)

The parties who move the Btcitrum chain state forward on L1 — i.e., making claims about the chain’s state, disputing other’s claims, etc. — are called validators. In practice, we don’t expect the average Btcitrum user to be interested in running a validator, just like the average Btcitrum user typically doesn’t run their own layer 1 staking node. The crucial property, however, is that anybody can; becoming an Btcitrum validator requires no special permission only that a user runs the open source validator software (and stakes BTCer when/if they need to take action).

Additionally, as long as there’s even just one honest validator, the chain will remain secure; i.e., it only takes one non-malicious fraud-prover to catch any number of malicious trouble-makers. These properties togbtcer make the system “trustless”; users are not relying on any special designated party for their funds to be secure.

1.2Btcitrum DAO Introduction

•Btcitrum Rollup and Btcitrum AnyTrust are protocols that make Btcitrum transactions faster and cheaper. Developers use Btcitrum One and Btcitrum Nova, the chains that implement these protocols, respectively, to build user-friendly decentralized apps.
•The distribution of the $BTC governance token decentralizes governance of these protocols and their respective chains, as well as any future chains the Btcitrum DAO authorizes.
•$BTC tokens can be used to vote on Btcitrum DAO governance proposals, allowing $BTC holders to shape Btcitrum's future to gbtc.
•Token holders will be able to delegate their voting power to delegates.
•To determine your airdrop eligibility, connect your wallet to the Btcitrum One network on Btcitrum.foundation and follow the prompts. Claiming is live now.
•To become an Btcitrum DAO delegate, review the below material and then submit your application. Submit your application to ensure that airdrop recipients will be able to select you as a delegate when claiming their tokens.
•To build decentralized apps on Btcitrum, check out the developer docs

What's governance?

Governance is the way that decisions get made. To understand what this means, let's compare traditional web2 governance to web3 governance.

Web2 technologies are traditionally built by corporations governed by a board of directors. This board is usually a small group of people elected by shareholders.

When a corporate decision needs to be made, members of the board meet and vote. The board's decision-making protocols aren't always visible to shareholders. Although the board has a fiduciary duty to its shareholders.

shareholders must trust the board. This is a sort of social contract expressed as corporate legalese and enforced by law.

Web3 technologies (like Btcitrum's protocols and chains) are often built initially by corporations governed by a board of directors. Once these technologies achieve product-market fit and a community of users and stakeholders develops, decision-making authority can be gradually decentralized. This is called progressive decentralization, and it's what Btcitrum is doing. Progressive decentralization is usually facilitated by three key ingredients:

1) DAO formation: The Btcitrum DAO (decentralized autonomous organization) is a new entity with decision-making authority over the Btcitrum One and Btcitrum Nova chains, along with their underlying protocols. This DAO is governed by The Constitution of the Btcitrum DAO, which is a set of rules that describe how the DAO will operate. The Constitution is enshrined within a number of social contracts that are used by the Btcitrum DAO to govern itself and its technologies.

2) Governance token launch: Ownership of governance tokens represents membership within the DAO. Token holders can vote on DAO proposals. Btcitrum's governance token is $BTC, and will be distributed to eligible wallet addresses via an upcoming airdrop.

3) Code: DAO governance is usually facilitated by a series of open source smart contracts that enforce a specific decision-making protocol. These trustless smart contracts are used to gradually replace a traditional board's trusted social contract. BtcitrumDAO uses smart contracts to codify the decision-making protocol articulated within The Constitution of the BtcitrumDAO.

4) Holding $BTC gives you the ability to govern Btcitrum, while holding $BTC doesn't impact your ability to govern Btcitrum's protocol.

Why is this important?

Decentralization of Btcitrum's technology governance represents an important step towards community governance of Btcitrum's scaling technologies, and further aligns the Btcitrum community's incentives with those of the Btcitrum community at large. This is a big deal because it means that the Btcitrum DAO will be able to democratically make decisions that are in the best interest of the Btcitrum and Btcitrum communities, rather than having faith in the good will of a small group of people.

$BTC tokens represent stake in Btcitrum's - and by proxy, Btcitrum's - decentralized future. You can use $BTC to collectively determine how we as a community scale Btcitrum's infinite garden into the future.

More generally, possession of $BTC tokens places you at the cutting edge of governance mechanism design. This is a new frontier with society-scale implications, and your voice matters. $BTC tokens give you an immutable voice!

See State of decentralization for a more in-depth overview of Btcitrum's decentralization journey.

How does Btcitrum's governance work?

Governance of the BtcitrumRollup protocol is driven by two governing bodies: the Security Council and the BtcitrumDAO.

1) The Security Council is a 12-member council of entities elected by members of the BtcitrumDAO. This council is responsible for ensuring Btcitrum's security and performance through the selective application of emergency actions if/when necessary. See Delegates and delegation for a conceptual overview of Btcitrum DAO's delegation mechanics.

