Is the last hope of the Bitcoin ecosystem about to be extinguished? After waiting two years, the launch of the RGB protocol on the Mainnet is disappointing.

Original / Odaily Daily Report

Author / Golem

At 1 AM on August 7th, the long-awaited Bitcoin expansion plan RGB protocol finally launched on the mainnet after two years of preparation. To encourage users to experience the RGB protocol on the mainnet, the infrastructure developer Bitlight Labs simultaneously launched the test coin RGB on the mainnet. Users can obtain RGB through the faucet on the Bitlight Labs official website.

Although RGB is just a test coin, it is essentially the first RGB asset on the Bitcoin mainnet and occupies a token name with symbolic significance. Therefore, 24 hours before the RGB protocol goes live on the mainnet, tutorials for launching new tokens and FOMO sentiment have spread widely, and Degen are rubbing their hands in the dark, making a tough battle seem unavoidable.

However, when the RGB protocol actually went live, FOMO immediately turned into FUD, and even now the progress of the RGB token's new issuance is less than 20%. What caused this shift? Is it still worth participating in the RGB protocol? Odaily will provide a brief analysis in this article.

Review of the RGB protocol

The RGB protocol is one of the hottest smart contract scaling solutions during the booming Bitcoin ecosystem in 2023, but it is also the slowest developing scaling solution. Conceived in 2016 and officially developed in 2019, the development work changed hands several times. In 2023, it gained renewed attention due to strong market demand for Bitcoin scaling, but the development progress remained slow. Consequently, in 2024, it was successfully outpaced by the RGB++ protocol, which also did not escape the fate of decline. It was only after the Bitlight Labs team assisted RGB in development in 2024 that progress truly accelerated, marking the end of a long 5-year journey, and it has finally launched its mainnet.

As time goes on, for most users, the long development time, excellent team background, obscure and difficult-to-understand deep research reports that can easily reach thousands of words may be the only remaining impression of the RGB protocol. These impressions have also been distilled in their minds into the phrase "牛x", which is why such a large-scale discussion and preparation occurred just before the mainnet launch. Therefore, I believe it is necessary to briefly introduce the key points of the RGB protocol in this article.

One-time Seal

For the Bitcoin network, the RGB protocol is an off-chain scaling solution that keeps both smart contracts and transaction data off-chain, which inherently possesses Turing completeness, merely using the Bitcoin mainnet as "security backing."

An important technology in the RGB protocol is the one-time seal, which ensures that the same information can only be used once. The UTXO model of the Bitcoin network is inherently compatible with this technology, as each UTXO can also only be used once. By encrypting the RGB asset information and contract status and encapsulating them in UTXO, these UTXOs are referred to as containers. When a UTXO is spent, the ownership of the asset and the contract status change, which not only effectively prevents double spending but also makes the RGB ledger sufficiently secure.

Client Verification

Another important technology of the RGB protocol is client-side validation. The transfer of RGB assets is broadcasted through the Bitcoin mainnet, but it is conducted by independent off-chain clients. Therefore, whenever a transaction occurs, the client only needs to trace back to verify whether the state related to this transaction is correct, without the need to synchronize and verify all transactions in the network. This enhances the privacy protection of RGB to a certain extent.

The above are two important technologies on how the RGB protocol facilitates asset transfer and ensures security. As for how smart contracts are written off-chain and the advantages and disadvantages of the methods compared to EVM, those are not the key concerns for users.

How to participate in the first RGB token of the new mainnet

The RGB protocol may be complex in principle, but the operation of the token distribution event during this mainnet launch is very simple. Essentially, it is airdrop distribution model: users transfer funds to the project party, which then distributes RGB tokens to users in order. Moreover, due to the lock-up model, the same wallet cannot receive tokens again until the previous distribution is completed, effectively avoiding excessive network congestion.

As of now, the total supply of RGB tokens is 21 million, and due to the limitation of receiving only 50 tokens at a time and the slow distribution, the claim progress is less than 20%. The community estimates that based on the Bitcoin network's block generation speed, it will take at least 17 hours to complete the distribution. Therefore, everyone still has a chance. Below is the detailed tutorial for the new token distribution.

