The financial renaissance of BTC has begun. L2 Network Mirror Staking Protocol aims to solve the pain points of the BTC Restaking track.

For a long time, Bitcoin has been used as an innovative payment method and value storage method. Its ecosystem cannot reproduce the diverse applications and gameplay like Ethereum due to reasons such as not supporting smart contract functions and high handling fees. It was not until the explosion of protocols such as Ordinals and the opening of the mainstream funding floodgates by Bitcoin spot ETFs that the gears of fate of the Bitcoin ecosystem were turned, and it became a key narrative in today's encryption market.

However, as problems such as large-scale network congestion, low transaction speed, and insufficient application expansion have become increasingly prominent, the Bitcoin L2 expansion plan came into being. In this hundred-team battle of Bitcoin L2, Mirror Staking Protocol has taken a different approach and positioned itself as Bitcoin L2 staking infrastructure. In this article, PANews will explain the operating mechanism and differentiated advantages behind the Mirror Staking Protocol.

L2 revitalizes the Bitcoin economy, Mirror uses multi-signature grouping algorithm to break the staking dilemma

The important driving force of the Bitcoin ecosystem including the Layer2 expansion plan has become a track for key funds to ambush, and is presented A blowout burst of kinetic energy. For Bitcoin, the introduction of Layer 2 can not only improve scalability and efficiency, but the programmability of its smart contracts also provides greater possibilities for ecological explosion.

The low staking efficiency and asset security risks faced by the pledge track are restricting the development of the Bitcoin L2 track. In response to such market pain points, Mirror Staking Protocol can provide Bitcoin L2 with a completely decentralized and trustless Bitcoin staking solution to ensure that Bitcoin is 100% securely transferred to L2 and shared with Bitcoin L2.

In reality, since various Bitcoin L2 projects have different asset pledge implementation routes, they also have different differences in pledge efficiency and security. For example, there is an inevitable triangulation problem when bridging Bitcoin L1 to L2 native assets through a multi-signature mechanism. If the number of multi-signature nodes is reduced to improve efficiency, it will be difficult to ensure the risk of evil caused by centralization. For example, Merlin Chain uses Cobo's MPC wallet solution to bridge multiple native assets from Bitcoin L1 to L2. Although the MPC wallet is more secure than ordinary wallets, the smaller number of signers and the lack of a penalty mechanism also make it ineffective. There is a certain gap in security; if you want to maximize the decentralization of asset custody, having enough nodes will bring inefficiency. For example, Stacks requires at least 70% of the node signature power to obtain a valid signature. .

Use remote staking solutions such as Babylon’s Bitcoin staking protocol that allows Bitcoin holders to stake without bridging Bitcoin to a PoS chain, through cryptography, consensus protocol innovation and optimization using Bitcoin scripts Language is used to create a remote staking environment. Although it is more secure and reliable than bridging, it has the risk of Bitcoin asset lock-in and cannot directly access the DApps of the EVM ecosystem. In addition, projects like BounceBit directly host assets to centralized custody service platforms with compliance qualifications such as Mainnet Digital and Ceffu, which builds user trust in the asset transparency and financial audit of these institutions.

Mirror Staking Protocol is a protocol based on the multi-signature node mechanism. It effectively balances Bitcoin staking efficiency, security and decentralization issues by creating a multi-signature group (MSG) algorithm. To make a symbolic metaphor, "If the Bitcoin L2 project is compared to an electric car manufacturer, Mirror provides battery packs; and if the BTC L2 project is a large-scale language model (LLMs), the Mirror protocol is a GPU cloud computing center."

Mirror divides nodes from hundreds to thousands into groups. Each node can form a group with any other 4 nodes, and each group consists of any 5 nodes. , any 3 nodes among the 5 nodes in the group can multi-sign the assets in the group. Each node is also required to stake 1 mBTC in the designated smart contract. Once the node does evil, the money will be confiscated. For example, if there are 1000 nodes, then 3000 record groups are generated. If the number of nodes reaches 1,000 Bitcoins, then each group can host 1 Bitcoin. If a node wants to do evil, then 3 nodes in any group must collectively act maliciously to achieve this, and 3 mBTC must be paid.

