The New Bitcoin Sensation Fractal: Lacks Innovation but Sparks a Frenzy

Recently, with the launch of Fractal, the Bitcoin ecosystem has once again become the focus of the market. A large number of users are participating in Fractal-related assets and gameplay, resulting in consistently high on-chain gas fees. The reasons why Fractal has generated such great enthusiasm are mainly as follows:

First of all, the current overall market is sluggish, and there is a lack of fresh narratives. Secondly, based on the precedent of a certain wallet's generous airdrop, many users have placed great importance on the launch of Fractal, leading to extreme competition during the testnet phase, with an estimated over 1 million addresses participating in testnet tasks. Finally, the high returns brought by asset protocols like Cat20, along with the continuous fermentation of the profit-making effect, have further boosted the popularity of Fractal.

In addition, the hunger marketing strategy of a certain wallet has also played a role in promoting the situation. The originally small circulating supply of the airdropped FB has soared in price as on-chain competition intensified, becoming a "golden shovel" in a certain sense, and indirectly accelerated the development of Fractal.

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

Overview of Fractal: Bitcoin Native Scaling Solution

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

As a native expansion solution, Fractal can start from the Bitcoin main chain to achieve cross-layer secure asset transfers. Bitcoin and assets like BRC-20 and Ordinals can cross-chain through decentralized bridges. The underlying mechanism is a dynamically replaceable rotating multi-signature, taking into account the specific aspects of the BRC-20 standard.

Fractal functions more like the Bitcoin testnet, supporting some features that have not yet been 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 experimental innovations in complex applications. At the same time, it allows users to participate, giving feedback in a real interactive environment, similar to the significance of the EVM layer 2 network for Ethereum.

Investment and Financing: Strong Partnerships to Promote Development

Fractal was developed in collaboration between a well-known Bitcoin wallet and a cryptocurrency fund, with the former being the main developer and promoter, boasting over 900,000 active users weekly. It has received five rounds of undisclosed funding, with two rounds led by two major exchanges and participation from several well-known investment institutions.

The latter is a crypto-native fund with a portfolio that includes several well-known projects, boasting rich experience in dollar A9 exits, investing in 100x projects, and developing globally used blockchain applications. Overall, the resource advantages in wallet development are more prominent, having attracted a large number of loyal users through successful brand building and previous generous token airdrops, providing the best endorsement for Fractal.

Under the promotion of the two project parties, Fractal has implemented a series of strategic plans to initiate user and developer participation. After the mainnet launch, 1 million FB tokens were distributed to over 100,000 eligible addresses, and multiple developer resource funding programs were launched, demonstrating its ambition for ecological construction.

Fractal Highlights: Performance Optimization and Asset Innovation

The main highlights of Fractal lie in the performance optimization and improvements based on the Bitcoin mainnet, as well as the introduction of a new type of asset issuance method and ecological applications. It can be likened to using the "old bottle" of Bitcoin mainnet resources to hold the "new wine" of the newly established asset issuance mechanism. Specifically:

1. Fully compatible with the Bitcoin mainnet, users can trade on the Fractal network and synchronize with the mainnet.

2. Faster transaction confirmation times and larger block capacity.

3. Achieve cross-chain transactions of Bitcoin and assets like BRC-20, Ordinals through a decentralized bridge.

4. Adopting a multi-layer expansion mechanism, which can dynamically adjust the network hierarchy based on demand.

5. Support Cadence Mining( rhythm mining), allowing BTC miners to seamlessly participate in Fractal mining.

6. Introduce the OP_CAT opcode to provide a foundation for developing more complex applications.

Token Economics

Fractal mainly uses two tokens: $FB as the general gas fee, and $SATS as the exclusive gas fee for a certain decentralized exchange.

$FB total supply is 210 million coins, distributed as follows:

• 50% for proof-of-work mining, BTC miners can participate directly.
• 15% for the ecosystem treasury, used to invest in supporting Fractal ecosystem projects.
• 15% allocated to core contributors, released linearly over 12 months after a 7-month lock.
• 10% for community subsidies, establishing partnerships, and liquidity programs.
• 5% allocated to early investors, linear release over 12 months after a 7-month lock-up.
• 5% allocated to advisors for providing strategic advice and support to the project.

The official has not clearly stated whether there will be airdrop rewards for testnet participants. Although it is unlikely that the portions for advisors, community subsidies, and ecosystem treasury will be misappropriated, there is still a certain risk in the short term as 45% is still controlled by the official.

To ensure transparency, the official has published the addresses of each part of the funds, allowing users to track the usage of the funds.

Ecosystem Overview

Currently, the most popular protocol in the Fractal ecosystem is undoubtedly the CAT20 protocol. This protocol was released on September 11, with a total supply of 21 million coins. Although the project's information is not clear and there are certain risks, a large number of users have flocked in to participate due to community sentiment and the influence of opinion leaders, resulting in a surge in on-chain gas fees, which peaked at nearly 7000. This also drove the official token FB to be speculated up to a high of 40 dollars.

The main innovation of the CAT20 protocol lies in the use of the OP_CAT opcode, perfectly adapting to the Fractal ecosystem. Its modularity and programmable minting provide flexibility for complex DeFi applications. Another feature is that transactions are fully validated by miners, reducing reliance on indexers and enhancing security.

In addition, projects such as BTCTerminal and UniWorlds are developing within the Fractal ecosystem. BTCTerminal is a comprehensive trading market that supports functions such as checking minting progress and wallet balances. UniWorlds, on the other hand, is a metaverse project built on Fractal and has received official resource support.

After the activation of BRC20 functions, the on-chain gas fees do remain at a relatively high level, but the performance of leading inscription projects is not outstanding, and there are generally situations of entrepreneurial operations or studio operations. Future development still needs to be tested by the market.

Conclusion

From the current perspective, the Fractal project itself does not have many innovations, mainly focusing on compatibility and optimization of the Bitcoin mainnet. The ecological development is still in its early stages, and which projects will ultimately stand out remains to be seen. More answers will require time and the market to verify. For ordinary users, it is important to cautiously assess risks when participating, avoiding blind following.