A new market for Bitcoin non-fungible tokens (NFTs) aims to reduce the network fees associated with the appearance of Bitcoin serial number inscriptions by leveraging the Internet Computer Protocol (ICP).
Developed following the creation of Bitcoin Serial Numbers in early 2023, Bioniq runs on ICP and leverages its native Bitcoin integration to power transactions based on Bitcoin Serial Number inscriptions.
In an interview with Cointelegraph on the eve of the platform’s launch, Bioniq CEO and co-founder Bob Bodily said that the project has been in development since February 2023. The team built a marketplace on ICP featuring Ordinals smart contract auctions, a complete cross-chain wallet between Bitcoin and ICP, and inscription tools.
“Just two weeks after Casey Rodarmor released Ord 0.4.0, I knew Ordinal was going to be huge.”
The Bioniq team highlighted the growth in market capitalization of the BRC-20 token since its launch in January 2023. The market capitalization now exceeds $3 billion, and more than 42.6 million Ordinals have been minted to date. This directly impacted Bitcoin network congestion, causing Bitcoin (BTC) transaction fees to spike for the first time since 2021.
Bioniq’s platform has a smart wallet for users to manage private keys using Web3Auth. This allows users to log into the platform using traditional Web2 Google accounts while maintaining non-custodial control of their wallets and assets.
The platform also integrates the use of Partially Signed Bitcoin Transactions (PSBT) via ICP’s Bitcoin network. This unlocks Bitcoin’s smart contract capabilities and eliminates the need for users to use centralized cross-chain bridges.
ICP is the “magical Bitcoin sidechain”
The ICP-based build also allows Bioniq to claim transaction final times of less than two seconds and zero gas or network fees. Its architecture provides optimized storage costs, averaging approximately $5 per GB of data stored per year.
Bodily added that Toniq, the studio behind Bioniq, has been developing on ICP since May 2021 and has extensive experience in building smart contract wallets, markets, NFT launchpads and collateralized NFT lending protocols:
“ICP is a great Bitcoin sidechain right now because it has great Bitcoin primitives at the protocol layer.”
Bodily explained that ICP runs a Bitcoin light node that runs entirely on-chain, which facilitates reading of the Bitcoin blockchain through native smart contract calls. ICP also has a threshold digital signature algorithm. known As an elliptic curve digital signature algorithm. This implementation allows ICP smart contracts to sign layer 1 Bitcoin transactions and broadcast them to the mempool.
“These protocol primitives also allow us to build Ordinals wrappers entirely at the application layer; we don’t have to touch the consensus layer of the protocol at all. Therefore, building Bitcoin technology on ICP is now very fast.” Bodily added.
Bitcoin users and trust assumptions
Cointelegraph also asked whether Bioniq’s packaging process could be a potential barrier to entry for users. Bodily admitted that while the process is largely automated by the Bioniq wallet and only requires BTC, there are two considerations relevant for more discerning users.
“Packaging requires a Bitcoin transaction. This means you have to pay to package. This is a significant obstacle. One way we solve this problem is to integrate the open Nostr PSBT list into Bioniq,” Bodily explained.
This integration means that PSBT lists stored on Nostr through the decentralized Ordinals marketplace OpenOrdex or Deezy Place will be accessible on Bioniq. He added that it eliminates the need to wrap Bitcoin transactions as users can list directly on Bioniq using Open PSBT.
Perhaps more importantly, Bodily explained that the packaging process requires “trust assumptions” for both protocols:
“Moving to ICP means that in addition to trusting Bitcoin, you now also trust the Internet Computer Protocol. Some Bitcoin users do not want to take the counterparty risk of bridging assets to another chain.”
Bodily added that Bioniq is focused on developing the user experience before inheriting the security of Bitcoin, which is guaranteed by the finality of first-layer transactions. However, he envisions a “good path to decentralization” for applications like Bioniq.
This will involve evolving from a sidechain built on a sidechain with additional trust assumptions to becoming a Bitcoin sovereign rollup on a trust-minimized ICP. The final step will enable Bioniq to become a Bitcoin zero-knowledge rollup (ZK-rollup) on ICP, requiring no additional trust assumptions and inheriting the full security and decentralization of Bitcoin.
“ICP is also a good fit for this initiative, as ICP can provide a replicated execution environment (decentralized sequencer) or validity (additional non-Bitcoin storage for aggregation).”
Reliance on Bitcoin’s Value Proposition
Many NFT marketplaces already offer Bitcoin Ordinals auctions and trades, which begs the question of what a dedicated Ordinals platform would bring to the ecosystem.
Bodily believes existing products featuring Ordinals on its platform are hampered by a confusing user experience. The development of “Bitcoin Ordinals Market built natively for Bitcoin users” depends on the development of native cross-chain BTC-ICP wallets.
Additionally, Bitcoin’s undisputed status as the highest and largest cryptocurrency by market capitalization remains another attraction for continued interest in Bitcoin NFTs in the future.
“If you look at the numbers, 89% of the world has heard of Bitcoin, Bitcoin accounts for about 50% of the total cryptocurrency market capitalization, and Ordinals have surpassed $500 million in trading volume this year — so The demand is huge.”
Bioniq joins the ranks of Ordinals Market and others as an Ordinals market that only supports Bitcoin. Gamma is another Ordinals market that directly mints the first layer of Bitcoin chain. Ordswap was an early marketplace for Ordinals that has now shut down after hackers lost control of the site. Meanwhile, multi-chain platforms such as Magic Eden prominently list Bitcoin Ordinals NFTs.
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