At present, the node election has been officially launched. Any user who has made active contributions to the protocol can participate. The node will be selected in four rounds of voting by the community. To ensure security, the protocol requires nodes to stake at least 1 BTC into the Mirror contract and act as decentralized network custodians for 12 months. Once successfully selected for the stage, users will receive MIRR token subscription rights worth up to $120,000, and the winner of the node election will also receive a call option of 1 million $MIRR with an execution price of $0.12. According to the latest official disclosure, since the node election was launched on March 5, 2024, the Mirror Staking Protocol has attracted more than 200 KOLs and more than 50 project institutions to participate in the election on social media such as X in less than 3 weeks. At the same time, more than 50,000 users have participated in voting in this election, with the total number of votes exceeding 3 million.

In addition, in addition to improving asset security through technical solutions, Mirror Staking Protocol has also passed the security audit of the well-known security company SlowMist.

It is worth mentioning that the mBTC generated by the Mirror Staking Protocol and anchored 1:1 with Bitcoin is compatible with EVM and can increase the income potential of pledged assets through the ReStaking mechanism.

Has completed seed round financing and plans to launch the mainnet in May this year

Although the market competition among L2 heroes has entered a fierce stage, Bitcoin L2, which has just gained momentum, has still become the most active capital Higher popular sections. Many popular Bitcoin L2s have not only achieved high financing amounts at high valuations, but also have TVLs of hundreds of millions or billions, which directly reflects the strong market demand. The market's expectations for the ecological development of Bitcoin are high because its huge amount of precipitated assets are in urgent need of being mined. In particular, spot ETFs are driving strong demand for Bitcoin. Judging from the market size of Ethereum, Bitcoin L2 also has great potential for development. Whether Bitcoin’s market value is three times that of Ethereum, or the former’s 296 million global users far exceed the latter’s 124 million. All can give a glimpse of the growth space of this track.

As a builder of the Bitcoin ecosystem, Mirror Staking Protocol has also been recognized by capital. In March this year, Mirror Staking Protocol announced the completion of its first round of financing from UTXO (Bitcoin Magazine’s investment arm), Conflux and IMO Ventures. Among them, Bitcoin Magazine once published that the Bitcoin L2 standard must meet three conditions, including using Bitcoin as a native asset; using Bitcoin as a settlement mechanism to enforce transactions; and demonstrating functional dependence on Bitcoin. Judging from these standards, Mirror Staking Protocol fully meets them.

Its innovative technical solutions are a demonstration of the strength of the team. In addition to coming from the Web3 Native project, the team members of Mirror Staking Protocol also have rich experience in well-known Web2 companies, including Microsoft, Google, MIT, Yao Ban of Tsinghua University, Samsung, Hyundai, Conflux and Decus, etc.

In addition, sustainable token economics is also an important indicator for measuring projects. MIRR is the governance token of Mirror Staking Protocol, with a total supply of 1 billion, of which 24% is used for node election and tokens will be issued within 12 months; 26% is used for user airdrops, which can be determined based on the amount of Bitcoin pledged and invitations The points earned by friends will be rewarded and will be divided into 10 quarters; 14% will be allocated to investors. The seed round investor quota will be unlocked within 12 months, and the institutional round investor quota will be unlocked within 24 months; 18% will be allocated to the project For the team and consultants, 6% will be allocated to the foundation, and the remaining 12% will be used for L2 ecological development.

Currently, Mirror Staking Protocol has completed the test network deployment and will soon open the public beta phase to all network users. According to the roadmap, Mirror Staking Protocol is expected to be launched on the mainnet in May this year, which will allow users to pledge and bridge Bitcoin L1 assets to the L2 network; at the same time, the protocol also plans to cooperate with other Bitcoin L2s and launch "once "Pledge Double Token Revenue" activities, expand ecological applications and launch ecosystem funds to support builders and developers, etc.

The Bitcoin ecosystem is booming. As L2s with technology iterations and upgrades continue to conquer the city, low operating efficiency and lack of application scenarios will gradually become a thing of the past, and they will be activated with the leverage effect of LSD/Restaking. The high liquidity and composability of assets will further unlock more potential of the Bitcoin economy. From the perspective of L2 builders such as Mirror Staking Protocol, compared to "showing off skills", providing a more friendly and secure asset environment and shouldering the heavy responsibility of ecological construction are becoming the key to gaining strong consensus and support from users.

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