A new Bitcoin nonfungible token (NFT) marketplace aims to reduce network costs associated with the arrival of Bitcoin Ordinals inscriptions by leveraging the Internet Computer Protocol (ICP).
Developed after the creation of Bitcoin Ordinals in early 2023, Bioniq operates on the ICP and leverages its native Bitcoin integration to enable trading of Bitcoin-based Ordinals inscriptions.
Speaking to Cointelegraph on the eve of the platform’s launch, Bob Bodily, CEO and co-founder of Bioniq, said the project has been in development since February 2023. The team has built a marketplace with Ordinal’s smart contracts auctions on the ICP, a complete cross-chain wallet between Bitcoin and the ICP, as well as an inscription tool.
“It was only two weeks after Casey Rodarmor released Ord 0.4.0, and I knew Ordinals was going to be absolutely huge.”
The Bioniq team highlighted the growth in the market capitalization of BRC-20 tokens since their introduction in January 2023. The market capitalization now exceeds $3 billion, with more than 42.6 million Ordinals minted to date. This has directly impacted Bitcoin network congestion, leading to a spike in Bitcoin (BTC) transaction fees last seen since 2021.
Bitcoin transaction fees showed significant spikes in 2023 following the arrival of Bitcoin Ordinals and BRC-20 tokens. Source: Blockchain.com
Bioniq’s platform features a smart wallet that allows users to manage private keys using Web3Auth. This allows users to log into the platform using conventional Web2 Google accounts, while retaining non-custodial control over their wallets and assets.
The platform also uses partially signed Bitcoin transactions (PSBTs) through the ICP’s Bitcoin network integration. This unlocks smart contract capabilities for Bitcoin, eliminating the need for users to use centralized cross-chain bridges.
ICP is a “fantastic Bitcoin sidechain”
Building on ICP also enables Bioniq to claim transaction finality times of less than two seconds, as well as zero gas or network fees. The architecture provides optimized storage costs, averaging about $5 per gigabyte of data stored annually.
Bodily added that Toniq, the studio behind Bioniq, has been developing on the ICP since May 2021 and has extensive experience in building smart contract wallets, marketplaces, NFT launchpads and collateralized NFT lending protocols:
“ICP is a fantastic Bitcoin sidechain right now because it has beautiful Bitcoin primitives at the protocol layer.”
Bodily explains that ICP operates a Bitcoin light node that runs completely on-chain, which facilitates reading the Bitcoin blockchain via native smart contract calls. The ICP also has a threshold algorithm for digital signatures known as an Elliptic Curve Digital Signature Algorithm. The implementation allows ICP smart contracts to sign layer-1 Bitcoin transactions and broadcast them to the mempool.
“These protocol primitives also allowed us to build an Ordinals wrapper entirely at the application layer; we didn’t have to touch the consensus layer of the protocol at all. So it is very fast to build Bitcoin technology on ICP right now,” Bodily added.
Bitcoin users and trust assumptions
Cointelegraph also asked whether Bioniq’s packaging process could pose a potential barrier to entry for users. Bodily admits that while the process is largely automated by the Bioniq wallet and only requires BTC, there are two considerations that are relevant for more demanding users.
“Wrapping requires a Bitcoin transaction. This means that you have to pay for packing. This is a significant barrier. One way we are addressing this issue is by integrating open Nostr PSBT lists into Bioniq,” Bodily explains.
This integration means that PSBT lists stored on Nostr through Ordinals decentralized marketplaces OpenOrdex or Deezy Place will be accessible on Bioniq. He added that it removes the need to complete Bitcoin transactions as users can list directly on Bioniq using open PSBTs.
Perhaps more importantly, Bodily explained that the packing process requires “trust assumptions” for both protocols:
“Switching to ICP means that you are not only relying on Bitcoin, but also on the Internet Computer Protocol. Some Bitcoin users do not want the counterparty risk of bridging assets to another chain.”
Bodily adds that Bioniq focuses on developing a user experience before adopting Bitcoin’s security, which is ensured by the finality of layer 1 transactions. However, he foresees a “nice decentralization path” for applications such as Bioniq.
This would entail the evolution from building on a sidechain with additional trust assumptions to “becoming a Bitcoin sovereign rollup on ICP where trust is kept to a minimum.” The final step would allow Bioniq to become a Bitcoin zero-knowledge rollup (ZK rollup) on the ICP, without additional trust assumptions, and adopt the full security and decentralization of Bitcoin.
“ICP also fits perfectly into this plan because ICP can provide a replicated execution environment (decentralized sequencer) or validium (additional off-Bitcoin storage for rollups).”
Banking on Bitcoin’s value proposition
A number of NFT marketplaces already offer Bitcoin Ordinals auctions and trading, which begs the question of what an exclusive Ordinals platform will mean for the ecosystem.
Bodily believes that existing offerings with ‘softer pivots’ to Ordinals on their platforms were hamstrung by confusing user experiences. Developing a “dedicated Bitcoin Ordinals marketplace, built for Bitcoin users” hinges on developing a native cross-chain, BTC-ICP wallet.
Furthermore, Bitcoin’s undisputed position as the preeminent and largest cryptocurrency by market capitalization remains another draw for continued interest in Bitcoin NFTs going forward.
“If you look at the numbers, 89% of people in the world have heard about Bitcoin, Bitcoin accounts for about 50% of the total crypto market cap and Ordinals have done over $500 million in volume this year – so there is a huge question. .”
Bioniq joins Ordinals Market as a Bitcoin-only Ordinals marketplace. Gamma is another Ordinals marketplace that ties directly into Bitcoin’s layer 1 chain. Ordswap was an early Ordinals marketplace that has since closed after losing control of its website to hackers. Meanwhile, multichain platforms like Magic Eden Bitcoin Ordinals prominently list NFTs.
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