A few days ago, I noticed a lot of discussion about this project, and I just wanted to brush up on my knowledge of the BTC ecosystem, so I will analyze this project first.
Related tweet: https://x.com/SideProtocol/status/1857385820451168639
Statement: There is no conflict of interest, which is why it took me several days to write this.
This post mainly discusses what I believe are the unique and controversial points of this project, a purely rational discussion. I won’t elaborate on the project's specific introduction; those interested can visit the official website for more information.
Unique Points
Bitcoin Native: Unlike the previous EVM-compatible BTC chain, Side Protocol maintains sufficient Bitcoin nativity by using various BTC technologies such as Schnorr, HTLC, DLC, etc.; its address format only includes Bitcoin format addresses, with no EVM-compatible addresses; it also claims to be able to directly use native BTC as network gas consumption, but this point has not been detailed, so I am somewhat skeptical.
Combines multiple market-validated technical agreements: In the cross-chain interaction experience, it chose IBC @IBCProtocol, and also integrated the Bitcoin timestamp mechanism from Babylon @babylonlabs_io to enhance network security.
Interesting token issuance mechanism: Unlike the token issuance designs of previous projects, Side Protocol chooses to issue tokens on Solana first, and then migrate to the Side Chain after the mainnet launch. I personally believe this design allows retail investors to quickly exchange tokens early on, avoiding significant selling pressure when the mainnet goes live.
Controversial Points
Scriptless Scripts: During my research, I came across this term, which translates to 'script without scripts'. The first analogy that popped into my mind was 'egg without eggs', which seemed absurd. However, after reading the documentation, I understood that it implies that script writing on Side is no longer like the programming scripts on the BTC mainnet, but can achieve certain smart contract functionalities. Still, I recommend using a more easily understandable expression.
The narrative of 'On-chain Banking': I personally believe this narrative will not resonate well with market users. This is mainly because the target market of the protocol is the BTC ecosystem, where the largest capital volume is held by long-term Bitcoin Maxis. They initially chose BTC precisely because of its philosophy of resisting current centralized financial facilities, of which banks are a part.
Tokenomics may face massive selling pressure: According to the data provided in the documentation, at the beginning of the token launch, there will be 15% from IDO, about 4% from private sale, totaling 19% of tokens directly unlocked. These two roles are counterparties to the project party, so there will inevitably be a significant token exchange at the initial launch. Interestingly, the genesis airdrop can only be claimed after the mainnet goes live, and the TGE timing is staggered with the mainnet launch, which reduces the selling pressure of the airdrop portion. However, I must say, this is the first time I've seen an airdrop designed not to be released all at once.
