Exploring Bitcoin's New Favorite Fractal: Ecological Innovation or Follower?

Since September, with the community frenzy sparked by Fractal, the market focus has returned to the Bitcoin ecosystem. A large number of users have participated in the assets and gameplay launched by Fractal, leading to high on-chain gas fees. The significant response to Fractal can be attributed to the current market downturn and the lack of fresh narratives; on the other hand, many users pay special attention to Fractal's launch based on the precedent of a previous wallet's generous airdrop. Even during the testnet phase, there was extreme competition, with estimates of tens of millions of addresses participating in related tasks in hopes of receiving an airdrop. Furthermore, the high return effect brought by asset protocols like Cat20 has increased Fractal's popularity further as the profit-making effect has fermented.

The hunger marketing strategy of a certain wallet has also played a role in promoting the trend. Originally, the circulating supply of the airdropped FB was very small, but as on-chain competition intensified, the price of FB skyrocketed, becoming a kind of "golden shovel" and indirectly accelerating the development of Fractal.

Given the above reasons, it is particularly necessary to conduct an in-depth analysis of Fractal.

Fractal Overview: Bitcoin Native Scaling Solution

Fractal is a scaling solution that is recursively expanded based on the core code of Bitcoin. It is designed as a second-layer network or sidechain for Bitcoin, serving as a native extension to the first-layer network, enhancing transaction efficiency by accelerating block production speed and increasing block capacity while maintaining orthodoxy. Its operation includes full compatibility with the Bitcoin mainnet, while providing faster transaction confirmations like a 30-second block time and a block capacity 20 times larger than that of the Bitcoin mainnet.

As a native scaling solution, Fractal can start from the Bitcoin main chain to achieve cross-layer secure asset transfers. Bitcoin and assets such as BRC-20 and Ordinals can be bridged through a decentralized bridge. The underlying mechanism uses dynamically replaced rotating MPC signatures, taking into account the characteristics of the BRC-20 standard.

Fractal functions more like the Bitcoin testnet, supporting some features not yet activated on the mainnet in advance. It serves as a testing ground, providing a better user experience and performance optimization, making it very suitable for complex applications to experiment and innovate. At the same time, it allows users to participate and give feedback in a real interactive environment, similar to the significance of EVM layer 2 networks for Ethereum.

Investment and Financing: Strong Partnerships to Promote Development

Fractal was jointly developed by a well-known Bitcoin wallet and a certain capital. As the main developer, the wallet has over 900,000 active users weekly and has received five rounds of undisclosed financing, with two rounds led by two major exchanges and several capitals participating.

A certain capital is a crypto-native fund with a portfolio that includes several well-known projects, experienced in USD exits and investments in projects with hundredfold returns, as well as in developing globally popular blockchain applications. Overall, the resources of the wallet side are more prominent, attracting a large number of loyal users through successful brand operations and previous generous airdrops, making it the strongest endorsement for Fractal.

With the support of resources from both parties, Fractal implemented a series of strategic plans to promote user and developer participation. After the mainnet launch, 1 million FB tokens were airdropped to over 100,000 eligible addresses, and multiple developer resource support programs were launched, demonstrating Fractal's ambition for ecological development.

Fractal Highlights: Multiple Advantages

The highlights of Fractal lie in the performance optimization and improvements based on the Bitcoin mainnet, as well as the innovative asset issuance methods and ecological applications introduced. It is like using the old bottle of Bitcoin mainnet resources to hold the new wine of the novel asset issuance methods. Specifically:

Fractal's overall design allows Bitcoin and assets like BRC-20 and Ordinals to be bridged through a decentralized bridge. User transaction records on the Fractal network can then interact or sync with the Bitcoin mainnet, while providing faster transaction confirmation times and larger block capacity compared to the mainnet.

