Demand for Bitcoin block space is growing, but the ecosystem infrastructure is groaning. ExSat, a new Layer 2 for Bitcoin, has developed a technology stack that combines the trust and security of Bitcoin with the modular capabilities of EOS RAM to deliver a layer that unlocks new scalability and functionality for the grandaddy of all blockchains.
Bitcoin has long been the most significant source of value in the blockchain ecosystem. It accounts for around half of the total market capitalization of all cryptocurrencies, and the popularity of regulated Bitcoin ETFs, creating a sustainable source of demand, seems likely to cement this position for the long term. However, the vast majority of financial experimentation and innovation still takes place away from the main Bitcoin blockchain.
Despite several attempts to develop smart contract functionality over the years, none have yet proven to deliver on the various elements needed to attract users and developers. These include scalability, trust, interoperability, and utility, as well as the ability to implement complex business logic on-chain. However, innovations such as Ordinals and Runes have created renewed interest in Bitcoin. The NFT-like capabilities of Ordinals created a trading frenzy when they launched in January 2023 – one which has only gained momentum over time since volumes peaked once again during March’s price rally.
Runes have been less of a runaway success, but even so, these are important developments, demonstrating Bitcoin’s ongoing appeal and showcasing novel sources of transaction revenue for miners. However, they expose an even more compelling need for scalability solutions for Bitcoin.
EOS launched five years ago as an early rival to Ethereum, offering superior processing and indexing capabilities for hosting decentralized apps. However, EOS RAM, enabling on-chain storage of block data, has also proven to be a valuable utility tool for Web3 developers, particularly since the project halted RAM inflation back in January of this year.
Now, EOS is gearing up to allocate a significant proportion of RAM supply to exSat, a new so-called “Docking Layer” designed to make Bitcoin more scalable and functional while preserving the OG blockchain’s trust and security.
Introducing exSat
The ExSat Docking Layer is effectively a set of protocols and mechanisms that extend the existing data consensus of Bitcoin to new transaction and data types, such as those used in smart contracts. In this way, it preserves Bitcoin’s core features of security and a trusted ledger of BTC transactions, while extending the functionality of the ecosystem into a wide array of decentralized applications.
ExSat operates on a multi-consensus technology stack that uses the established Bitcoin Proof of Work mining network to synchronize block data to exSat via its own network of Proof of Stake validators. This includes established BTC mining pools such as SpiderPool, which acts as a validator node on exSat.
ExSat also operates a data consensus extension protocol powered by EOS, harnessing the ability to parse and store data into EOS RAM. This creates a decentralized state index database for BTC ecosystem assets, including newer asset types such as Runes and Ordinals, that can be read and accessed easily by EVM-compatible smart contracts running on exSAT. The end result is a more seamless transfer of data and assets between Bitcoin and other smart contract platforms.
The project is set to be a key driver of demand for EOS RAM, and for its part, EOS is gearing up to allocate a significant amount of available RAM to on-chain storage and indexing of Bitcoin transaction data to support exSAT – over 100 GB, based on the last projections. However, EOS RAM is the key enabler for a seamless DApp user experience since it carries out all on-chain storage of transaction data and indexing of Bitcoin assets. Thus, in the context of exSAT, EOS plays a key role in bridging the Bitcoin ecosystem to other Layer 2 scaling solutions and also ensures high transaction throughput with low latency.
Given its enduring appeal and ability to attract funding from far beyond the crypto ecosystem, Bitcoin’s role remains central to the success of the broader digital asset sector. As innovators have continued to develop Bitcoin’s functionality, demand for block space creates further imperative to deliver solutions that can accommodate this fresh influx of traffic. By tapping into available resources and leveraging the strengths of the wider blockchain ecosystem, exSat creates a compelling case for future Bitcoin value that extends far beyond its market cap.