Lightning Network Hacker Burak Launches ‘Brollups’ Layer 2 Solution for Bitcoin

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As an experienced analyst, I believe that Burak’s latest innovation, Brollups, has the potential to revolutionize Bitcoin-based decentralized finance (DeFi) applications. Having closely followed Burak’s previous work with Ark and his exposure of vulnerabilities in the Lightning Network, I am impressed by his deep understanding of the Bitcoin ecosystem and his ability to identify and address pain points within it.

In a recent Medium article, Burak explained the concept of Brollups as a type of rollup specifically tailored for Bitcoin, featuring seamless integration with the Bitcoin blockchain. Unlike other designs like optimistic or zero-knowledge rolls, Brollups leverage Bitcoin’s infrastructure for transaction data and function through the Bitcoin Virtual Machine.

Operators contribute liquidity and progress the rollup’s status by executing Bitcoin (BTC) transactions connected through linked price data. Using virtual Unspent Transaction Outputs (VTXOs) as a base, Batched Rollups empower smart contracts to function as payable entities, thereby enabling various DeFi applications such as NFT trades and decentralized exchange deals.

As a Bitcoin analyst, I’d describe Brollups as follows: I analyze Brollups as solutions designed to cater to various DeFi applications on the Bitcoin network. These solutions facilitate atomic, verifiable, scalable, and enforceable transactions. By building upon Bitcoin’s robust security and decentralized nature, they ensure trust and reliability in handling complex financial operations.

A Broader Vision for Bitcoin DeFi

Brollups offer solutions for over 90% of Bitcoin’s Decentralized Finance (DeFi) applications. They ensure atomicity, verifiability, scalability, and enforceability in transactions, accommodating various use cases such as NFTs and Decentralized Exchanges (DEXs). By building on Bitcoin’s security and decentralization, Brollups expand its functionality.

Brollups provide a possible method for making Bitcoin-integrated Decentralized Finance (DeFi) applications more efficient and secure. By doing so, they eliminate the requirement for intermediaries and foster a more autonomous financial system.

Historical Context and Previous Exploits

In October 2022, Burak identified a weakness in the Lightning Network using a complex transaction involving 998 out of 999 required signatures with Taproot. As a result, an urgent modification was issued to operators of Lightning Network nodes.

As a crypto investor, I’ve recently come across an incident where no funds were stolen, but it brought to light potential issues with the Taproot upgrade that occurred back in November 2021. This update, which was highly anticipated since Segregated Witness (SegWit) in 2017, is designed to enhance Bitcoin’s privacy, efficiency, and smart contract capabilities. However, the incident made me ponder over the implications of these upgrades and their impact on my investments.

Although intended as a significant enhancement with a focus on enhancing privacy and efficiency, Taproot saw limited usage until early 2023. This shift occurred following the introduction of the Ordinals protocol by Casey Rodarmor, which triggered broader adoption of Taproot’s capabilities. Notably, transactions utilizing Taproot represented over half (more than 50%) of all Bitcoin transactions in December 2023. However, recent data indicates that the transaction volume has declined to roughly 30%.

Previous Innovations and Future Prospects

Burak’s earlier initiative, named Ark, was introduced in May 2022, aiming to streamline Bitcoin transactions by doing away with the requirement for payment channels. This project is intended to tackle the “inbound liquidity” issue of the Lightning Network, which necessitates users having funds ready to receive payments.

Using Brollups, Burak is once again expanding the limitations of Bitcoin’s layer 2 technologies. The Bitcoin community is eagerly anticipating the impact of Brollups and related advancements on the wider utilization and productivity of Decentralized Finance (DeFi) frameworks within the Bitcoin ecosystem.

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2024-06-24 13:24