Exclusive Interview with UniSat Founder: Fractal is Bitcoin's Most Loyal Assistant

Authors: c00k1e, Jaleel, BlockBeats

Ordinals has gone through more than a year of development. This year, we welcomed the fourth halving in Bitcoin's history and a significant update in the Ordinals ecosystem—the launch of Runes. After the launch of Runes, we witnessed a brief surge in fees during the "Rune Frenzy," the auction of "Epic Satoshis" valued at 33.3 Bitcoins, and skepticism such as "Casey Harakiri" and "Runes are dead, Ordinals is dead." We also saw many Ordinals projects that were still active in 2023 quietly come to an end, alongside countless Bitcoin Layer 2 projects emerging like mushrooms after rain.

UniSat, the beacon of the Bitcoin ecosystem for the Chinese community, continues to move forward with a low profile, always standing at the center of the Bitcoin ecosystem stage. Whether it was the generous rewards given to Ordinals players from both China and abroad by $PIZZA, or the Bitcoin-native scaling solution Fractal, which has been recognized, focused on, and anticipated by Ordinals players globally, UniSat itself has not actively engaged in much marketing, but their diligent efforts have still been acknowledged and closely watched by the market.

Starting with an open-source wallet and inscription services, UniSat's role has quietly changed over the past year. How do they view the current Ordinals and Bitcoin ecosystem, as well as future developments? What thoughts, persistence, and expectations do they have regarding Fractal and UniSat's own development? With curiosity about these questions, Rhythm BlockBeats reached out to UniSat founder Lorenzo to hear his views.

Views on the Market

BlockBeats: The transaction volume of inscriptions and Runes has been shrinking over the past few months, causing many players in the Bitcoin ecosystem to lose confidence. What do you think has led to the lackluster performance of the Bitcoin ecosystem after the launch of Runes?

Lorenzo: The market has its own rules. Sometimes, when the moon is full, it wanes; when things are strong, they age. It's normal to have ups and downs. The same was true during the middle of last year; just keep a calm mind.

For those doing things, a low point can actually help accumulate strength. We felt the changes in market sentiment during the development of Fractal. When the market is hot, there are all kinds of voices every day, and it seems like everyone is pulling you in different directions; when the market cools down, all those voices disappear, and finally, you can focus on "writing bugs," haha.

BlockBeats: There is an interesting "chicken and egg problem" regarding BRC-20 and Runes. One viewpoint suggests that there needs to be a large-scale breakout of BRC-20 and Runes before the relevant infrastructure can be valued by the market. Another viewpoint argues that the maturity of the relevant infrastructure is necessary for BRC-20 and Runes to usher in a new bull market. What are your thoughts on this?

Lorenzo: Last year, we indeed saw the explosion of inscriptions bringing new vitality to the Bitcoin ecosystem, and we experienced the complete system freeze in April and May because it couldn't handle the heat from BRC-20. We had no choice but to sit and wait. So in the long run, if we only focus on wealth effects without considering infrastructure issues, we may see repeated large-scale breakouts of assets, followed by network congestion and soaring fees, which will quickly bring the heat down. Over time, people will question the practicality of the Bitcoin network and the value brought by inscriptions, Runes, and other protocols.

We are more concerned about whether Bitcoin can operate healthily in the long term. Our thinking is not just about making UniSat's products or Fractal's ecosystem better, but whether we can help Bitcoin grow into a system where all participants have more opportunities. Only with mature infrastructure can we prepare for a match that ignites a bull market.

BlockBeats: When do you think the next explosive growth in the Bitcoin ecosystem will occur, and under what conditions?

Lorenzo: The Bitcoin ecosystem is always on the road, regardless of the storms. UniSat has been continuously running. We are not good at operations, marketing, or promotion, but we have the determination, patience, and calmness to move step by step toward our goals. We have an extraordinary confidence in Bitcoin and hope to expand Bitcoin into a more trustworthy electronic cash system through Fractal. We look forward to a more efficient, elegant, fair, and transparent future. As for whether to stand by or participate in building such a future, that is left for everyone to independently judge and choose.

