Fiber Network: The third path of BTC programmability extension

The industry cycle resonates with the macro financial cycle, and the encryption industry is currently in a similar overall confusion as 2019. At this stage, not only is the Liquidity depleted, but the narrative seems to be depleted as well. The market is not only lacking interest in VC narratives, but also tired of the anti-VC Meme narratives.

Just like every philosophical crisis, people will return to Plato to find a way out, and when the encryption industry is in crisis, we also need to return to Bitcoin, return to Satoshi Nakamoto.

As Cipher, the founder of the RGB++ protocol in the CKB ecosystem, elaborated in the latest Blog, the **encryption industry needs to rethink the path dependence of “on-chain computation” for Ethereum, return to P2P economics, move computation off-chain, and validation on-chain.

Therefore, in the choice of BTC programmability expansion solution, CKB respects the ‘Consensus’ of the BTC community that ‘verification is greater than computation’, and does not replicate the Rollup solution of Ethereum and the Restaking+AVS solution, but salutes the BTC Lighting Network, and has launched the CKB version of Lighting Network ‘Fiber Network’ (referred to as CFN).

CFN’s official description is based on the next-generation public Lighting Network composed of CKB and off-chain channels. The technology stack that it actually uses mainly includes CKB’s Cell (a UTXO that supports Turing Complete), RGB++'s homomorphic binding and Leap’s bridgeless cross-chain interaction, BTC script’s HTLC (Hash Time Lock Contract) and Lighting Network’s state channels.

A standard CFN payment channel lifecycle is as follows:

Open Channel - Lock Assets - Create HTLC - Update Status - Verify Transaction - Transaction Completed - Close Channel - Submit Final Status

(CFN Payment Channel Lifecycle)

Same as BTCLighting Network, CFN’s channels can remain active all the time, and N channels that remain active all the time use the “multi-hop” mechanism to form an off-chain asset payment/clearing network.

But CFN is not a 100% replica of Lighting Network. Compared to Lighting Network, CFN has the following key new features:

• Multi-asset support：No longer limited to a single currency, paving the way for complex Cross-Chain Interaction financial applications.
• Programmability: Based on CKB’s Turing Complete Smart Contracts, it supports more complex conditional execution and business logic.
• Cross-Chain Interaction：Natively designed to support interaction with other UTXO chains such as BTC’s Lighting Network.
• More flexible state management: Thanks to the Cell model of CKB, CFN can manage channel states more efficiently.

It is worth mentioning that CFN reserves space for future upgrades to more advanced payment channel technologies such as PTLC. This forward-looking design gives CFN an advantage in technological evolution.

Due to the technical homogeneity of CFN and BTCLighting Network (such as the same Hash Algorithm and time-lock script), they naturally have the foundation to achieve Cross-Chain Interaction atomic swaps between them.

(Atomic Cross-Chain Interaction Exchange Process between CFN and Lighting Network)

Let’s understand this process through a concrete example:

• Alice (CKB side) wants to send Bob (BTC side) 100 BTC equivalent of CKB
• Bob generates a secret S and gives its hash H(S) to Alice
• Alice creates HTLC on CFN, locks 100 CKB, with the condition of providing the correct S
• At the same time, corresponding HTLCs are also created on the BTC Lighting Network, locking up an equivalent amount of BTC
• Bob reveals S to claim BTC, while S is also obtained by the Node in the middle link
• The Node in the middle unlocked Alice’s 100 CKB on CFN using S.

The atomic Cross-Chain Interaction swap between **CFN and the Lighting Network is not limited to the native assets of BTC and CKB, but also supports RGB++ assets, Taproot assets, **such as the first Meme coin Seal in the ecosystem, and the BTC ecosystem Stable Coinprotocol Stable++'s Stable Coin RUSD, etc.

CFN provides a fast and low-cost transfer channel for RGB++ assets. Users can quickly trade various RGB++ assets on CFN without the need to settle on the CKB mainchain every time.

Meanwhile, RGB++ provides CFN with a rich variety of asset types. This greatly expands the application scenarios of CFN, making it no longer limited to simple value transfer.

Combining the two can achieve “BTC-level security + ETH-level functionality + Lighting Network-level speed”. This is a highly competitive combination.

In addition to Cross-Chain Interaction payment, the potential application scenarios of CFN around the three business models in the encryption industry, which are asset issuance, lending, and trading, include:

• Cross-Chain Interaction Liquidity Mining: Users providing Cross-Chain Interaction Liquidity for CFN-supported assets can earn rewards, stimulating the issuance and trading of new assets, such as a meme coin launch platform built on CFN for BTC ecosystem.
• Atomic Cross-Chain Interaction Loans: Users can lock assets on the BTC network and borrow corresponding stablecoins on the CKB network without trusting third parties throughout the process.
• Cross-Chain Interaction DEX：Using CFN to build a Decentralizationexchange that supports fast and low-cost trading of BTC, CKB, and various RGB++ assets.

If the above potential scenarios can be implemented in the end, the BTC ecosystem can use CFN’s Cross-Chain Interaction atomic swap capability to achieve native stablecoins, native lending, native DEX, and other Decentralized Finance applications. So, CFN is not just a CKB version of the Lighting Network, but a programmable scalability solution with global significance in the BTC ecosystem.

CFN is about to launch its testnet. We can observe the following indicators for its future development:

• The time point when interoperability with BTC Lighting Network was successfully achieved;
• Cross-Chain Interactionvolumerise curve after Mainnet goes live;
• Number and quality of Cross-Chain InteractionDApps developed based on CFN;
• The adoption of RGB++ assets on CFN.

In conclusion, among many BTC programmability extension solutions including Babylon, Merlin, BoB, and Mezo, CFN stands out as a unique presence. It chooses to innovate based on the classic paradigm of BTCLighting Network, thus possessing the strong Consensus of BTC’s native nature and high scalability. It has the potential to surpass friendly competitors and ultimately win in the future infrastructure competition of BTCFi.