The Bitcoin developer renowned for discovering a bug in the Lightning Network, leading to an emergency update in 2022, is currently engaged in developing a new Bitcoin layer 2 protocol with the purpose of expanding the applications of decentralized finance on the Bitcoin network.
The developer, known as “Burak,” who previously created a competitor to the Lightning Network called Ark Protocol, has unveiled a new initiative named “Brollups.” This Brollup protocol operates as a layer 2 solution that introduces a Bitcoin-centric rollup design, streamlining transactions without necessitating a hard fork of Bitcoin or the issuance of non-Bitcoin tokens. Burak elucidated the concept of Brollups in a Medium post dated June 21, stating that the protocol is still in the design phase. He hinted at the possibility of a testnet rollout later this year.
Brollups: Enabling DeFi Use Cases
According to Burak, Brollups are designed to accommodate over 90% of DeFi (decentralized finance) use cases once it is launched. He highlighted the versatility of Brollups by emphasizing its ability to execute various operations seamlessly, such as trading NFTs for Bitcoin or placing token sell orders on decentralized exchanges. These transactions are performed atomically, ensuring verifiability, scalability, and enforceability on the Bitcoin network.
Burak emphasized that Brollups are deeply integrated into Bitcoin, functioning harmoniously with Bitcoin as a fundamental payment mechanism.
Operational Structure of Brollups
The management of Brollups will be overseen by "operators" who will contribute liquidity to the protocol. These operators will advance the state of the rollup by linking Bitcoin transactions at regular intervals. Transactions within the Brollup protocol will be processed on the Bitcoin Virtual Machine.
Burak was commended within the Bitcoin community for developing Brollups without the necessity of modifying the Bitcoin protocol through a hard fork or introducing a new digital token.
Evolution from Lightning Network Exploitation to Scaling Innovation
Burak gained prominence in October 2022 by exploiting a vulnerability in the Lightning Network using a 998-of-999 multi-signature Taproot transaction. This exploit prompted an emergency update for Lightning Network node operators after causing temporary desynchronization among all nodes.
Despite the absence of fund theft in the transaction, the incident underscored an unintended consequence of the Taproot upgrade, as noted by industry experts at that time.
The utilization of Taproot transactions surged with the introduction of the Ordinals protocol by Casey Rodarmor in January 2023, accounting for a substantial portion of Bitcoin transactions. However, the percentage of Taproot transactions has witnessed fluctuations, as revealed by a Dune Analytics dashboard.
In addition to Brollups, projects like Drivechain and Spiderchain are also dedicated to enhancing DeFi capabilities on the Bitcoin network.
Burak's earlier initiative, Ark, introduced in May 2022, focused on streamlining payments within the Bitcoin ecosystem by eliminating the reliance on payment channels.
