Building Modular Bitcoin L2 With BTC Shared Security | Matt Ye - Lorenzo Protocol

I'm the founder of loronzo protocol so we are actually liquid staking L2 as a service uh on top of Bitcoin protocol on top of Bitcoin so today I'm going to talk about building modular Bitcoin L2 with BTC share security all right so the first question is what is BDC share security so basically Bon is the first team actually invented the concept of BDC share security and Bitcoin staking protocol so basically it is a two-sided Marketplace between stakers and also the POS system systems happy to take BTC staking and for security and happy to yield rewards for them so what's so great about it is actually two points one is that we can using the 21 million Bitcoins about $2.33 trillion us to enhance the security and Trust of the whole web 3 world so the reason ethereum is so stable so being trusted and so great as of today is because like the East token has the great market cap it can be used to secure the network and building trust for other builders and users and Bitcoin has like even bigger market cap so if we can use Bitcoin to secure the whole network it is going to be the greatest thing to happen so this is one thing and also the other reason for doing that is everyone is so excited about Bitcoin defi about like new utilities of Bitcoin as of today but the thing is why should Bitcoin trust all these L2 and decentralized systems and the reason for that is any system as long as you are secured by Bitcoin share security you can be trusted by Bitcoin and become a legit Bitcoin L2 so I think there's something wrong with the display um I'll see if I can fix it real quick I think it's yeah I think it's getting better now we'll see okay so we want to take liquid uh take Bitcoin staking one step further is that to create liquid staking on top of Bitcoins so a few problems with Bitcoin staking is that if you if you like stti to these POS for Bitcoins it's actually losing liquidities especially like bitcoin price today is like highly volatile it could pump from like 51,000 to 64,000 actually like this week like within just 5 days and it's up like 21% so we definitely do not want lose liquidity for like one week or two and also too so current thing is that with bablon there is no like small amount of staking so like you only have to stake to a month that you can become validators of at least one pos so this is not very friendly for retail stakers and we want to take that into account and also there is a risk of being slashed so there are like you know this P there all these kinds of things could happen to these POS like they could have design flows they could be like controlled by the malicious majorities and also there could be operator system errors that causing the assets to be slashed so on top of that we actually build this uh loronzo liquid staking so the loronzo liquid staking allows stakers to keep liquidity of the Bitcoin stakings by getting liquid staking tokens at the same time and also one more thing is that a lot of the problem with BDC staking is that a lot of these POS would have concerns if we got staked by your tokens that sort of kind of reduce their tokens Utilities in terms of staking and also paying rewards for that so what we're going to do in return is that if you can be sted by B P like Bitcoins in a p and getting secured by Bitcoins we can actually trust you in putting more liquid Bitcoin tokens into that ecosystem like it's more safe to do so so if there is1 billion US dollars of Bitcoins to be used to secure the POS Network which also means there's also 1 billion St BDC the liquid staking bdcs being created to the defi ecosystem in those POS systems this is like the new like wave like the Giant Wave of liquidity is injecting into any of these defi ecosystems and also we accept like retail stakers is that we going to do like the staking aggregations into one delicate account and also stake that to the Bon chain and also we will provide a number of mechanisms to guarantee the sa like safe staking and mitigate the chance and the loss when the slash events happens so the one complication between like Bitcoin staking and ethereum staking is that ethereum staking is like more simple because everybody Stakes to ethereum this is like the biggest pool of staking and it's like also like hopefully providing the highest yield for staking as well so there is like no portfolio management and there is like no difference in different people staking positions it's just basically everybody Stakes to bit Stakes to ethereum but for Bitcoin staking it's kind of different because Bitcoin is not a POS system it does not need to be staked by Bitcoins but like all these different POS outside of Bitcoin needs to be staked by Bitcoin so different people could have different opinions on which POS system they want to stti to so different people having different opinions so it's very difficult to get everyone to stake on the same portfolio so to make things easier we actually provide this thing called liquid staking plans so for the liquid staking plans it contains like a few things one is the portfolio of POS systems that to be staked or to be restak and also the lens of the staking Cycles which that you cannot be in stake during this staking cycle and also the last one is the unique delegate Vault associated with the liquid staking plan which is a custodial multi- signature Bitcoin account on top of the Bitcoin Network so this is like the liquid staking plan and for that so we also going to do some like portfolio management kind of stuff is that we're going to create a number of different liquid staking plans of different portfolios and also different staking plans so stakers can choose the right plan and the right portfolio for them and also the right staking Cycles based on their like like liquidity tolerance and also uh the yield expectation as well so we're going to create this stbt TC which is the liquid staking tokens uh with every like assets being create every BDC tokens to be staked to secure the networks and the value of this stbtc can be derived by this equation which is the BTC intrinsic value plus the staking reward with the BTC share security and once you got this stbtc you can just reinvest it into the defi ecosystem and Grant you extra rewards and also minus the SL punishment so in order to like make it more promising and also keep this like the values packed as between stbtc and BTC we need to like mitigate the chance of Slash stashable conditions to happen and also in order to like manage like BTC staking BTC liquid staking and also the distribution of rewards so we need to create this loronzo app chain so this is the evm compatible chain in the cosmos ecosystem will create features for user to manage liquid staking through Babalon so uh it provides basically the trust assumption is like two things so