June 24, 2024 at 13:32 GMTModified date: June 24, 2024 at 13:32 GMT
June 24, 2024 at 13:32 GMT

New ‘Brollups’ by Bitcoin hacker aims to boost DeFi transactions

Brollups will support over 90% of DeFi use cases upon launch without needing a hard fork or issuing a non-Bitcoin token.

New ‘Brollups’ by Bitcoin hacker aims to boost DeFi transactions

Burak, the infamous Bitcoin developer known for exploiting a bug in the Lightning Network in 2022, is currently working on a new Bitcoin layer-2 solution called ‘Brollups’.

This was revealed in his 21 June post on Medium. The Brollups are still in the design phase and testnet rollout for the same could reportedly happen later this year.

Burak’s efforts are aimed at bringing more decentralised finance (DeFi) use cases to Bitcoin ($BTC). He explained that Brollups aim to support over 90% of DeFi use cases upon launch.

It would offer a Bitcoin-native rollup design which bundles transactions without needing a Bitcoin hard fork or issuing a non-Bitcoin token.

The dev highlighted various applications for the same, such as listing non-fungible tokens (NFTs) for sale in exchange for Bitcoin or placing token sell orders on decentralised exchanges.

These transactions will be executed atomically, verifiably, and scalably on Bitcoin.

How Brollups operate

Brollups will be managed by operators who provide liquidity to the protocol and advance the rollup state by chaining Bitcoin transactions at regular intervals. 

Transactions will be executed on the Bitcoin Virtual Machine. Burak described Brollups as being “deeply baked into Bitcoin” and working natively with Bitcoin as a payable construct. 

This development allows for scalable and enforceable DeFi transactions on Bitcoin, expanding its use cases significantly.

Brollups would join other Bitcoin scaling projects like Drivechain and Spiderchain, which also aim to bring DeFi functionality to Bitcoin. 

Unlike Ethereum‘s layer 2 solutions, which often rely on separate tokens, Burak’s Brollups would introduce trust in a small group of operators without additional tokens. 

This approach is similar to Coinbase’s layer 2 solution, Base, which operates without a proprietary token and relies on Coinbase as a trusted party.

Burak’s efforts in developing Brollups reflect his ongoing commitment to enhancing Bitcoin’s scalability and functionality. 

By addressing DeFi needs without compromising Bitcoin’s integrity or requiring new tokens, Brollups could represent a significant step forward in Bitcoin’s evolution.

From hacker to scaling competitor

Burak became well-known in the Bitcoin community on 9 October, 2022, when he exposed a bug in LND, the most popular implementation of Bitcoin’s Lightning Network. 

His actions, though not malicious, revealed unintended consequences of the Taproot upgrade, one of Bitcoin’s most complex software updates. 

While initially marketed for enabling smart contracts on Bitcoin, Taproot saw limited use until the launch of Ordinals, an NFT and token platform by Casey Rodarmor.

Burak’s hack involved a 998-of-999 multisignature Taproot transaction, triggering an emergency update to Lightning Network node operators. 

Although no funds were stolen, this incident highlighted potential vulnerabilities in the Taproot upgrade. 

Following the launch of Ordinals, Taproot transactions surged to over three-quarters of all Bitcoin transactions by May 2023, but this has since decreased.

In May 2022, Burak launched Ark, another Bitcoin layer 2 solution focused on payments, which negates the need for payment channels. 

With Brollups, Burak continues to explore how Bitcoin can emulate covenants without a hard fork or covenant OpCodes, challenging the need for separate tokens in layer 2 solutions.

Bitcoin plunges below $63K

The cryptocurrency market, on the other hand, is currently experiencing a significant correction, with $BTC dropping below the $63,000 mark.

The global crypto market capitalisation has decreased by 3.4% in the past 24 hours, currently standing at $2.29 trillion.

At the time of press, $BTC traded at around $62,636, down 3% daily and 5.6% over the past week. This marked a notable pullback from the leading cryptocurrency’s recent highs above $65,000. 

The broader altcoin market is also seeing red, with major cryptocurrencies like Polkadot ($DOT), Solana ($SOL), and Ripple ($XRP) experiencing declines ranging from 2.86% to 7.17% on the day. 

Meme coins like Shiba Inu ($SHIB) have been particularly volatile, with $SHIB dropping nearly 6% in the past 24 hours and almost 17% over the week.