Exploring Bitcoin's New Favorite Fractal: Ecological Innovation or Just Following the Trend?

Since September, the community frenzy sparked by Fractal has once again made the Bitcoin ecosystem the focus of the market. A large number of users have participated in the assets and gameplay launched by Fractal, leading to high on-chain gas fees. There are three main reasons why Fractal has generated such a big response:

First of all, the current overall market is sluggish, lacking fresh narratives. Secondly, in light of the previous generous airdrop of Pizza by Unisat, many users place high importance on the launch of Fractal, leading to extreme competition during the testnet phase, with about tens of millions of addresses participating in related tasks to compete for airdrops. Finally, the high return effect brought by asset protocols like Cat20, as the profit effect continues to ferment, further boosts the popularity of Fractal.

In addition, the official hunger marketing strategy of Unisat has also played a role in amplifying the effects. Originally, the circulating supply of the airdropped FB was very small, but as on-chain competition intensified, the price of FB soared, becoming a "golden shovel," which indirectly accelerated the development of Fractal.

Based on the reasons mentioned above, a deep analysis of Fractal becomes particularly necessary.

Overview of Fractal: Bitcoin's Native Scaling Solution

Fractal is a Bitcoin scaling solution that recursively expands upon the BitcoinCore code. It is designed as a second-layer network or sidechain for Bitcoin, serving as a native extension of the Bitcoin main layer, enhancing transaction efficiency by accelerating block generation speed and increasing block capacity while maintaining orthodoxy. Its workings include full compatibility with the Bitcoin mainnet (, allowing users to trade on the Fractal network and interact or synchronize with the Bitcoin mainnet ), while also providing faster transaction confirmations (, such as 30-second block generation ) and a block capacity ( that is 20 times 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 BRC-20, Ordinals and other assets can be bridged through a decentralized bridge. The underlying mechanism adopts a dynamically replaced rotating MPC signature mechanism, while considering specific aspects of the BRC-20 standard.

Fractal is functionally more similar to the Bitcoin testnet, supporting some features that have not yet been activated on the mainnet. It serves as a testing ground, providing a better user experience and performance optimization, making it very suitable for experimenting and innovating complex applications. At the same time, it allows users to participate, providing feedback in a real interactive environment, similar to the significance of EVM layer2 to Ethereum.

Investment and Financing: Development Momentum from Strong Partnerships

The Fractal network is developed in collaboration between UniSat and Block Space Force. As the primary developer and promoter, UniSat is a leading Bitcoin wallet, with over 900,000 active users weekly. It has secured five rounds of undisclosed funding, with two rounds led by OKX and another trading platform, and participated by Waterdrip Capital, ABCDE Capital, and others.

Block Space Force is a crypto-native fund with a portfolio that includes well-known projects such as Babylon, Pendle, and Aevo. They have decades of experience in USD A9 exits, investing in hundredfold return projects, and developing the world's most widely used blockchain applications. Overall, UniSat's resource advantages are more prominent, and its successful brand and previous generous Pizza airdrop have attracted a large number of loyal users, undoubtedly making it the best endorsement for Fractal.

With the resource promotion of both project parties, Fractal has implemented a series of strategic plans to initiate user and developer participation. After the mainnet launch, Fractal distributed 1 million FB tokens to over 100,000 eligible addresses from a certain wallet and UniSat wallet, and launched various developer resource funding programs, demonstrating Fractal's ambition for ecosystem development.

Fractal Advantages

The highlight of Fractal lies in the performance optimization and improvements based on the Bitcoin mainnet, as well as the asset issuance methods and ecological applications introduced. It can be vividly said that Fractal is a "new wine" in a "old bottle" of Bitcoin mainnet resources. Specifically:

The overall design of Fractal allows Bitcoin and assets like BRC-20 and Ordinals to be bridged through the decentralized bridge (, namely pizza swap ). Transactions on the Fractal network will then interact or sync with the Bitcoin mainnet, while providing faster transaction confirmation times and larger block capacity than the mainnet.

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

multi-layer extension mechanism

Fractal enhances Bitcoin transaction speed through recursive extension layers, establishing multiple extension layers on the Bitcoin main chain to form a tree structure. This design allows each layer to further fork, increasing the network's parallel processing capabilities. Each layer can independently process transactions and dynamically adjust the number of layers as needed. During peak transaction periods, layers can be quickly increased to handle more transactions, allowing the network to flexibly respond to various loads.

It's like building multiple parallel highways outside the Bitcoin mainnet. Each road can expand the mainnet and can also expand other roads. Each road has its own characteristics, allowing users to solve congestion issues without needing to change their "vehicles".

Cadence Mining (

Fractal adopts the same PoW consensus mechanism as Bitcoin, which means BTC miners can seamlessly shift to Fractal block mining using existing ASIC, GPU, and other hardware, achieving a win-win situation by improving efficiency through shared workloads and providing additional income for Bitcoin miners.

Fractal mining is divided into two types: permissionless mining and merged mining. Out of every three blocks, two are generated through permissionless mining, and one is generated through merged mining. Permissionless mining allows anyone to participate in the network by downloading software and running a node. Merged mining targets BTC miners, allowing them to mine BTC and Fractal blocks simultaneously without additional computing power.