About Fractal

BlockBeats: Fractal is described as a "Bitcoin-native scaling solution," utilizing Bitcoin core code for infinite levels of expansion. What is the biggest difference compared to other Bitcoin Layer 2 or sidechain projects on the market?

Lorenzo: First of all, Fractal's starting point is to make Bitcoin better. To summarize with a friend's words from the community, "Everyone can see Fractal as Bitcoin's most loyal assistant; all designs are aimed at solving Bitcoin's practical problems."

Fractal is currently the only native Bitcoin scaling solution, using Bitcoin Core's code and maintaining a high degree of consistency with Bitcoin. If other L2s and sidechains are like building a new highway, Fractal can build countless highways running parallel to the Bitcoin mainnet. Each road can either expand the Bitcoin mainnet or extend another road. This way, each has its unique value orientation, and you can solve congestion issues without needing to change transportation methods. Our address format is the same as the mainnet address, and we use existing wallets, tools, miners, etc., which is why the community finds using Fractal very comfortable and convenient.

Unlike some Bitcoin Layer 2 solutions, Fractal does not compete for attention and liquidity with the mainnet but serves as a solution with unique advantages. When certain features cannot be effectively supported on the Bitcoin mainnet, Fractal will be a good choice.

Fractal is also very suitable to be used as a testbed for Bitcoin, as it is highly consistent with the mainnet while being optimized for performance, making it ideal for complex applications to experiment and innovate as much as possible. At the same time, it allows users to participate and provide real feedback in a real interactive environment, which is something that current Signet, Testnet, and other Bitcoin Layer 2 solutions cannot achieve.

In addition to the technical aspect, from a governance perspective, Fractal's governance will adopt a decentralized approach as much as possible, allowing the community to participate in many significant decision-making processes. For example, this time with OPCAT, we decided through community online voting whether to activate OPCAT on the Fractal testnet and mainnet. We are merely information providers and executors, listeners to the community, not decision-makers.

We will increase more effective communication channels with the community, hoping that every opinion has a place to be voiced. In the future, we hope that developers, institutions, and the community can form a tripartite balance in the Fractal ecosystem, avoiding conflicts between the community and institutions or project parties that could affect the ecosystem's development. This truly follows Bitcoin's decentralized and open principles.

BlockBeats: Why did you decide to activate OPCAT on Fractal? If Bitcoin's mainnet completes the OPCAT upgrade under the promotion of Bitcoin Core in the future, it may pose some threats to Fractal. What unique advantages can OP_CAT on Fractal demonstrate at that time? For example, some specific applications?

Lorenzo: The significance of introducing OPCAT lies in balancing security while expanding Bitcoin's programmability. We believe the potential of OPCAT has not been fully understood by everyone. Initially, I also underestimated the possibilities of OPCAT, thanks to our partner team sCrypt for helping us understand it more deeply. OPCAT is indeed very powerful and can enable us to achieve almost all functionalities on the Bitcoin network.

It is worth noting that the Bitcoin network is a system engineering project, and the theoretical advantages of a function may differ significantly from its practical implementation within the system. For example, some have proposed using OPCAT to verify ZKproofs, but running such a large script on the Bitcoin mainnet is not very realistic. Therefore, we cannot just stay at the theoretical research level; practical operation is more important. This is where OP_CAT's advantages on Fractal can be highlighted; Fractal's large capacity allows developers to experiment freely and maintain extremely low costs for a long time, enabling many complex applications that are infeasible on the mainnet to be successfully implemented on Fractal.

I believe we should not say that the upgraded mainnet poses a threat to Fractal, but rather that each has its strengths. Fractal is suitable as a storage place for secondary important assets, while the BTC mainnet is suitable for very high-value assets, as it is the safest network. This encourages asset innovation while avoiding congestion on the mainnet, allowing both to perform their respective roles.

BlockBeats: Fractal promises to provide secure and scalable solutions. Can you explain how Fractal addresses common security issues, such as the risk of a 51% attack? How does its architecture ensure security and scalability while accommodating future growth?

