Exploring the Bitcoin Newcomer: Fractal Ecological Revolution or Trendsetter?

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

First of all, the overall market is currently sluggish and lacks fresh narratives. Secondly, based on the previous generous airdrop practices of a certain wallet, many users are highly attentive to the launch of Fractal, leading to extreme competition even during the testnet phase, with an estimated tens of millions of addresses participating in the corresponding testnet tasks to compete for airdrop rewards. Finally, similar to the high return effects brought by certain asset protocols, as the profit effect continues to ferment, the popularity of Fractal is also continuously rising.

In addition, the hunger marketing by relevant parties also contributed to the surge. Originally, the circulating supply of FB for airdrops was very small, but as competition on the chain intensified, the price of FB skyrocketed, becoming a kind of "golden shovel" in a sense, which indirectly accelerated the development of Fractal.

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

Fractal Overview: Bitcoin Scaling Native Solution

Fractal is a recursive expansion solution that extends infinitely based on the core code of Bitcoin. It is designed as a second layer network or sidechain for Bitcoin, serving as a native expansion of the first layer network, improving transaction efficiency by accelerating block generation and increasing block capacity while maintaining orthodoxy. Its working principle includes full compatibility with the Bitcoin mainnet, while providing faster confirmation times such as 30 seconds per block and a block capacity 20 times that of the mainnet.

As a native expansion 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 is a rotating multi-signature mechanism with dynamic replacement, while also considering specific aspects of the BRC-20 standard.

Fractal is functionally 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 with innovation. At the same time, it allows users to participate and provide feedback in a real environment, similar to the significance of EVM layer two networks to Ethereum.

Investment and Financing: Strong Partnerships to Promote Development

The Fractal network was developed in collaboration with a well-known Bitcoin wallet and a crypto-native fund. As the main driving force, the wallet has over 900,000 active users every week and has received five rounds of undisclosed funding, two of which were led by well-known exchanges, with multiple capital firms participating.

The partner is a crypto-native fund with a portfolio that includes multiple well-known projects, and has extensive experience in USD Series A exits and 100x investment projects, as well as in developing globally-used blockchain applications. Overall, the wallet provider's resources are more prominent, having attracted a large number of loyal users through a successful brand structure and previous generous airdrops, undoubtedly making it the best endorsement for Fractal.

With the resources from both parties, Fractal has implemented a series of plans to initiate user and developer participation. After the mainnet launch, 1 million FB tokens were distributed to over 100,000 eligible addresses, and several developer funding programs were carried out, showcasing the ambition for ecological development.

Fractal Highlights: Advantages Stand Out

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

• Fully compatible with Bitcoin mainnet
• Faster block time ( 30 seconds )
• Larger block capacity ( mainnet 20 times )
• Supports smart contracts
• Introduce the OP_CAT opcode
• Native asset ( issued as CAT20)
• Decentralized bridging assets

The overall design allows assets such as Bitcoin, BRC-20, and Ordinals to be bridged through a decentralized bridge. Users' transaction records on the Fractal network will then interact or synchronize with the Bitcoin mainnet, while providing faster confirmations and greater capacity.

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

( multi-layer expansion mechanism

Fractal enhances transaction speed through recursive expansion layers, establishing multi-level expansion layers on the main chain to form a tree structure. Each layer can further branch out, increasing parallel processing capability. Each layer independently processes transactions and can dynamically adjust the number of layers. During peak times, it rapidly increases layers to handle more transactions, flexibly responding to various loads.

This is equivalent to being able to build countless "highways" that run parallel to the Bitcoin mainnet. Each road can expand the mainnet and can also expand another road. Each has its own characteristics, allowing users to solve congestion issues without changing their "vehicles".

) Rhythm Mining

Fractal uses the same proof-of-work consensus as Bitcoin, which means BTC miners can seamlessly switch to Fractal mining using existing ASIC, GPU, and other hardware, achieving a win-win situation by improving efficiency through shared workload and providing additional income for miners.

Mining is divided into permissionless and merged mining, with 2 out of every 3 blocks produced through permissionless mining and 1 block produced through merged mining. Permissionless mining allows anyone to participate, while merged mining is specifically targeted at BTC miners, enabling them to mine BTC and Fractal blocks simultaneously without the need for additional computing power.