Implementation Path: Multi-layer Expansion, Mining Mechanism and OP_CAT

( Multi-layer expansion mechanism

Fractal enhances Bitcoin transaction speed by recursively expanding layers, establishing multiple layers of expansion on the main chain to form a tree structure. Each layer can further bifurcate, increasing the network's parallel processing capability. Each layer independently processes transactions and can dynamically adjust the number of layers. During peak periods, it quickly increases the levels to handle more transactions, flexibly responding to various loads.

This is like building countless parallel highways outside the Bitcoin mainnet. Each road can scale the mainnet and can also expand other roads. Each has its unique value orientation, allowing users to solve congestion issues without changing tools.

) Cadence Mining( Rhythm Mining)

Fractal uses the same PoW consensus as Bitcoin, which means BTC miners can seamlessly switch to Fractal mining using existing hardware such as ASICs and GPUs, achieving a win-win situation by improving efficiency through shared workload and providing additional income for miners.

Fractal mining is divided into permissionless and merged mining. Out of every 3 blocks, 2 are generated through permissionless mining, and 1 is generated through merged mining. Permissionless mining allows anyone to participate, simply by downloading the software and running a node. Merged mining is specifically aimed at BTC miners, allowing them to mine BTC and Fractal blocks simultaneously without additional computational power.

OP_CAT

OP_CAT is an opcode used for string concatenation in the Bitcoin scripting language, which was removed in 2010 due to security and memory considerations. It can build more complex trustless Bitcoin infrastructure, which is crucial for implementing advanced transaction conditions and functionalities. Fractal introduces OP_CAT to bring more development possibilities to the BTC ecosystem, such as on-chain applications, smart contracts, and more.

![Exploring the new favorite of BTC: Is Fractal an ecological revolution or a follower?]###https://img-cdn.gateio.im/webp-social/moments-25447cbfc1a60ccb13745d296d455bc1.webp(

Fractal Token Economics

The Fractal mainnet mainly consumes two types of tokens: FB as the general fuel fee, and SATS as the exclusive fuel fee for a certain decentralized exchange.

The total issuance is 210 million coins, and only the tokens produced through mining will be circulating after the mainnet goes live. Other tokens are subject to a lock-up mechanism, with a private placement lock-up period of six months.

50% - PoW mining, Bitcoin miners can directly mine FB.

15% - Ecosystem Treasury, used to invest in supporting Fractal ecological projects. Up to 10% of the total amount can be used each year for 10 years.

15% - Core contributors, used to build and maintain the Fractal core software. All tokens are locked for 7 months and released linearly over 12 months.

10% - Community subsidy, used to establish cooperation and liquidity programs. Up to 10% of the total amount can be used each year for 10 years.

5% - Pre-sale, targeting early investors and participants, all tokens are locked for 7 months and released linearly within 12 months.

5% - Consultant, providing strategic advisory support for the project. A maximum of 20% of the total amount can be used each year over 5 years.

Currently, the official statement has not clearly indicated whether there will be an airdrop for testnet participants, and if so, it could be allocated from community subsidies or the ecological treasury. Although it is unlikely that the 5% for advisors, 10% for community subsidies, and 15% for the ecological treasury will be misappropriated to cause a crash, there are certain risks since the remaining 45% is still controlled by the official team in the short term, apart from the 5% allocated to investors and the 50% used for mining which have time costs.

To ensure transparency, the official allows users to subsequently track the following addresses to view the use of funds:

• Ecosystem Treasury )15%###:bc1pukzhdkdghqajp3zvwkx65e7uv5zma6lzalet4xauf3p5c0vdg8wqk2avv6
• Community Grant (10%):bc1pdrqk5xv3tfpmdsuegnt5a63xucf475r3l0vqg6zulwmtzezg7h6sd2pqx3
• Pre-sale (5%):bc1put2rhzx0cwz552epm25dt2rexg2tzx9sws2sjcezsjm9y7h7ct8svhpzf2
• Consultant (5%):bc1pm2h0420vmgayhzs59d5nf0mzjlf3q6vrnlpqytefe3rk6a8ku3zq59walm
• Main Contributor (15%):bc1ppvqe8ugt27kgw4trvnzjvcfzn52702tq2ahe7cgzw0jsv67vrhysvgnndz

