ABCDE: Why Are We Investing in UTXO Stack?
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ABCDE: Why Are We Investing in UTXO Stack?
The UTXO Stack is the "OP Stack + EigenLayer" of the Bitcoin ecosystem.
Navigating Web3 tides with focused insights
Led by ABCDE, UTXO Stack is a technical infrastructure that enables project developers to instantly launch BTC Layer2 solutions based on the UTXO architecture, with native integration of the RGB++ protocol. In terms of security, it leverages staked BTC, CKB, and BTC L1 assets to secure the Layer2 network.
Simply put, UTXO Stack is the "OP Stack + EigenLayer" for the Bitcoin ecosystem.
I. The Battle for BTC Layer2 and RGB++
To fully understand UTXO Stack, one cannot avoid discussing RGB++.
Currently, there are over 20 BTC Layer2 solutions in the market, but the vast majority are EVM-based—essentially applying Ethereum’s tech stack plus bridges to solve Bitcoin’s scalability issues. While this approach allows for rapid ecosystem development in the short term, long-term drawbacks exist: first, these solutions lack strong security ties to the BTC mainnet and heavily rely on bridges; second, from an ideological standpoint, using Ethereum's Account model and EVM to scale Bitcoin’s UTXO model feels insufficiently “Bitcoin Native.”
Solutions that are both highly secure and deeply aligned with Bitcoin principles—like the Lightning Network—have failed to deliver ideal results after years of operation, and inherently lack smart contract support. Similarly, client-side validation approaches such as Taproot and RGB face prolonged deployment timelines and slow technical progress. These limitations are precisely why EVM-based scaling solutions have become dominant.
Nervos, with its extensive experience in public blockchain development, has leveraged its structural similarity to Bitcoin—both being PoW+UTXO chains—and introduced an innovative "isomorphic mapping" technology to seamlessly port RGB’s client-side verification model onto CKB, naming it RGB++. This design sacrifices minimal privacy while significantly expanding functionality and flexibility, and crucially, establishes a strong security linkage with BTC L1. Most importantly, RGB++ went live just days ago—marking a shift from conceptual narrative to a tangible product ready for ecosystem building and real-world applications.
If terms like client-side validation and isomorphic binding still feel abstract, consider this simplified analogy: a user initiates a transaction on BTC L1 to trigger an asset transfer of their RGB++ assets on CKB; once the transaction completes on CKB, a commitment is written back to the BTC L1.
You might wonder—doesn’t this still require gas fees? After all, users must initiate transactions on BTC L1 and pay BTC gas, now plus additional fees on CKB. Isn’t this more expensive?
Not quite. There are four key advantages:
- As an asset issuance protocol, RGB++ enables BTC L1 to issue new RGB assets (think Merlin’s BRC420).
- RGB++ asset transactions on CKB are fully Turing-complete and programmable.
- Multiple RGB++ transfers can be batched and summarized into a single commitment posted to Bitcoin L1—a process known as “transaction folding”—which significantly reduces gas costs, much like Rollups.
- Not only RGB++ assets, but also other UTXO-based assets like Atomicals and Runes can be mapped to CKB for Turing-complete transactions.
Since only UTXOs on Bitcoin L1 can operate or update RGB++ UTXOs, within RGB++, CKB functions as BTC’s “execution + DA” layer, while BTC L1 becomes the true “settlement layer”—a distinction no current EVM or non-EVM BTC scaling solution can claim.
If you still find this setup too slow or costly—after all, BTC L1 transactions remain unavoidable, and CKB, as a PoW L1, caps out at only a few hundred TPS—is there a more flexible and faster scaling option? Something akin to appchains in the Ethereum ecosystem?
Enter UTXO Stack—the OP Stack for BTC built on top of RGB++.
II. UTXO Stack—BTC’s OP Stack + EigenLayer
If you're familiar with OP Stack or RAAS (Rollup as a Service) protocol stacks, understanding UTXO Stack will come naturally.
With UTXO Stack, you can instantly deploy BTC-compatible UTXO-based appchains, each featuring the following characteristics:
- UTXO model enabling ultra-high TPS (inherently parallelizable) and ultra-low gas fees
- PoS mechanism secured by staked BTC and CKB on BTC (similar to EigenLayer)
- Asset protocol powered by RGB++; thanks to isomorphic mapping, assets can freely move between appchain, CKB, and BTC without cross-chain bridges
- Reuses CKB’s smart contract stack
- Compatible with existing BTC wallets (users remain unaware of CKB)
Finally, we have a truly Bitcoin-native, UTXO-based one-click chain deployment infrastructure. This foundation integrates EigenLayer’s restaking concept, empowering both BTC and CKB while ensuring secure cold starts for appchains.
Looking ahead, BTC EVM Layer2 and BTC UTXO Layer2 are poised to engage in direct competition across technical, ecological, and ideological dimensions.
From its formal proposal in February to actual deployment in April, RGB++ achieved production readiness in under two months—an impressive feat showcasing the team’s exceptional engineering capabilities. The simultaneous launch of UTXO Stack alongside RGB++ opens up diverse, deeply Bitcoin-native possibilities for asset issuance and application innovation. We believe in and stand with UTXO Stack, working together to push the Bitcoin ecosystem toward a brighter, more prosperous future.
About ABCDE
ABCDE is a venture capital firm focused on leading investments in top-tier crypto builders. Co-founded by Du Jun, co-founder of Huobi, and BMAN, a former internet and crypto entrepreneur, both of whom have over a decade of experience in the crypto industry. The co-founders have built multiple billion-dollar market cap companies from scratch within the crypto space. As founders ourselves, we deeply understand the needs of builders. We’ve already established an end-to-end ecosystem for our portfolio builders—including a publicly listed company (1611.HK), an exchange (Huobi), a SaaS provider (ChainUP), media (CoinTime.com), and a developer platform (BeWater.xyz).
Twitter: https://twitter.com/ABCDELabs
Website: www.ABCDE.com
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