Bitcoin is currently the largest and most well-known cryptocurrency, renowned for its decentralization and blockchain technology. Due to its high level of decentralization and security, Bitcoin is considered the global reserve cryptocurrency. However, Bitcoin has certain limitations in terms of composability and scalability. With the continuous evolution of solutions, Ethereum introduced a blockchain with a Turing-complete programming language, challenging the base layer's scalability for a decentralized application ecosystem due to its composability. Additionally, the development of Ethereum Layer 2 solutions has led to unprecedented growth in the Ethereum ecosystem. Yet, the integration of smart contracts into Bitcoin remains an unresolved issue. Given the relatively lower value and utility of Bitcoin's Layer 2 applications, there is substantial room for development in building Layer 2 solutions on Bitcoin.
Currently, the BTC ecosystem has various technologies for constructing Bitcoin Layer 2 solutions, including state channels, sidechains, multi-signature rollups, and potential Bitcoin soft fork proposals to implement ZK and OP rollups. Lightning Network and Liquid multi-signature have already proven to be successful Bitcoin Layer 2 solutions. This article introduces a new concept, the Botanix protocol.
The Botanix protocol is a decentralized chain solution built on top of Bitcoin. It utilizes the fundamental principles of the Lightning Network to run the Ethereum Virtual Machine (EVM). Botanix replaces Bitcoin's Unspent Transaction Output (UTXO) model with an Ethereum-like account-based model. Each Botanix full node will run both the BTC core protocol and the Botanix protocol.
Botanix Labs proposes building a second layer on top of Bitcoin with full Ethereum Virtual Machine (EVM) equivalence. By leveraging Bitcoin as the most decentralized and secure foundational layer, the second layer will unlock new possibilities for the composability, ecosystem, and capabilities of Ethereum smart contracts. This introduces the concept of Spiderchain—a second-layer design on top of Bitcoin optimized for decentralization, providing users with a broader range of application possibilities.
The core team consists of more than ten members, with many of them having over a decade of experience in the cryptocurrency field. Several team members have previously worked at Blockstream. The founder, Willem, holds dual degrees in electrical engineering and business economics from Belgium. The team has a mix of technical and marketing backgrounds but generally has an average background.
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In the current landscape of Bitcoin's layer 2 and sidechains, solutions like the Lightning Network provide decentralized second-layer technologies but face limitations related to liquidity, ecosystem, and Bitcoin's UTXO constraints. Federated multi-signatures and Op Rollup solutions offer composability and flexibility but come with centralized characteristics.
The Botanix protocol, on the other hand, is a second-layer Ethereum Virtual Machine (EVM) built on top of Bitcoin. Botanix adopts a Proof of Stake (PoS) consensus mechanism, requiring participants to stake real Bitcoin on the Bitcoin layer to secure the entire second layer. The entire protocol operates on top of Bitcoin, allowing users to natively use Bitcoin in any application built on the EVM. The second-layer protocol is optimized to allow anyone to participate and run full nodes. Bitcoin on Botanix is locked into Spiderchain and secured through collateral provided by a continuous multisignature controlled by a random subset of Orchestrator nodes. Therefore, moving from the Bitcoin base chain to the second layer introduces an additional trust assumption: no single party controls the set of collateral providers. The Botanix protocol can be implemented on Bitcoin without the need for any Bitcoin Improvement Proposals (BIPs).
The Botanix network introduces smart contracts, which cannot be implemented on Bitcoin directly, similar to how Lightning Network operators work, moving the complex parts off-chain to ensure the correct state of the Botanix blockchain. The entire second-layer network operates as a blockchain, allowing other users to create new wallets and deploy smart contracts on the protocol.
The Spiderchain
Botanix introduces the Spiderchain, which is a new mechanism for the second layer blockchain. Spiderchain is a series of consecutive multi-signature wallets created among Botanix Orchestrators. By managing these multi-signature wallets in a decentralized manner, security is ensured. This continuous chain of multi-signatures creates a network to safeguard Bitcoin assets on the Botanix chain. This "moving" multi-signature chain can be considered a form of collateral, locked within this decentralized multi-signature network, hence the name Spiderchain.
The key role of Spiderchain is to separate Bitcoin assets from the Bitcoin blockchain. By protecting Bitcoin on Botanix through a distributed multi-signature chain, it isolates Bitcoin from the Ethereum Virtual Machine (EVM). This enables a transition from Bitcoin's UTXO model to the account model used in the EVM.
The visual diagram below illustrates Spiderchain. Every time a Bitcoin block is generated, new multi-signatures are created among different random Orchestrators.
