Interoperability protocol ZKM has announced its launch plans. Bitcoin Bitcoin
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A second layer solution called GOAT Network is expected to be launched in late Q3.
According to a statement shared by The Block, the project claims its solution will be the first decentralized Bitcoin layer 2 with shared ownership of the network.
“GOAT Network’s Bitcoin L2 launch is a powerful first step in ZKM’s efforts to unite the fragmented Web3 world,” said Kevin Liu, GOAT Network Core Contributor, ZKM Co-Founder, and Metis Co-Founder. “We strongly believe in decentralization and are excited to enable a shared ownership model from day one.”
Decentralized Sequencer Model of the GOAT Network
Unlike some so-called Bitcoin Layer 2s where the network and revenue are controlled by a project team or foundation, the GOAT Network says it will launch with a decentralized sequencer model, where sequencer node operators secure the network while earning Bitcoin revenue and fees for activities such as block creation, transaction ordering, and maximum extracted value (MEV) opportunities.
“GOAT Network is the first Bitcoin L2 to decentralize the sequencer, sharing network ownership and fees,” the GOAT Network team told The Block. “GOAT is also unique in allowing the entire community (including small holders) to stake their BTC to the sequencer node and earn sustainable returns.”
On the ZK Prober side, GOAT Network is using ZKM’s probing service. “The decentralization of the Proof Network will depend on the progress of ZKM’s probing service,” the team said.
In a Layer 2 Rollup Network, a sequencer is a component that orders and batches multiple off-chain transactions and then submits them to the main blockchain. A prober is a mechanism that generates cryptographic proofs to verify transactions without having to process them on the main chain. This currently creates a single point of failure and potential censorship risk, which can have significant impacts on users.
Additionally, in contrast to Bitcoin’s existing state channel, the decentralized layer 2 Lightning Network, the GOAT Network is also compatible with the Ethereum Virtual Machine and supports smart contract functionality.
Where does the harvest come from?
GOAT Network claims to have secured 5,000 BTC ($287.5 million) in commitments from five institutional node operators so far. According to the team, the network will start with seven node operators and expand to dozens over time, targeting more commitments to ensure Bitcoin yields and sufficient liquidity for the DeFi ecosystem.
“The yield will come from a number of approaches, such as gas fees in BTC, mining rewards in GOAT tokens, and yield from stBTC (staked BTC),” the team told The Block. “stBTC is a receipt token that users receive after staking BTC on the GOAT Network. Those stBTC receipt tokens can be used to unlock more yield opportunities within the GOAT Network ecosystem.”
The development team said on launch day that the dapp will include a major DEX, borrowing and lending, and a perpetual swap platform that will allow trading of BRC-20 and other Bitcoin-based assets, but did not provide any further details.
‘Universal Layer 2’
The GOAT Network is powered by ZKM’s Entangled Rollup technology, enabling native security on Bitcoin’s Layer 1, the project said. ZKM is a zero-knowledge proof system designed to enable seamless interoperability across multiple blockchains via a global payment network.
GOAT Network also plans to be a “Universal Layer 2,” the first ecosystem to integrate Bitcoin, followed by Ethereum, TON, Cosmos, and more. “The goal is to solve the fragmented liquidity problem of the blockchain world by allowing every L1 to seamlessly connect to every L2 without the vulnerabilities of existing third-party bridges. No other L2 can say that,” the team said.
“Tangled Rollups are deployed across all blockchain infrastructures (layer 1 and layer 2 networks) and the state is synchronized via recursive zero-knowledge (ZK) proofs,” the team explained. “This allows for messaging and asset transfers across different networks without the need for third-party bridges or other cross-chain mechanisms that are prone to the types of vulnerabilities commonly found in bridges.”
“Bridges are the weakest layer of blockchain interoperability,” the team added. “Entangled Rollups are designed to roll up the transaction state, messaging, and ZKP of a transaction from one source chain and validate it on another. In this way, liquidity from multiple chains can be integrated and leveraged in cross-chain applications. Since the rollup smart contract is what triggers the cross-chain transaction, there is no need for a bridge MPC (the weakest part of the bridge).”
GOAT Token Economics and $5 Million Series A Fund Raising Plans
The GOAT Network revealed its token economics on Monday, reserving 42% of the GOAT token supply for sequencer mining and community mining, providing returns to node operators and stakers who lock their Bitcoin on the network.
An additional 6% will be allocated to airdrop activities, 1% will be allocated to KOLs (Key Opinion Leaders/Influencers), and the remaining 49% will be allocated to community contributors.
The team told The Block that GOAT’s total supply will be 1 billion tokens, but said they could not disclose further details at this stage.
The GOAT Network launched its “GOAT Club” rewards program on Monday ahead of its mainnet launch, allowing future rewards to be awarded to Bitcoin holders who “whitelist” 0.001 BTC or more, Day 1 dapp launch partners who lock their Bitcoin to secure the network, and sequencer node operators.
GOAT Network also announced that it will soon be launching a Series A round, seeking to raise $5 million at a $100 million valuation. In May, ZKM announced that it had raised $5 million prior to its Series A round, which closed in November 2023 at a $50 million valuation. OKX Ventures led the round, with participation from Amber, Crypto.com, Metis Foundation, and Polygon Ventures.
ZKM was incubated by Metis DAO, which supports Ethereum scaling solution Metis. In March, Metis released an alpha version of a decentralized sequencer as part of its plan to fully decentralize the infrastructure of its Layer 2 network.
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