Lorenzo: Common 51% attacks generally fall into two categories:

Hiding blocks + empty blocks/excluding specific transactions. In the Fractal system, every two free blocks, joint mining ensures that a normal transaction has a chance to be included in a block. If the attacker continuously produces empty blocks, and all free blocks are turned into empty blocks, the network will simply degrade to having a normal transaction included every 90 seconds.

Gun pools utilize delayed difficulty adjustments to produce blocks frantically. Fractal has made adjustments and optimizations based on dynamic DAA, allowing difficulty adjustments during strong fluctuations in computing power to better match actual changes.

In terms of consensus mechanism, we adopt an innovative method called "Cadence Mining," where 2/3 of the blocks are produced by free mining, and 1/3 of the blocks are mined through joint mining. Miners can use their existing mining machines to mine both Bitcoin on the mainnet and Fractal. Joint mining requires a high level of computing power, and this computing power is substantial enough that we use additional Fractal Bitcoin rewards to incentivize miners while ensuring network security.

Another security issue that people are concerned about is cross-chain. The MPC solution is our current minimum requirement because we need to ensure that Fractal operates well while innovating and ensuring stability. We are also collaborating with other teams to develop atomic solutions, meaning my assets go directly into the counterparty's wallet, and the counterparty's wallet goes directly into mine, with no third possibility, completely eliminating the need for trust in the platform. In addition, we are promoting several other technological innovations, hoping to provide more options for everyone.

Asset security is a matter we take very seriously. When choosing solutions and partners, we will rigorously weigh the pros and cons to ensure safety and reliability. Therefore, some technical routes may be abandoned after trials, and once we announce mature solutions, we can share our explorations and thoughts with everyone.

BlockBeats: As Fractal is set to launch in September, the community is full of anticipation for potential dApps (like Satspumpfun). Besides Satspumpfun, what other projects or applications should we pay attention to regarding Fractal? What preparations has UniSat made for this?

Lorenzo: From the points of interest, the first category of applications should be bridges, which help assets flow between the Bitcoin mainnet and the Fractal mainnet. This type of application emphasizes security, decentralization, atomicity, and trustless platforms, each with its advantages, but currently, there is no perfect solution. What we can do is provide a relatively reliable range of options, allowing users to choose and balance among different options.

The second category of applications may be trading-related, such as native swaps, DEXs, NFT marketplaces, etc. They can offer lower fees, faster confirmations, smooth experiences, and ample liquidity compared to Layer 1, which is the most intuitive benefit that Fractal can bring. Please note that this low fee is not just a discount; it is a difference of one ten-thousandth or one hundred-thousandth under the same mechanism as Bitcoin. This makes projects based on a large number of on-chain transactions possible, such as cheaper in-game item transactions.

The third category of applications may be those that have been suppressed on the Bitcoin Layer 1 due to limited block sizes, such as DID applications, credential issuance applications, voting governance applications, etc. These applications can maximize the benefits brought by Fractal and the consistency of Bitcoin mainnet addresses and private keys, allowing for frequent participation and interaction by a large number of users.

After passing through the initial phase of establishing Fractal's value, I hope to see more innovative, interesting applications that connect with the real world or other industries. Bitcoin has a very broad user base, and I believe there are teams that can create blockbuster applications targeting a wider audience, enabling Bitcoin to connect with the real world. We are full of expectations and will fully support this.

BlockBeats: Fractal's several rounds of testing have received high attention and enthusiastic participation from both domestic and international communities. Some voices from the English community express concern that UniSat's construction on Fractal may prioritize BRC-20 over Runes. Do you have any response to this viewpoint?

Lorenzo: Many friends in the community entered the Bitcoin ecosystem because of BRC-20 and then got to know us through the UniSat wallet, so it is natural for them to draw a deep connection between BRC-20 and UniSat. It is understandable that everyone has a special affection for BRC-20.