Security relies on incentives and the number of Orchestrators. Therefore, all Orchestrators must provide a certain amount of collateral before participating. This collateral will be used as compensation in case of malicious behavior. Spiderchain's security follows a proof-of-stake model, ensuring mathematical guarantees of security as long as the number of malicious participants is significantly lower than other Orchestrators.
Botanix Blocks
The Botanix blockchain consists of three main components during normal operation. Firstly, it checks for transactions sent by users from the Bitcoin main chain to Orchestrators (this is the process of bringing Bitcoin into the Botanix network). Secondly, it executes the necessary state changes to create a new block. Finally, at the end of each cycle, new unspent transaction outputs (UTXOs) are created to facilitate the movement of assets from Spiderchain back to the main chain (this is the process of retrieving Bitcoin from the Botanix network).
Check for assets being sent to Botanix Orchestrators (Coordinators). If there are, asset introduction operations are performed.
Execute the consensus and state change process of Botanix. This part can be likened to Ethereum's block processing.
Check if there are assets that need to be moved from Botanix to elsewhere. If so, asset retrieval operations are carried out. It's worth noting that due to the different processing speeds of the Bitcoin blockchain and the Botanix blockchain, in most cases, the first and third parts involve updating the UTXO transaction pool. Bitcoin generates blocks at a rate of approximately one block every 10 minutes, while Botanix runs at a speed of about 12 seconds between each block. In between Bitcoin blocks, Botanix generates its own blocks containing transactions on the Ethereum Virtual Machine (EVM). Upon receiving new Bitcoin blocks, Botanix executes the above steps to ensure the confirmation of transactions on the EVM chain.
Botanix EVM
Botanix operates a full Ethereum Virtual Machine (EVM) execution client, which is nearly identical to the Ethereum network itself. It has the capability to execute all the same smart contracts and decentralized applications (DApps) as Ethereum. It doesn't need to generate any performance-limiting proofs of validity because its security relies on Spiderchain. Botanix EVM powers the runtime environment of the Ethereum network, allowing the execution of smart contracts written in Solidity and other programming languages. By running a full EVM client, Botanix can support all the same functionalities as Ethereum.
While Botanix is functionally equivalent to Ethereum, it remains an independent network with its own unique features and characteristics. For example, it employs a different Proof of Stake (PoS) consensus algorithm and leverages the decentralization and economic structure of Bitcoin.
Orchestrators
Orchestrators play a crucial role in the Spiderchain protocol, responsible for managing and safeguarding the Botanix protocol.
When entering Spiderchain, new Orchestrators need to express their interest to the current block's Orchestrator and place a certain amount of collateral in a multi-signature wallet. This process is completed after confirmation on the Bitcoin blockchain, making the new Orchestrator a full participating node.
When exiting Spiderchain, an Orchestrator needs to notify the current block's Orchestrator of their intention to exit and sign an exit message. The exit process then commences, including the replacement of multi-signatures and the return of collateral. If an Orchestrator exhibits improper behavior, such as inactivity, incorrect block proposals, erroneous multi-signature signing, or faulty verification, they face the risk of having their collateral deducted. Inactive Orchestrators lose block rewards and may ultimately be removed. These rules ensure the smooth operation and security of Spiderchain.
Botanix EVM
Botanix operates a full Ethereum Virtual Machine (EVM) execution client, which is nearly identical to the Ethereum network itself. It has the capability to execute all the same smart contracts and decentralized applications (DApps) as Ethereum. It doesn't need to generate any performance-limiting proofs of validity because its security relies on Spiderchain. Botanix EVM powers the runtime environment of the Ethereum network, allowing the execution of smart contracts written in Solidity and other programming languages. By running a full EVM client, Botanix can support all the same functionalities as Ethereum.
While Botanix is functionally equivalent to Ethereum, it remains an independent network with its own unique features and characteristics. For example, it employs a different Proof of Stake (PoS) consensus algorithm and leverages the decentralization and economic structure of Bitcoin.
Orchestrators
Orchestrators play a crucial role in the Spiderchain protocol, responsible for managing and safeguarding the Botanix protocol.
When entering Spiderchain, new Orchestrators need to express their interest to the current block's Orchestrator and place a certain amount of collateral in a multi-signature wallet. This process is completed after confirmation on the Bitcoin blockchain, making the new Orchestrator a full participating node.
When exiting Spiderchain, an Orchestrator needs to notify the current block's Orchestrator of their intention to exit and sign an exit message. The exit process then commences, including the replacement of multi-signatures and the return of collateral. If an Orchestrator exhibits improper behavior, such as inactivity, incorrect block proposals, erroneous multi-signature signing, or faulty verification, they face the risk of having their collateral deducted. Inactive Orchestrators lose block rewards and may ultimately be removed. These rules ensure the smooth operation and security of Spiderchain.