) OP_CAT

OP_CAT is an opcode used for string concatenation in the Bitcoin script language, which was removed in 2010 due to security and memory concerns. It has the capability to build complex trustless Bitcoin infrastructure scripts, 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.

Fractal Token Economics

The Fractal mainnet mainly consumes two tokens: $FB and $SATS, with $FB serving as the general gas and $SATS as the exclusive gas for pizzaswap.

The total issuance is 210 million, and only the tokens produced through mining can circulate after the mainnet goes live. Other tokens have a lock-up mechanism, with private placement locked for six months.

50% - PoW mining, Bitcoin miners can directly mine $FB. 15% - Ecosystem treasury, used for investing in and supporting Fractal ecosystem projects. A maximum of 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. Locked for 7 months, linear release within 12 months. 10% - Community subsidy, used to establish cooperation and liquidity programs. A maximum of 10% of the total can be used each year for 10 years. 5% - Pre-sale, aimed at early investors and network participants. Locked for 7 months, linear release within 12 months. 5% - Consultant, providing strategic advice and support for the project. Up to 20% of the total amount may be used each year for 5 years.

Currently, the official has not clearly stated whether there will be airdrop rewards for users participating in the testnet. If there are, they may be issued from community subsidies or the ecosystem treasury. Although the 5% for advisors, 10% for community subsidies, and 15% for the ecosystem treasury are unlikely to be misappropriated by the team for dumping, apart from the 5% given to investors and the 50% allocated for mining which has a time cost, the remaining 45% is still controlled by the official in the short term, which may pose a risk.

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

• Ecosystem Treasury ###15%(:bc1pukzhdkdghqajp3zvwkx65e7uv5zma6lzalet4xauf3p5c0vdg8wqk2avv6
• Community Grant )10%(:bc1pdrqk5xv3tfpmdsuegnt5a63xucf475r3l0vqg6zulwmtzezg7h6sd2pqx3
• Presale )5%(:bc1put2rhzx0cwz552epm25dt2rexg2tzx9sws2sjcezsjm9y7h7ct8svhpzf2
• Consultant)5%(:bc1pm2h0420vmgayhzs59d5nf0mzjlf3q6vrnlpqytefe3rk6a8ku3zq59walm
• Main contributor )15% (:bc1ppvqe8ugt27kgw4trvnzjvcfzn52702tq2ahe7cgzw0jsv67vrhysvgnndz

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Fractal Ecosystem Overview

) CAT 20

Currently, the hottest ecological protocol in Fractal is the CAT20 protocol launched by CAT Protocol, which was released in the early morning of September 11, with a total supply of 21 million. The code shows traces of development by Chinese individuals, and specific information about the project party has not been disclosed. Although the lack of clarity regarding the code and project party information may pose risks, a large number of users have rushed in to participate in the minting due to community sentiment and KOL promotion, causing Fractal's on-chain gas fees to soar, peaking close to 7000. The hype drove the official token FB to be speculated up to 40U. It is worth mentioning that the founder of a certain trading platform, the CAT Protocol team, and the Great Wizard Quantum Cat team staged a "True and False Monkey King" drama regarding the CAT20 protocol, with each party holding their ground, which precisely proves the level of exposure of the protocol.

Compared to the existing Bitcoin protocol, the main innovation of the CAT protocol is the use of the OP_CAT opcode, which perfectly fits the Fractal ecosystem. Its modular and programmable minting provides flexible and composable rules for complex DeFi applications 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, thereby lowering the risk of being affected by inconsistencies or manipulations from indexers.

As of the time of writing, UniSat has stated that it is researching the CAT20 trading market, with official resources on the way. However, the sudden freezing of the official X account for the CAT20 protocol has added uncertainty. As the protocol is still in its early stages, its feasibility remains to be discussed, and further attention is needed on subsequent plans and performance.

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) BTCTerminal

BTCTerminal is quite popular in terms of Twitter followers and KOL attention. Initially, it was a provider of infrastructure for the Runes protocol, with products including the Runes browser, trading market, encyclopedia, etc. Later, it was decided to rename RunesTerminal to BtcTerminal for brand rebranding and integration into Fractal. After the renaming, it still supports related runes while focusing on the broader Bitcoin ecosystem. Currently, it has launched a comprehensive trading market for the Fractal ecosystem, where users can check Mint progress, wallet balances, etc., and will support Cat721 in the future. Recently, the official team launched a mining pool activity, allowing users to rent ASIC mining power to participate in $FB mining, with a total limit of $50,000, but specific risks and returns need to be considered comprehensively.

UniWorlds

UniWorlds is a metaverse project built on Fractal, creating an immersive environment on Fractal, developing community and game toolkits for interoperable virtual worlds, and will launch a BTC ecosystem game creation platform. UniWorlds is also the first large-scale application on Fractal developed by the UniSat team. On August 8, it was announced that the seed round of financing led by UniSat and UGC platform manufacturers had been completed. As a project that has clearly received official resource support, UniWorlds is worth following up on its development.

BRC20

The BRC20 function was activated at block 21000, and the on-chain gas fees have remained high for a long time, which has attracted some attention to Cat20 to a certain extent. However, in terms of trading volume and market capitalization, the performance of the leading inscription projects is not outstanding, and there is a common situation of startup funds or studios monopolizing the market. Whether any projects can emerge or continue to remain silent will still need to be tested by the market.

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