We recognize the value of BRC-20 and actively promote its technical development in collaboration with L1F and other partners. However, at all times, we maintain a neutral and open attitude towards asset issuance protocols. We will support any protocol that meets user needs and is beneficial to the overall Bitcoin ecosystem. The priority to some extent depends on community demand; if there is demand, we will do our best to meet it.

Not only do we not hold a position on protocol selection, but also in terms of products and features, many times, even if we believe a certain technology is excellent and we are fully prepared, we will not hold a particular stance. For example, we believe OP_CAT is an important improvement, and we prepared technically early on, but we still initiated extensive opinion solicitation and voting from the community to understand everyone's true attitude rather than acting rashly. The reason is simple: if the community believes the timing is not yet mature but we insist on pushing it, and it results in a head-on collision, who can we blame?

Changes, Development, and Future of UniSat

BlockBeats: Because UniSat's wallet is excellent, in the past, people would compare UniSat with Xverse. But with the introduction of UniWorlds and Fractal, has UniSat's overall positioning changed?

Lorenzo: UniSat has transitioned from an open-source wallet to inscription services, to protocol contributor, to developer services, to infrastructure provider, and now to implementer of Bitcoin expansion solutions. This phased role change is inseparable from our long-term pursuit. With the solid foundation of Bitcoin construction, we clearly know our direction and steadily move toward our goals step by step without arrogance or impatience.

Currently, we have become an infrastructure provider that the ecosystem relies on. Our API serves hundreds of teams, with monthly usage and request volumes exceeding 1 billion and rapidly increasing. You might not expect that our monthly traffic cost for developer API requests is even greater than the traffic cost provided to hundreds of thousands of users visiting our official website. Despite this high-intensity API access, we maintain free quotas for over 95% of development teams. For us, ensuring that infrastructure supports ecosystem builders is our mission.

At this point, I want to thank these ecosystem partners for their trust. We will carry this encouragement forward. I also want to give a shout-out to our UniSat Infrastructure team; you have worked hard, and you are the best!

BlockBeats: Can you share some projects that UniSat is currently investing in or collaborating with? How will these projects complement UniSat and Fractal to form a more complete business loop?

Lorenzo: We are a team primarily composed of engineers and are not very good at investing. So far, all our investments aim to provide substantial help in exploring directions. From a long-term perspective, we hope to be more open in our investments, supporting teams that are more pioneering and adventurous. Such investments can help us clarify our forward direction; if they fail, although we lose money, it serves as a valuable lesson for all entrepreneurs; if they succeed, it will greatly benefit the community and ecosystem.

BlockBeats: We know that Fractal will also have its own token in the future. Many community friends actually want to know how the functions and positioning of $SATS, $PIZZA, and Fractal's new token will differ.

Lorenzo: Regarding the positioning of different assets, we would like to reserve our views for now. Overall, we are more focused on Bitcoin as a system and its overall success. If Fractal becomes a truly useful expansion of Bitcoin, the corresponding asset value will also rise; otherwise, whether it rises or falls, as a purely speculative zero-sum game, it is difficult to bring continuous growing value to participants.

BlockBeats: Some players have noticed that obtaining UniSat Points has recently become much more difficult. Can you share the reasons behind this adjustment? Additionally, players are very concerned about whether there are ways for ordinary people to participate in the Fractal ecosystem to earn rewards. What advice would you give them?

Lorenzo: In fact, after the inscription fees decreased, contrary to everyone's intuition, the cost of obtaining points has actually lowered rather than increased, because now the cost of inscribing 10 is lower than that of inscribing 1. From a long-term perspective, we hope that UniSat Points can well reflect the correlation between our users and UniSat. After the launch of Fractal's mainnet, we will gradually open more ways to earn points.

After the mainnet launch, we encourage everyone to participate in quality projects they recognize. Fractal operates on a PoW consensus mechanism, and interested and capable friends can join mining pools or mine freely. Currently, in the testnet phase, we encourage everyone to claim test coins and participate in the testnet interactions, helping us with various tests and providing valuable feedback. Users who contribute to the network's growth will receive corresponding rewards.