Author: NingNing

The industry cycle resonates with the macro financial cycle, and the encryption industry is currently in a similar overall confusion as in 2019. At this stage, not only is liquidity depleted, but the narrative also seems to be drying up. The market is not only lacking interest in the VC narrative, but also tired of the anti-VC MEME narrative.

Just as in every philosophical crisis, people will return to Plato to find a way out, when the encryption industry is in crisis, we also need to return to Bitcoin, return to Satoshi Nakamoto.

As Cipher, the founder of the RGB++ protocol in the CKB ecosystem, expounded in the latest blog, the encryption industry needs to rethink the path dependence of "on-chain computation" in Ethereum, return to P2P economics, shift computation off-chain, and validation on-chain.

Therefore, in the selection of BTC programmability expansion solutions, CKB respects the 'Consensus' of the BTC community that 'validation is greater than computation', and does not replicate the Rollup solution and the Restaking+AVS solution of Ethereum, but pays tribute to the BTCLighting Network and launches the CKB version of Lighting Network Fiber Network (referred to as CFN).

CFN's official description is based on the next-generation public Lighting Network composed of CKB and off-chain channels. The technical stack it actually uses mainly includes: CKB's Cell (a UTXO that supports Turing Complete), RGB++'s isomorphic bindings and Leap's bridgeless Cross-Chain Interaction, BTC scripts' HTLC (Hash Time Lock) and Lighting Network's State Channels, etc.

A standard CFN payment channel lifecycle is as follows:

Open Channel - Lock Assets - Create HTLC - Update Status - Verify Transaction - Transaction Completed - Close Channel - Submit Final Status

Same as BTCLighting Network, CFN's channels can remain active all the time, and N channels that remain active all the time use the "multi-hop" mechanism to form an off-chain asset payment/clearing network.

However, CFN is not a 100% replica of the Lighting Network. Compared to the Lighting Network, CFN has several key new features:

• Multi-asset support: no longer limited to a single currency, paving the way for complex Cross-Chain Interaction financial applications.
• Programmability: Turing Complete Smart Contracts based on CKB support more complex conditional execution and business logic.
• Cross-Chain Interaction: Native design supports interaction with other UTXO chains (such as BTC)'s Lighting Network.

It is worth mentioning that CFN has reserved space for future upgrades to more advanced payment channel technologies (such as PTLC). This forward-looking design makes CFN more advantageous in technological evolution.

Due to the technical homogeneity between CFN and BTCLighting Network (such as the same Hash Algorithm and time lock script), they naturally have the foundation to achieve Cross-Chain Interaction atomic swaps.

Let's understand this process through a specific example:

• Alice (CKB side) wants to send 100 CKB equivalent of BTC to Bob (BTC side)
• Bob generates a secret S and hashes it H(S) to Alice
• Alice creates HTLC on CFN, locks 100 CKB, with the condition of providing the correct S
• At the same time, corresponding HTLCs are also created on the BTC Lighting Network, locking an equivalent amount of BTC.
• Bob reveals S to claim BTC, and S is also obtained by the intermediate Node
• The Node in the middle link unlocked Alice's 100 CKB on CFN

The atomic Cross-Chain Interaction exchange between CFN and Lighting Network is not limited to the native assets of BTC and CKB, but also supports RGB++ assets, Taproot assets, such as the first meme coin Seal in the ecosystem, Stable Coin RUSD of protocol Stable++ in the BTC ecosystem, etc.

CFN provides a fast and cost-effective transfer channel for RGB++ assets. Users can quickly trade various RGB++ assets on CFN without the need for Settlement on the CKB mainchain every time.

At the same time, RGB++ provides CFN with a rich variety of asset types. This greatly expands the application scenarios of CFN, no longer limited to simple value transfer.

The combination of the two can achieve “BTC-level security + ETH-level functionality + Lighting Network-level speed”. This is a highly competitive combination.

• Cross-Chain Interaction Liquidity Mining: Users who provide Cross-Chain Interaction Liquidity for CFN-supported assets can receive rewards, stimulating the issuance and trading of new assets, such as a meme coin launch platform built on CFN for the BTC ecosystem.
• Atomic Cross-Chain Interaction Lending: Users can lock assets on the BTC network and borrow stablecoins of corresponding value on the CKB network, all without the need to trust a third party.
• Cross-Chain Interaction DEX: Using CFN, you can build a Decentralization exchange that supports fast and low-cost transactions of BTC, CKB, and various RGB++ assets.

If the above potential scenarios can eventually be implemented, the BTC ecosystem can leverage CFN's Cross-Chain Interaction atomic swap capability to achieve native stablecoins, native lending, native DEX, and other Decentralized Finance applications. So, CFN is not just the Lighting Network for the CKB version, but a programmable scalability solution with global significance in the BTC ecosystem.

CFN is about to release the testnet. We can observe the following indicators for its future development:

• The timing of successful interoperability with BTC Lighting Network;
• Cross-Chain Interactionvolume rise curve after Mainnet goes live;
• Quantity and quality of Cross-Chain Interaction DApps developed based on CFN;
• The adoption of RGB++ assets on CFN.

In conclusion, among many BTC programmability extension solutions including Babylon, Merlin, BoB, and Mezo, CFN stands out as a unique presence. It chooses to return to the classic paradigm of BTCLighting Network and innovate from there, thus possessing strong Consensus and high scalability of BTC's native nature. It has the potential to surpass friendly competitors and ultimately win in the future competition of BTCFi infrastructure.

Above.