Fractal Ecosystem Overview

( CAT 20

The hottest ecological protocol at Fractal is undoubtedly the CAT20 launched by CAT Protocol. This protocol was released in the early hours of September 11, with a total supply of 21 million. The code shows signs of being developed by Chinese people, but specific information about the project team has not been disclosed. Although the uncertainty surrounding the code and project team information may pose risks, a surge of users has rushed to mint under the push of community sentiment and KOL dissemination, causing the fuel fees on the Fractal chain to soar, peaking close to 7000. The extreme popularity has driven FB to a high price of 40U, reflecting the level of enthusiasm in the crypto circle for CAT20. Interestingly, the founder of a certain DEX and CAT Protocol, along with a certain team, staged a scene reminiscent of the real and fake Monkey King regarding CAT20, with all three parties holding differing views, which just proves the protocol's breakout.

Compared to the existing Bitcoin protocol, the main innovation of the CAT protocol is the use of the OP_CAT opcode, perfectly fitting the Fractal ecosystem. Its modular and programmable minting provides flexible and composable rules for complex DApps such as AMM, lending, and staking. Another feature is that transactions are fully verified by miners, reducing reliance on indexers and ensuring that all transactions are directly confirmed by Bitcoin miners, thus lowering the possibility of being affected by indexer inconsistencies or manipulations.

As of the time of writing, a certain wallet indicated that the CAT20 trading market is under research, and official resources are on the way, but the official social media account of the CAT20 protocol was suddenly frozen, which seems to add uncertainty. In short, the protocol is still in its initial stage, and its feasibility is still open to discussion, requiring further attention to subsequent planning and performance.

![Exploring the New Favorite of BTC: Is Fractal an Ecological Revolution or a Follower?])https://img-cdn.gateio.im/webp-social/moments-171113404f3dd01032f937984fa6c8c2.webp(

) BTCTerminal

From the perspective of social media attention, BTCTerminal is considered a relatively popular project. Initially, it was an infrastructure provider for the Runes protocol, with products including the Runes browser, trading market, and encyclopedia. It later decided to rename itself to BtcTerminal, rebranding and integrating into Fractal. After the name change, it continues to support related runes while focusing on a broader Bitcoin ecosystem. Currently, it has launched the Fractal ecosystem integrated trading market, where users can check Mint progress, wallet balances, etc., and it will also support the upcoming Cat721. Recently, the official team launched a mining activity, allowing the rental of ASIC mining machine power to participate in FB mining, with a total quota of $50,000, but the specific risks and returns need to be considered comprehensively.

UniWorlds

UniWorlds is a metaverse project built on Fractal, pioneering immersive environments on Fractal, developing a community and game toolkit for creating interoperable virtual worlds, and will launch a BTC ecosystem game creation platform. At the same time, UniWorlds is also the first large-scale application on Fractal developed by a certain wallet team. It was announced on August 8 that it completed a seed round investment led jointly by that wallet and a certain UGC platform vendor. UniWorlds has indeed received clear resource support from the official side, and further observations can be made as the ecosystem develops.

( BRC20

After the BRC20 function was activated at block 21000, the on-chain gas fees have indeed remained high for a long time, which has attracted some degree of interest in Cat20. However, from the perspective of trading volume and market capitalization, the performance of the top few inscription projects is not outstanding, and there is generally a situation where the startup or studio monopolizes the market. Whether any projects can stand out in the future or continue to remain silent still needs to be tested by the market.

![Exploring the new favorite of BTC: Is Fractal an ecological revolution or a follower?])https://img-cdn.gateio.im/webp-social/moments-2b583156ca830db2afaaedb3d9a017cf.webp###

Participating Group Thoughts: Different Perspectives of Retail Investors, Miners, and Institutional Investors

Retail Investor Perspective

The new asset protocols or on-chain gambling narratives brought by Fractal will attract some on-chain retail investors.