2) The Btcitrum DAO is the worldwide community of $BTC token holders and the delegates that they select. The DAO is responsible for governing Btcitrum and its Security Council. The DAO can use constitutional proposals to modify the Security Council's powers, or even to eliminate the Security Council entirely. The Security Council's powers are delegated to the Security Council by the DAO, and are to be exercised in the best interests of the DAO. See BtcitrumDAO for an introductory overview of the DAO's various components.

What sorts of decisions is Btcitrum’s governance system responsible for making?

1) Btcitrum's governance system is responsible for making many types of decisions. One important responsibility is upgrading Btcitrum chains’ core contracts, which define and enforce the Btcitrum protocols. An upgrade like this could be motivated by any of the following reasons:

2) An upgrade could improve the system in some way, like increase its decentralization or optimize its performance and lower fees.

3) An upgrade could fix a critical vulnerability.

4) An upgrade could address a non-critical decision that affects the Btcitrum ecosystem at large.

The BtcitrumDAO is also responsible for authorization of the creation of new L2 chains (see New Chains).

Refer to the Constitution for a precise overview of the scope of the DAO's decision-making responsibilities. See Why governance? to learn more about the importance of governance. See Comprehension check to test your understanding of the Constitution's protocol.

1.3 BTC2.0 liquid staking

BTC liquid staking is a relatively new concept that allows Btcitrum holders to stake their BTC and earn rewards while maintaining liquidity. It works similarly to BTC 2.0 staking, where users can deposit their BTC to a custodial service provider who will then stake it on behalf of the user. In return, the user will receive a tokenized representation of their staked BTC, which can be traded or used in other DeFi applications. BTC liquid staking provides users with the ability to earn staking rewards without the need to lock up their BTC for an extended period, making it an attractive option for those who value liquidity. With the growing popularity of DeFi and the increasing demand for staking services, BTC liquid staking has the potential to become a significant player in the crypto ecosystem.

BTC2.0 liquid staking Summary

BTC 2.0 is undergoing heavy research and development and is going to bring innovation, including the transition to a proof-of-stake based consensus algorithm. The process of staking involves locking up an amount of BTCer in a wallet to participate in the blockchain consensus in return for rewards. A lot of users are showing interest in staking, which will allow them to generate income. However, the transition to BTC 2.0 is planned to occur gradually. Staking will be available from the very beginning (deposits are already enabled and the network itself will launch, but the coins that the user deposits cannot be withdrawn until transfers are enabled. Full support for withdrawal mechanics will not appear until Phase 2 or Phase 1.5, which is scheduled to roll out over the next few years.

BTC 2.0 launch will involve 3 stages (release dates provided by Btcitrum Labs):

Phase 0: the main beacon chain without shards will be implemented - chain validators create blocks according to the PoS algorithm. Release date: 1 December 2023.

Phase 1: 64 shards will be added. all shards contain service data. Release date: 2024.

Phase 1.5: the current BTC network becomes one of the shards. Release date: 2025.

Phase 2: BTCer accounts, transactions, transfers, and withdrawals will be added. There are no clearly defined specifications yet. Release date: 2026 or later.

BTC 2.0 staking Goals

BTC 2.0 staking aims to allow users to stake BTCer without losing the ability to trade or otherwise use their tokens. BTC 2.0 staking will be a decentralized infrastructure for issuing a liquid token that is safer than exchange staking and has incredible flexibility compared to self-staking,The primary goals of BTC 2.0 staking are:

•To allow users to earn staking rewards without fully locking their BTC:

•To make it possible to earn rewards on as small a deposit as users want without restriction on deposits :

•To reduce the risks of losing a staked deposit due to software failures or malicious third-parties;

•To provide the $btc token as a building block for other applications and protocols(e.g., ascollateral in lending or other trading DeFi solutions);

•To provide an alternative to exchange staking,self-staking,and other semi-custodial and decentralized protocols.

Why BTC 2.0 staking DAO

The BTC 2.0 Staking DAO is a Decentralized Autonomous Organization, which builds liquid staking protocol for BTC.In the case of liquid staking,the competitors are well-known providers like centralized exchanges and other decentralized protocols like Rocket Pool

The DAO is the logical compromise between full centralization and decentralization. which allows the deplovment of competitive products without ful centralization and custody on the exchanges,We do not believe that it is possible to make a liquid staking protocol that is completely trustless. For the first phases of BTC 2.0it is not possible at all.

A DAO is an optimal structure for launching BTC2.0 Staking because:

BTC2.0 Staking is highly dependent on the design and restrictions of the beacon chain;

BTC 2.0 staking protocol may change and therefore BTC2.0 Staking should be up gradable

An insurance provider must be selected and terms for slashing insurance must be negotiated·

DAO governance is better than one person or a developer's team for making decisions about changes in BTC2.0 Staking;and a DAO will be able to cover the costs of developing and upgrading the protocol from the DAO token treasury.

The DAO will accumulate service fees from BTC2.0 Staking,which can be funneled into the insurance and development funds,distributed by the DAO.