How to view UTXO Stack's decentralized liquid staking solution?
TechFlow Selected TechFlow Selected
How to view UTXO Stack's decentralized liquid staking solution?
The BTC Layer2 ecosystem has not receded.
Navigating Web3 tides with focused insightsBy Haotian
Many believe the BTC Layer2 ecosystem, which has been booming for over a year, is now fading. But that’s not entirely true. If viewed purely from the asset issuance angle, it may indeed feel like dancing amid a bubble. However, the picture changes dramatically when assessed through the lens of real-world application value. Recently, @utxostack launched a DLSP (Decentralized Liquid Staking Protocol) solution whose features suggest it could accelerate the native Lightning Network's adoption. Here are my observations:
1) UTXO Stack, living up to its "stack" name, has long been @NervosNetwork’s ambitious strategic ace:
On one hand, it aims to elevate CKB’s UTXO framework on BTC Layer2 into a broad ecosystem by offering modular toolkits that allow developers to deploy UTXO-based BTC Layer2s with one click—ultimately competing for influence against EVM-based BTC Layer2s. This goal is widely understood.
On the other hand, a less recognized objective is bringing CKB’s two key innovations—the RGB++ asset issuance protocol and the enhanced Fiber Network version of the Lightning Network—from the backend infrastructure into the frontend spotlight by accelerating real-world Lightning Network applications, helping the market better grasp the technological significance of RGB++ and Fiber.
2) The innovation of RGB++ lies in enabling users to issue various assets on BTC L1, then "Leap" them into programmable Bitcoin smart contract environments built on CKB, where they can find practical utility. At the time, this was nothing short of a "dimensional strike" against the original RGB protocol, which remained rigidly tied to BTC’s native environment.
RGB++ not only validated the feasibility of RGB’s client-validation model but also leveraged CKB’s existing wallets and chain infrastructure to showcase tangible use cases of RGB ahead of schedule. In many ways, RGB++ served as a pragmatic substitute for RGB’s slow progress toward real-world deployment.
Fiber Network, meanwhile, represents CKB’s approach to enhancing the Lightning Network. Using modular scaling techniques, it enables multi-asset transfers (beyond just BTC), cross-domain atomic swaps (interoperable with the original Lightning Network), and accelerates physical node deployment to deliver a faster, lower-cost, multi-asset, high-privacy secure payment network.
Objectively speaking, while the narrative around RGB++ might be dampened by the cooling interest in inscriptions and similar assets, Fiber Network’s vision of accelerating Lightning Network payments remains highly relevant.
3) Against this backdrop, UTXO Stack becomes much clearer: simply put, it builds an enhanced protocol focused on "payments" based on the RGB++ asset issuance standard and Fiber Network. Beyond introducing stablecoin solutions to the Lightning Network, its core functionality centers on DLSP (Decentralized Liquid Staking Protocol):
1. Zero-cost node channels: Nodes can pre-fund user channels via the DLSP liquidity layer, significantly lowering user entry barriers;
2. Automated liquidity management: An AMM-style liquidity model reduces operational overhead for node operators;
3. Liquid staking derivatives: Enables diverse financial utilities such as Staking, Restaking, and the issuance of liquid tokens like LnBTC, LnUSD, and LnCKB—allowing users to earn yield without sacrificing liquidity.
For example, operating a large-scale channel typically requires substantial capital reserves, locking up liquidity and creating significant cost pressure. With the help of the DLSP financial derivatives platform, nodes can borrow directly from DLSP instead of pre-depositing large amounts of BTC, covering loan costs through transaction fees—greatly accelerating the emergence of Lightning Network node operators and addressing the fundamental bottleneck behind the Lightning Network’s slow growth.
Beyond this, it also joins @babylonlabs_io and @GOATRollup as another solution delivering native, non-custodial yield opportunities within the BTCFi landscape.
The construction of this DLSP layer resembles the early emergence of a new “EigenLayer” within the Bitcoin Lightning Network system.
Once the primary goal of accelerating Lightning Network adoption is achieved, the supporting infrastructure—including stablecoin circulation, decentralized exchange nodes, wallets (JoyID), P2P payment SDKs, and hybrid Lightning Network components—will all be integrated into the broader Lightning ecosystem.
In effect, it establishes a native extension layer for the Lightning Network. How far it can push the Lightning application market, and how many complementary innovations will emerge, remains to be seen—though its upcoming large-scale airdrop campaign targeting Lightning Network users is definitely worth watching.
That’s all.
All in all, despite its technically abstract name, UTXO Stack has laid out a clear roadmap—not only building essential infrastructure for the Lightning Network but also charting a concrete path to accelerate its ecosystem deployment.
Naturally, its post-TGE market valuation will likely correlate positively with progress on the Lightning Network front. Whether it can redefine the UTXO-based BTC Layer2 ecosystem remains uncertain—but one thing seems clear: the large-scale ecosystem around the Lightning Network as a payment channel appears poised for a major leap forward?
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
Haotian | CryptoInsight
