Introduction to the New L2 Spark of Bitcoin and Its Ecosystem

In the Bitcoin ecosystem, creating new asset issuance protocols is not difficult; the real challenge lies in whether a continuously active community and project team can be formed. Recently, the Bitcoin ecosystem has once again sparked a wave of new protocols, but most projects merely repackage old concepts using inscription technology, lacking substantial infrastructure and development.

However, there are still some serious teams working hard. On May 20, a well-known Bitcoin ecological trading platform announced a partnership with the new Bitcoin L2 Spark and plans to hold a joint event on May 26. Spark is a new type of Bitcoin scaling solution that officially launched its mainnet test version on April 29. On May 8, the first LRC20 token FSPK was born, and although the minting experience was not great, it still sparked heated discussions in the Bitcoin ecological community. Currently, the OTC trading price of FSPK has reached 12-20 USD per piece, which is at least six times the cost price of about 2 USD per piece.

The cooperation with Spark may mean that the on-chain trading market for LRC20 is about to launch. In addition, Spark has partnered with multiple projects, and the initial form of the ecosystem is beginning to take shape. This article will briefly introduce Spark, the currently issued LRC20 tokens, and its ecological projects.

Spark: A Bitcoin-native L2 designed for payments and settlements

Spark claims to be a Bitcoin native L2 designed for payments and settlements, but in reality, it uses an off-chain scaling solution that does not support smart contracts and virtual machines. Spark allows users to conduct instant, low-cost, and unrestricted self-custody transactions of Bitcoin and other tokens off-chain, while also having native interoperability with the Lightning Network.

Currently, the Spark network has only two operators. Theoretically, all transactions require the joint authorization of at least one operator and a user to be successful. This design carries certain risks; if both operators go down simultaneously, the safety of user funds may be threatened.

Nevertheless, Spark still has the characteristics of being non-custodial and native to Bitcoin. It operates using a Bitcoin-based shared signing protocol in a distributed ledger form, without the need for an additional consensus mechanism. Users' Bitcoin deposits are directly mapped to Spark, without the need for transfer bridges or wrapping. Even if Spark operators disappear or refuse to cooperate, users can still unilaterally withdraw to the Bitcoin mainnet, ensuring the safety of their funds.

Lightspark, the parent company of Spark, was founded by David Marcus, who previously served as the president of PayPal and vice president of Messenger products at Facebook. In May 2022, Lightspark completed a Series A funding round of over $170 million, with a lineup of prestigious investors.

On April 29, Spark launched the public beta of its mainnet, with core functions fully operational, and developers can use Spark's SDK to build applications.

In terms of network fees, users can trade on the Spark network temporarily for free, but a certain Bitcoin on-chain fee is required when depositing or withdrawing Bitcoin to/from Spark. A fee of 0.25% and routing fees are charged when depositing Bitcoin from Spark to the Lightning Network.

Spark Native Token Protocol LRC20

LRC20 is a native token protocol launched by Spark, compatible with the Bitcoin mainnet and Lightning Network, but currently only supports operation on the Spark network. Anyone can issue LRC20 tokens, but must first broadcast a transaction on the mainnet, embedding the token information in the OP_RETURN output.

LRC20 does not support a fair issuance model; only the original issuance wallet can mint tokens. LRC20 supports freezing and burning operations, and the original issuance wallet can freeze tokens on any address, but can only burn the tokens held in its own address. These characteristics make LRC20 more suitable for issuing stablecoins, but there are also centralization risks.

Currently, there are several well-recognized LRC20 tokens in the market:

1. FSPK(8b93 ending ): The first LRC20 token, with a total of 21 coins, over-the-counter trading price of 12-20 dollars per piece.

2. FSPKS: Issued to correct the total amount issue of the first FSPK, with a total of 21 million coins, airdropped to FSPK holders at a ratio of 1:1000.

3. FSPK(6c82 ends with ): total supply of 21 million coins, over-the-counter trading price 4-10 USD/piece.

4. SAT: Total supply of 210 trillion coins, currently no off-market price.

5. SNOW: Launched by the Spark ecosystem project sparksat, with a total supply of 21 million coins, the over-the-counter trading price is $19 per piece.

Early Ecological Projects and Tools

There are already some steadfast builders in the Spark ecosystem, who have established partnerships with stablecoin issuance protocols like brale and Web3 infrastructure like Privy. The main projects and tools include:

1. sparkscan: A browser for the Spark network that allows you to view address balances, transaction records, and other information.

2. SparkSat: The first fully functional web wallet tool on the Spark protocol, capable of asset management, trading, and LRC20 token issuance.

3. Flashnet: One of the operators of the Spark protocol, dedicated to building a non-custodial, Bitcoin-native DEX, and has partnered with brale to launch the Bitcoin stablecoin USDB.