This article is a repost from NingNing's X tweet, original link: https://x.com/0xNing0x/status/1829130109842043383
The industry cycle resonates with the macro financial cycle, and the cryptocurrency industry is currently in a state of overall confusion similar to 2019. At this stage, not only is there a lack of liquidity, but the narrative also seems to be drying up. The market is not only lacking interest in VC narratives, but also tired of anti-VC meme narratives.
Just like in every philosophical crisis, people will return to Plato to find a way out. When the cryptocurrency industry is in crisis, we also need to return to Bitcoin, return to Satoshi Nakamoto.
As Cipher, the founder of the CKB ecosystem's RGB++ protocol, explained in the latest Blog, the cryptocurrency industry needs to reflect on the path dependence of Ethereum's "on-chain computation" and return to P2P economics, where computation belongs off-chain and verification belongs on-chain.
Therefore, in the selection of Bitcoin's programmability extension solutions, CKB respects the consensus of the Bitcoin community that "verification is greater than computation" and does not replicate Ethereum's Rollup solution and Restaking+AVS solution. Instead, it pays tribute to the Bitcoin Lightning Network and has launched the CKB version of the Lightning Network, Fiber Network (CFN for short).
CFN is described as the next-generation public Lightning Network based on CKB and off-chain channels. The main technologies used include: CKB's Cell (a Turing-complete UTXO), RGB++'s isomorphic binding and Leap cross-chain without bridges, Bitcoin's HTLC (Hash Time Lock Contract), and the Lightning Network's state channels.
A standard CFN payment channel lifecycle is as follows:
Open channel - Lock assets - Create HTLC - Update state - Verify transaction - Complete transaction - Close channel - Submit final state
(CFN payment channel lifecycle)
Similar to the Bitcoin Lightning Network, CFN channels can remain active indefinitely. By utilizing the "multi-hop" mechanism, many channels that remain active can form an off-chain asset payment/clearing network.
However, CFN is not a 100% replica of the Lightning Network. Compared to the Lightning Network, CFN has several key new features:
- Multi-asset support: No longer limited to a single currency, it paves the way for complex cross-chain financial applications.
- Programmability: Based on CKB's Turing-complete smart contracts, it supports more complex conditional execution and business logic.
- Cross-chain interoperability: Native design supports interaction with other UTXO chains (such as BTC) in the Lightning Network.
- More flexible state management: Thanks to CKB's Cell model, CFN can more efficiently manage channel states.
It is worth mentioning that CFN reserves space for future upgrades to more advanced payment channel technologies (such as PTLC). This forward-looking design gives CFN an advantage in technological evolution.
Due to the technical isomorphism between CFN and the Bitcoin Lightning Network (such as the same hash algorithm and time lock script), they naturally have the foundation to achieve atomic cross-chain swaps.
(Atomic cross-chain swap process between CFN and the Lightning Network)
Let's understand this process through a specific example:
- Alice (on the CKB side) wants to send 100 CKB worth of BTC to Bob (on the BTC side).
- Bob generates a secret S and gives its hash H(S) to Alice.
- Alice creates an HTLC on CFN, locking 100 CKB with the condition of providing the correct S.
- At the same time, a corresponding HTLC is created on the BTC Lightning Network, locking the equivalent BTC.
- Bob reveals S to claim the BTC, and S is also obtained by the intermediate nodes.
- The intermediate nodes use S to unlock Alice's 100 CKB on CFN.
The atomic cross-chain swap between CFN and the Lightning Network is not limited to the native assets of BTC and CKB but also supports RGB++ assets, Taproot assets, such as the first meme coin in the ecosystem, Seal, and the stablecoin RUSD from the Bitcoin ecosystem's Stable++ protocol.
CFN provides a fast and low-cost transfer channel for RGB++ assets. Users can quickly trade various RGB++ assets on CFN without settling on the CKB main chain every time.
At the same time, RGB++ provides CFN with a variety of asset types. This greatly expands the application scenarios of CFN, making it not limited to simple value transfers.
Together, they can achieve "Bitcoin-level security + Ethereum-level functionality + Lightning Network-level speed." This is an extremely competitive combination.
In addition to cross-chain payments, CFN has potential applications in the three major business models of the cryptocurrency industry: asset issuance, lending, and trading. These potential applications include:
- Cross-chain liquidity mining: Users providing cross-chain liquidity for assets supported by CFN can receive rewards, stimulating new asset issuance and trading. For example, building a Bitcoin ecosystem meme coin launch platform based on CFN.
- Atomic cross-chain lending: Users can lock assets on the BTC network and borrow corresponding value stablecoins on the CKB network without trusting third parties throughout the process.
- Cross-chain DEX: CFN can be used to build a decentralized exchange that supports fast and low-cost trading of BTC, CKB, and various RGB++ assets.
If the above potential scenarios can be realized in the future, the Bitcoin ecosystem can use CFN's cross-chain atomic swap capabilities to achieve native stablecoins, native lending, native DEX, and other DeFi applications. Therefore, CFN is not just a CKB version of the Lightning Network but a programmability extension solution with global significance in the Bitcoin ecosystem.
CFN is about to release its testnet, and we can observe its future development through the following indicators:
- The timing of successful interoperability with the BTC Lightning Network.
- The growth curve of cross-chain transaction volume after the mainnet launch.
- The number and quality of cross-chain DApps developed based on CFN.
- The adoption rate of RGB++ assets on CFN.
In conclusion, among many Bitcoin programmability extension solutions, including Babylon, Merlin, BoB, and Mezo, CFN stands out as a unique presence. It chooses to return to the classic paradigm of the Bitcoin Lightning Network and innovate, thereby possessing the powerful consensus of Bitcoin's native nature and high scalability. It has the potential to surpass competitors and ultimately win in the infrastructure competition of BTCFi.
That's all.
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