Create Bitlight Wallet and Transfer BTC

First, you need to download the Bitlight plugin wallet, then create a new wallet, and transfer 0.0003-0.0005 BTC from another address to the wallet, which is not too much. It is best not to choose to import an old wallet to avoid asset loss incidents caused by incompatibility of various wallet asset protocols.

Create Container

Then we need to create an RGB UTXO, which is a container for storing RGB assets. First, click on the wallet "UTXOs", as shown in the image below.

Then click on the "Create UTXO" in the upper right corner.

Click "Custom" to customize the amount of Bitcoin contained in the UTXO. Since this UTXO serves as an RGB asset container, it does not require too much Bitcoin; 0.0001 BTC is sufficient. Then select the appropriate fee rate and click next to complete the signature.

It is recommended not to create too many containers consecutively, as creating containers requires paying gas on the Bitcoin network, and unlocking containers (transforming them into normally usable UTXOs) also requires paying gas. Moreover, this new issuance adopts a lock order model and the distribution speed is extremely slow, so for single numbers, creating multiple UTXOs in advance is not very meaningful and instead increases costs.

claim RGB token

However, after the transaction for creating the container is confirmed, visit the Bitlight official website, link your wallet, and click Claim. As shown in the image below, once a wallet has claimed, the user cannot continue to operate and must wait for "Claiming" to end before they can perform the next claim.

From FOMO to FUD

The RGB mainnet's token launch event this time was actually quite smooth, but it still faced strong FUD from the community. The reasons are as follows:

The number of RGB that can be minted at one time is too small

The total supply of RGB tokens is 21 million, and the project team has strictly stipulated that only 50 tokens can be distributed per Claim. Therefore, it will take 420,000 transactions to fully distribute the RGB tokens. Even if we calculate 4,000 transactions per block, it will still take 105 blocks to complete the distribution, which is approximately 17.5 hours.

Therefore, the community complains that the project party has dragged the timeline too long, which will exhaust the market's sentiment and enthusiasm.

Project Party Charge

Another reason RGB is facing FUD is the fees charged by Bitlight Labs. According to on-chain information, each Claim transaction requires users to transfer a fixed amount of 0.00003636 BTC (approximately 4 USD) to a specific address. Therefore, with 420,000 mints, the project team could collect around 1.68 million USD in total.

A transaction to claim RGB tokens

Although the project party finally explained that these fees would cover the transaction fees for future distribution of RGB assets and be used for market making and buyback costs. However, planning is planning, but receiving money is a fact, and many players still cannot believe the project party.

And with the cost of 1.68 million dollars plus the gas fees for users creating containers and transactions, the market value of the first RGB token has already been raised to around 2 million dollars based on cost estimation. Given the current funding stock and popularity in the Bitcoin ecosystem, 2 million dollars is not a low valuation. This may be the real reason for most players' FUD.

written to the end

I am surprised by the attention that the RGB protocol has attracted. In addition to the familiar faces that are always at the forefront of "losing money on new Bitcoin protocols," many users who usually do not pay much attention to the Bitcoin ecosystem have also gotten involved.

Recently, the Bitcoin ecosystem has been quite lively, with a new wave of protocol startups beginning. Spark, BRC 2.0, Rune 2.0, Labitu to the current RGB, you may not be familiar with some of these, but there's no need to worry; the only opportunity you might have missed is the chance to lose money.

New protocols are emerging one after another, each burdened with clichéd yet grand narratives. The reality is that most projects remain forever stuck in early concepts or airdrop parties, with very few actually coming to fruition. The vitality of innovation is certainly important, but today's pace resembles a high-speed industrial assembly line.

The player community remains unchanged, repeatedly flooding into one "new protocol carnival" after another, with wealth being harvested and circulated among this group of people, resembling a subculture formed by a group that is not mainstream but is united by a common belief and a passion intertwined with technology and gambling.

In today's world where Bitcoin is already well-known, how can we not call it magical when there is still a group of people who amuse themselves within it?