( OP_CAT

OP_CAT is an opcode used for string concatenation in the Bitcoin scripting language, which was removed in 2010 for security reasons. It can build more complex trustless infrastructures, which are 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 BTC's New Favorite: Is Fractal an Ecological Revolution or a Follower?])https://img-cdn.gateio.im/webp-social/moments-25447cbfc1a60ccb13745d296d455bc1.webp###

Fractal Tokenomics

The Fractal mainnet mainly consumes two types of tokens: $FB as the general gas, and $SATS as the exclusive gas 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 have a lock-up mechanism, with private placements locked for six months.

Distribution Plan:

• 50% - Proof of Work mining, BTC miners can directly mine $FB
• 15% - Ecosystem Treasury, used to invest in supporting ecological projects
• 15% - Core Contributors, 7 months lock-up, 12 months linear release
• 10% - Community Subsidy, Establish Cooperation and Liquidity Program
• 5% - Pre-sale, 7 months lock-up, 12 months linear release
• 5% - Consultant, up to 20% used each year within 5 years

Currently, it is not clearly stated whether testnet users will receive airdrop rewards. Although some funds are unlikely to be misappropriated, 45% is still controlled by the authorities in the short term, which may pose risks.

To ensure transparency, the official has公布了各资金池地址, allowing tracking of usage.

![Discovering the new favorite of BTC: Is Fractal an ecological revolution or a follower?]###https://img-cdn.gateio.im/webp-social/moments-1686b51d2ee16e9d7c7eac350063e6b8.webp###

Fractal Ecosystem Overview

( CAT20

The hottest ecological protocol of Fractal currently is CAT20, which was released on September 11 with a total supply of 21 million. Although there may be risks due to unclear code and project party information, the community's promotion and KOL communication have attracted a large number of users to participate, causing on-chain Gas to soar to nearly 7000. The FB price once surged to 40U, reflecting the market's enthusiasm for CAT20.

The main innovation of CAT20 lies in the use of the OP_CAT opcode, perfectly adapting to the Fractal ecosystem. Its modular and programmable minting provides flexible and composable rules for complex DeFi applications. Another feature is that transactions are fully verified by miners, reducing dependence on indexers and enhancing security.

Currently, a certain wallet indicates that the CAT20 trading market is under research, with official resources on the way. However, the sudden freezing of the CAT20 official account has added uncertainty. The protocol is still in its early stages, and its feasibility remains to be further observed.

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

) Other ecological projects

• BTCTerminal: The original Rune project has been renamed and restructured, launching the Fractal ecosystem integrated trading market, supporting queries for Mint progress, wallet balance, etc. It previously launched a mining pool activity, allowing users to rent ASIC computing power to participate in $FB mining.

• UniWorlds: A metaverse project built on Fractal, developing a community and game toolkit for interoperable virtual worlds. It is the first large-scale application on Fractal, receiving joint investment from a certain wallet and UGC platform vendor.

• BRC20: After the function is activated, the on-chain Gas remains high for a long time, but the performance of leading projects is average, and there are situations of startup funds or studios monopolizing the market. Future development still needs to be tested by the market.

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

Participant Perspective

) retail investors

The popularity of new asset protocols and on-chain applications has attracted some retail investors, actively participating in minting and speculation. The community's strength is the main driving force. With 50% of the time cost in POW production, retail investors can grasp more chips in the short term, and this may be the best profit opportunity currently.

miner

Bitcoin miners can mine both BTC and FB simultaneously. If the Fractal ecosystem continues to improve and FB consumption exceeds production, miners can drive up FB prices for profit. Conversely, stagnation in the ecosystem will lead to a decline in FB value. When FB stabilizes in value after its launch, it may be the best time for miners to offload, and retail investors need to be cautious of risks.

( institutional investors

Large exchanges are launching relevant trading markets, and in the future, they may list FB or leverage resources to influence the Fractal ecosystem's trend. The entry of large capital brings both benefits and drawbacks; it may promote ecosystem development but could also weaken the voice of retail investors, prioritizing institutional interests.

![Exploring the new darling of BTC: Is Fractal an ecological revolution or a follower?])https://img-cdn.gateio.im/webp-social/moments-215dc211a973d39eaa4d37697f50b228.webp###

Conclusion

From the current perspective, Fractal has few innovations, primarily focusing on compatibility and optimization of the mainnet. The ecosystem is still in the exploratory phase, the prospects of new projects are unknown, and time and market validation are needed. The overall development outlook still requires observation.

![Exploring the new favorite of BTC: Is Fractal an ecological revolution or a trend follower?]###https://img-cdn.gateio.im/webp-social/moments-ff7e5a78c42e9f206763af49887b9249.webp###