our app chain is secured by BTC share security which is staked by Bitcoins and also we have this block encoring mechanisms is that for our app chain every 3 seconds is generate a normal block and every 10 minutes it generated an anchor block between Bitcoin Network and our app chain so we write the block uh bitcoin's block headers into our chain and also we write our block headers into the Bitcoin chain as well to achieve a two-way anchoring we also have this loronzo Dow so it has like a few features with our native token uh holders so they decided so what the portfolios to be approved and also they they voting on the commission fees we were charged for providing the service and also voting on important governance uh issues and also executing on security uh like rules so the whole user Journey would be like this so Staker would come to us to pick all of this POS to stake to and find the the the delegate vote on the Bitcoin Network and then they can just like lock up their assets to this delegate Vault associated with that plan and we could confirm that their staking is in place and all these staking will be start to working so and also like the the note stakers can just uh delegates to these operators they want to be assigned as as validators in those POs networks through bablon and also if they want to endake they can like request for endake on our app chains so we're going to process that so by the end of the current staking Cycles will be like return the Bitcoins to them and also like distributed other rewards during their staking period to them as well so like why and we need to adopt like Bitcoin Securities and how can we use that to actually scale Bitcoin right so there's like a proven successful way to like expand and to scale ethereum has been modularity so if you look at this graph with all these like different projects like icons in it actually like ethereum essentially today is just a DA though it's like a very powerful da with all of the smart contract execution and settlement consensus storage has everything in it but there are other alternative Solutions come up to scale it including like Igan DN centia like ail and all these projects for da and also for rollup s dks and also share sequencers and also L2 is a service on top of that so why don't we do the same thing on top of Bitcoin as well so Bitcoin essentially is just a d which is too slow and too expensive and lacking the execution of like touring complete programs so of course I think we can do that so the idea is the similar so we can use da to expand the storage we can use consensus and settlement to like expand like the settlement powers and also we can create different VMS on top of that to making it more friendly with developers like like editing like like coding with different languages and we provide measurement tools on top of that so the question come like why should we trust any of these modules it's like ethereum so why would ethereum trust any of these decentralized systems like used to scale it is because like they are kind of secured by ethereum either by restating or some equivalent ways so everyone is on the same trust base so we can do the same thing for Bitcoin as well so as long as these different modules used to scale Bitcoin are all staked by BTC and adopting BTC share security then like we are all on the same trust basis so we can use that to scale Bitcoin and Bitcoin can still trust their results they are giving it to bitcoin and also one more thing is that one more reason to do it is that we can actually using this way to settle any programmable assets on top of Bitcoin so if we think about the four components like in any like in any like programmable assets are like four things one is the metadata used to define these assets two is the executable the program associated with that programmable asset assets and also we have the state which like all kinds of state and also like supporting datas like for these assets and also four is we need to have some sort of validity to prove that the state of assets is actually correct so build on these like Primitives we can actually do such kind of things so for all of the metadata and executable and state and also validity proof or whatever proof we use to prove the states so we can all store them on a DA adopting BDC Shar security that Bitcoin can trust and that the the same time so we can write the root hash and also the reference uh like hash could like P user could find all these like supporting data on da and SLE these data on bitcoin so if we're going to use them in any of the execution evm or like other like VMS we can just load data from the two parts from Bitcoin and a DA layer and just load them into the VM we use we execute them update this dates and also we like settle them back on these two da layers and also like one point I always like to say is that the only reason that there are so many blockchains today is because Bitcoin actually didn't do a great job a perfect job as a blockchain so Bitcoin is great but it's not perfect so it's time to bring all of the greatness back to bitcoin right so with like all these like modular stack of L2 so we can actually just adopting any existing Technologies to build it on top of Bitcoin so if you use like AVM plus like like POS essentially it's just like ethereum as morphic Bitcoin L2 if we for example we use like mu VM and like aptus bft like essentially it's just an aptus as morphic Bitcoin L2 so any architectures can be like Technologies Innovation can be bring back to the Bitcoin ecosystem and also like we talked about we can actually saddle any different assets types back onto Bitcoin as well that is means to bring more users more com communities more capitals back into the Bitcoin community so we would like to talk about this like why liquid staking and also this like modular L2 stack actually has such a good Synergy is that we can actually like using more Bitcoins to secure the overall Network to allocate more tvl to like secure the entire ecosystem and at the same time we could launch L2 as a service to help launching any like Bitcoin l2s or Bitcoin app chains to solving all these kind of problems to scale Bitcoins to bring in more users like more revenues and more capitals so like with more tvl we go more revenue and more income and with more revenue and more incomes we can get more tvl to secure the overall Network so that's pretty much what I want to talk about so we still have like six minutes so feel free to follow our social uh Network and also uh we have like a boost at the 206 so feel free to come by and have a chat with us and also we are hiring so if you're interested in joining our team so please email to Career lorenzo. dproc doxyz yep so uh if you any ask if you have any questions questions feel free just to ask me yep thank you all right I think that's it thanks everyone for coming for