Security
Balancing Multi-Signature Size and Collateral
Spiderchain provides dual security measures for locked funds:
Firstly, by design, funds are stored on the Bitcoin layer and secured within multi-signature Spiderchain wallets. This means that even in the presence of malicious Orchestrator nodes, they cannot access the Bitcoin in Spiderchain without approval from other nodes. This requirement for multi-signature approval applies to all fund operations.
Secondly, there is an additional security measure through incentive mechanisms. Every Orchestrator node is required to provide a certain amount of collateral as an economic guarantee. This means they have an economic incentive to ensure they operate correctly, as any violation of rules or improper behavior may result in a portion of their collateral being forfeited. This incentive mechanism helps maintain the network's normal operation and security.
The size of multi-signatures is a trade-off consideration in protecting funds stored on the Bitcoin blockchain. If it's too large, signing it may take a long time and coordination issues could arise. Additionally, if a malicious entity gains majority signing authority, they could access all the funds in Spiderchain. Therefore, splitting collateral into smaller multi-signatures can reduce risk, but if they are too small, it might compromise the security of protecting funds from malicious attacks.
Collateral is used to ensure the proper operation of Orchestrator nodes. To participate in the Spiderchain network, Orchestrator nodes must provide a certain amount of collateral to guarantee their participation. This prevents a single entity from running multiple nodes, thereby preventing Sybil attacks. If an Orchestrator node behaves improperly, such as going offline, engaging in malicious activities, or disappearing, they may lose a portion of their collateral.
Liveliness refers to the normal operation of the Botanix chain and participants within multi-signatures. If participants remain unresponsive for an extended period, they may lose a portion of their rewards and, eventually, be removed from the multi-signature. Additionally, certain behaviors, such as proposing incorrect blocks or incorrectly signing multi-signatures, are considered malicious and lead to collateral deductions.
These measures are in place to ensure the security and stable operation of the Spiderchain protocol.
2. Private Key Protection
Forward security is an essential property of cryptographic systems used to protect against secret key exposure. In the case of Botanix, forward security means that even if an attacker gains control of a 2/3 majority, they still won't have ownership of most keys from previous multi-signatures. Instead, attackers would only have a majority ownership of future-generated new multi-signatures. This ensures the security of previous multi-signatures remains uncompromised, and the protocol can take appropriate measures to mitigate attacks. Through Spiderchain's design, Botanix achieves forward security, providing a higher level of security and safeguarding the system against potential threats.
3. Inheriting BTC Security
Botanix's security relies on the security of Bitcoin, particularly the security features provided by its Proof of Work (PoW) system. If the security of Bitcoin is compromised, it would also have a negative impact on Botanix's security. Therefore, Botanix depends on the security advantages of Bitcoin's PoW system to ensure the security of its own network. Specifically, it leverages Bitcoin to mitigate three risks in the Proof of Stake system: centralization, random validator selection, and finality.
Twitter: 1,331 followers, moderate fan engagement.
Discord: 459 members, Telegram: 469 members, with less than twenty percent activity.
Overall, the project's community engagement is moderate and still in its early stages.
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Advantages:
Security: Botanix's security relies on Bitcoin's PoW system, giving it a level of security comparable to Bitcoin itself. Bitcoin is one of the most secure blockchain networks to date, and Botanix benefits from this security.
Decentralization: Being a second-layer blockchain, Botanix continues Bitcoin's decentralization ethos, allowing anyone to participate and run full nodes. This helps maintain the network's decentralized nature.
EVM Compatibility: Botanix supports the Ethereum Virtual Machine (EVM), meaning it can run Ethereum-compatible smart contracts and decentralized applications, offering developers a wide range of application possibilities.
Forward Security: Botanix achieves forward security through Spiderchain's design, ensuring the security of previous multisignatures even if an attacker gains control.
Risks:
Dependency: Botanix's security heavily depends on Bitcoin's PoW system. If Bitcoin's security is compromised or subjected to an attack (currently considered highly unlikely), Botanix may also be affected, meaning its security is constrained by external factors.
Competition: Botanix operates in a competitive cryptocurrency and blockchain landscape. Currently, there are no well-established projects within its ecosystem, and it needs to compete with others to attract developers and users.
Speed: Bitcoin and Botanix have different block generation speeds, which could lead to additional waiting times for cross-chain transactions to be processed. Botanix has a faster block generation speed but is still slower compared to Ethereum.
In summary, Botanix, as a second-layer blockchain system built on top of Bitcoin, has certain advantages but also faces challenges related to dependency and competition. Its security and decentralization properties make it competitive in some aspects, but it needs to overcome technical and market barriers to achieve widespread adoption.