The blockchain industry has a strong dependence on 'narratives'. In recent months, the new concept of PayFi, which integrates payment and finance, has become the new narrative focus within the industry. PayFi stands for Payment Finance, providing financial services for real-world payment scenarios through blockchain technology.

The current mainstream view is that the underlying payment infrastructure of PayFi is high-performance public chains (such as Solana), but we believe that off-chain payment channel technologies represented by the Lightning Network are more suitable as the payment infrastructure for PayFi.

Lightning Network: Global payment infrastructure

The Lightning Network has many key advantages:

1. Instant finality: Payments on the Lightning Network can be settled in seconds, providing users with real-time finality because transactions are conducted in off-chain channels.

2. Unlimited throughput: With the help of payment channels, the Lightning Network can significantly increase transaction throughput. In theory, the number of transactions per second (TPS) in these channels has no upper limit because payments between different channels do not interfere with each other.

3. Privacy protection: Since payments are conducted in off-chain private payment channels, there is no need to broadcast on the mainnet, thereby reducing the exposure of sensitive data and protecting user privacy.

4. Faster and lower fees: Even compared to traditional Web2 payment systems, the Lightning Network has advantages in transaction speed and fees. Those who believe that high-performance public chains can serve as global payment infrastructure overlook an important point: any public chain has a TPS limit. Since any on-chain solution requires synchronization and confirmation of transactions across multiple nodes, it inevitably leads to delays. Therefore, no matter how fast a high-performance public chain is, it cannot surpass a centralized system. The Lightning Network operates off-chain, with channels that do not interfere with each other, and its parallel processing capabilities allow it to achieve or even exceed the transaction throughput of centralized systems. Therefore, from a TPS perspective, the Lightning Network is superior to centralized systems and outperforms high-performance public chains.

In fact, beyond TPS, the Lightning Network excels in other aspects compared to on-chain payments of high-performance public chains: it does not require a separate token to pay gas fees; it is very suitable for small and high-frequency payments; it provides instant transaction finality; it offers better privacy protection when operating off-chain; it complies with regulatory frameworks and can support more user scenario expansions.

However, the Lightning Network currently faces some urgent issues that need to be resolved, such as liquidity shortages and lack of support for stablecoins.

UTXO Stack: The liquidity staking layer of the Lightning Network

UTXO Stack is the liquidity staking layer of the Lightning Network, aimed at enhancing the liquidity of the Lightning Network through a Decentralized Liquidity Staking Pool (DLSP).

Users can act as liquidity providers by staking assets such as cCBTC, stablecoins, and CKB into the DLSP. These liquidity assets will be rented to routing nodes in the Lightning Network. These nodes provide routing services in the Lightning Network and charge a certain percentage of fees, with most of the fee revenue flowing back to the DLSP as dividends for liquidity providers. The assets injected by liquidity providers into the DLSP, including cCBTC, CKB, and USDI, will generate staking certificates or liquidity tokens at a 1:1 ratio, such as InBTC, InCKB, and InUSDI. The minting and burning of liquidity tokens are controlled by smart contracts. By holding these liquidity tokens, users can not only earn passive income automatically but also retain the liquidity of their assets, allowing them to continue participating in DeFi, re-staking, and other economic activities, effectively unlocking the full liquidity potential of their assets.

RGB++: Issuing stablecoins on the Bitcoin chain

RGB++ is a decentralized asset issuance protocol designed for the Bitcoin chain. As an extension protocol based on RGB, it uses a Turing-complete blockchain with the UTXO model (such as Nervos CKB) to manage state changes and transaction validation. The RGB++ protocol supports the issuance of various RGB++ assets (including fungible and non-fungible tokens), including stablecoins. The key technology of RGB++, 'isomorphic binding', maps a dust UTXO (a Bitcoin UTXO) to an RGB++ asset (defined in a CKB Cell), and the unlocking condition of this Cell is to spend this specific dust UTXO (plus a commitment verification). Therefore, once the dust UTXO is spent, the corresponding RGB++ asset will be transferred.

Additionally, utilizing isomorphic binding and the characteristics of the UTXO model, RGB++ assets can seamlessly transition between different UTXO chains without relying on traditional cross-chain bridges, a process referred to as 'Leap'.

Through the RGB++ protocol, stablecoins can be issued on the Bitcoin blockchain and circulated to off-chain payment systems such as Fiber Network and the Lightning Network. Turing-complete smart contracts can also provide advanced features such as payment conditions and time locks for stablecoins.

Fiber Network: Integrating with the Lightning Network

Fiber Network is the Lightning Network implemented on the Nervos CKB chain. It can closely integrate with the Bitcoin Lightning Network to form a larger and more robust hybrid network. The primary function of this hybrid network is to introduce stablecoins into the Lightning Network. Fiber Network leverages the Turing-complete capabilities of the CKB blockchain, natively supporting user-defined assets. For example, stablecoin assets based on the RGB++ protocol can be issued on the Bitcoin chain and then transferred to the CKB chain through a bridge-less cross-chain method, finally entering the Fiber Network and the Lightning Network, as both are seamlessly interoperable.

JoyID: The wallet entry for stablecoin payments

JoyID is the first Bitcoin multi-chain wallet integrated with Passkey technology. In addition to supporting Bitcoin and other public chains, it also supports the Lightning Network and Fiber Network, and will introduce stablecoin payment functionality, aiming to become the wallet entry for stablecoin payments through the Lightning Network and Fiber Network. Meanwhile, JoyID will integrate the staking protocol of UTXO Stack, allowing users to easily stake BTC, CKB, and stablecoins into the DLSP to enhance the liquidity of the Lightning Network. Due to its user-friendly experience, the staking process will become simple. Currently, JoyID has over 800,000 users. With its powerful combination of features, including security, ease of use, and multi-chain support, JoyID will strongly promote stablecoin payments on the Lightning Network as a wallet entry.
$CKB #CKB助力比特币生态 @CKB Eco Fund