RGB++ Layer, now an upgraded concept from the RGB++ protocol, represents a further abstraction into an inclusive layer that extends isomorphic binding, smart contract capabilities, and bridgeless cross-chain functionality to all UTXO chains. With RGB++ Layer, the Bitcoin ecosystem is bound to become significantly enriched. Particularly, the rise of Bitcoin Finance (BTCFi), driven by RGB++ Layer, will usher the Bitcoin ecosystem into a new era of prosperity.

RGB++ Layer performs multiple functions, bringing numerous exceptional features to the Bitcoin ecosystem. Its significance can be explained in 3 dimensions as follows:

• RGB++ Layer is Bitcoin’s asset issuance layer.
• RGB++ Layer is Bitcoin’s smart contract layer.
• RGB++ Layer is the interoperability layer of the entire UTXO world

Bitcoin’s asset issuance layer

The current asset issuance protocols on the Bitcoin chain, like Ordinals or BRC20, are far from well-designed and heavily reliant on centralized indexers. Unlike any previous solutions, RGB++ Layer can serve as a powerful asset issuance layer for Bitcoin.

RGB++ Layer supports the issuance of various RGB++ assets, including User Defined Token (UDT) equivalent to ERC20, and Digital Object (DOB) equivalent to ERC721. Different from Ethereum, where ERC20 and ERC721 are issued and stored by smart contract accounts, UDT and DOB are stored in Turing-complete UTXOs, meaning that they are first-class assets on RGB++ Layer, on par with Ether on Ethereum.

Thanks to the advantages of the UTXO model, RGB++ Layer can create a new paradigm for asset issuance — allowing the same asset to be issued on multiple chains simultaneously, with different proportions issued on each chain. This will provide asset issuers with a high degree of flexibility. When a project team issues a token, they don’t have to worry about losing users from one chain by issuing on another. Instead, they can issue a portion on BTC, a portion on BCH, and even a portion on the Dogecoin chain, extending their influence to the communities of all UTXO chains.

Furthermore, RGB++ Layer will introduce a brand new asset issuing model called Initial Bitcoin Offering (IBO). This can be understood as a launchpad for all RGB++ assets. The IBO platform supports directly creating pools on UTXOSwap, a UTXO-based decentralized exchange, allowing newly issued assets to be traded with high liquidity. The IBO issuance method strikes a balance between the VC model and the Fair Launch model, offering a more sustainable way. It avoids the problem of lack of community interest while also ensuring that the project team remains motivated.

Bitcoin’s smart contract layer

The RGB++ Layer leverages the smart contract stack of CKB to provide Bitcoin with Turing-complete programmability. With smart contracts, the Bitcoin ecosystem can build a variety of DeFi protocols, creating a unique Bitcoin Finance (BTCFi) landscape.

For example, UTXOSwap, a decentralized exchange (DEX) protocol, serve as the central hub of RGB++ Layer to aggregate the liquidity of various UTXO chains. UTXOSwap adopts intent-based trading as its core and implements an off-chain matching and on-chain verification process, leveraging the parallelism nature of UTXO to improve transaction efficiency.

If you think it’s just a Uniswap for the Bitcoin ecosystem, then you’re mistaken. In addition to standard swaps, UTXOSwap also supports limit order and Time-Weighted Average Price (TWAP) transactions because it is intent-based. For instance, users can actively express their trading intents, such as “exchange 10 A tokens for at least 20 B tokens”, instead of passively accepting the market price.

Another example is Stable++, a decentralized, over-collateralized stablecoin protocol. It issues $USDPP, the first stablecoin on RGB++ Layer. Stable++ build over-collateralized vaults and liquidation modules efficiently with the powerful Turing-complete programability of RGB++ Layer. As a user, you can collateralize $BTC or $CKB and mint $USDPP, a stablecoin compatible with all UTXO chains. You can circulate it freely within the Bitcoin ecosystem.

Overall, the atomicity of the UTXO model enables UTXOs to function like Legos, allowing assets from different chains to interact and integrate, thereby spurring more DeFi innovation. This will foster the development of BTCFi, benefiting the entire Bitcoin ecosystem.

The interoperability layer of the UTXO world

RGB++ Layer serves as an inclusive layer that can connect with all UTXO chains, creating a universal interoperability layer of the entire UTXO world. This allows various assets from UTXO chains like Cardano, Dogecoin, BSV, and BCH to seamlessly integrate into the Bitcoin ecosystem, breaking down asset silos.

The unparalleled feature of RGB++ Layer is Bridgeless Cross-chain Leap. This mechanism enables an asset on a UTXO chain to leap to another UTXO chain without bridges. For example, if Alice wants to transfer her RGB++ asset from the Bitcoin chain to the Litecoin chain, she first needs to spend the corresponding Bitcoin UTXO bound to her RGB++ asset. Then, a transaction should be constructed on RGB++ Layer to change the unlocking condition of the Turing-complete UTXO to her Litecoin UTXO. In this way, the leap from the Bitcoin chain to the Litecoin chain is successful.

With this feature available, technically all RGB++ assets can be regarded as universal assets of the entire UTXO world because there are no longer barriers between chains, allowing assets to move freely.

Imagine this: you can use A token issued on the BTC chain and exchange it for B token on the Cardano chain through a decentralized exchange. You can use a meme coin from the Dogecoin chain to play GameFi on a Bitcoin Layer 2 DApp chain. You can use a DOB from the CKB chain to subscribe to services on Nostr, and more. This elevates the interoperability of RGB++ assets within the UTXO world to unprecedented heights.

Vision for the future

Looking ahead, the Bitcoin ecosystem will be connected into a cohesive whole because of RGB++ Layer. Various UTXO-based assets, including inscriptions and runes, will flow seamlessly on RGB++ Layer, significantly enhancing the liquidity of the Bitcoin ecosystem. Innovations in BTCFi protocols such as decentralized trading, lending, and farming based on UTXO model will continually emerge. Ultimately, BTCFi will flourish, leading the Bitcoin ecosystem into a new era of prosperity.

Written by: Chester, Research Lead of UTXO Stack