Rooch Network - The Application Layer of Bitcoin

The Application Layer of Bitcoin

What is Rooch Network?

Rooch Network is a native application layer for the Bitcoin ecosystem, based on the Stackable L2 solution, serving as the go-to Bitcoin assets launchpad and Bitcoin application infra for users and devs.

Why Rooch Network?

In 2023, the Bitcoin ecosystem saw the emergence of various new asset protocols, characterized by registering asset ownership on Bitcoin with validity verified off-chain, collectively known as client-side validation assets. What future does this suggest for the Bitcoin ecosystem? Opinions vary, but we believe these new asset protocols on Bitcoin signify a new paradigm for building application ecosystems.

Client-side validation assets validate asset validity off-chain, thus allowing for the design of a cross-layer asset migration protocol that truly enables the migration of assets from on-chain to off-chain, simulating a "cash" effect in the digital world. This provides usage scenarios for assets that are no longer limited by the scalability issues of the chain, offering a new scaling solution and infinite possibilities for applications.

This model also suggests a possible launch mode for application ecosystems. By initially attracting users with in-app assets to build a user community, applications can then emerge within the community, solving the cold start problem for applications.

So, what kind of infrastructure is needed to support this model?

  1. First, an off-chain scalable application environment is needed. This environment can provide verification and scalability services for on-chain asset protocols and also run applications to provide scenarios for assets.
  2. Secondly, a cross-layer asset migration protocol is required to facilitate the migration of assets from on-chain to off-chain.
  3. Lastly, a network is needed to connect off-chain applications together, ensuring interoperability between applications.

This is the direction Rooch Network seeks to explore and experiment with.

Technical Solutions and Roadmap

Verifiable Application Container (VApp Container)

The off-chain application environment must first be verifiable, as verifiability is a precondition for decentralization. We refer to Verifiable Application as VApp.

Smart contracts ensure the verifiability of computations, and state trees ensure the verifiability of states, together forming a verifiable application container.

After a year of development, the Rooch team has completed the Move language VApp container, which includes the following modules:

VApp Container

  1. MoveOS: Includes MoveVM and a stackable state tree, providing an execution environment for applications and preserving their states, ensuring the verifiability of computation and states.
  2. Move standard library and framework: Includes Move Stdlib, MoveOS Stdlib, RoochFramework, BitcoinMove, etc., providing basic functionalities such as account abstraction, asset definition, and execution of Bitcoin protocols.
  3. Basic development tools, RPC API, indexing services, and SDKs.

Using this application container, application developers can almost convert most Web2 applications into VApp through Move language. Rooch also introduces the WASM, with the MoveVM running application logic and managing states, and the WASM providing extensibility, making it easier for developers to reuse existing programming language libraries.

Root to Bitcoin

Once we have the VApp container in place, we need to integrate it with Bitcoin. Rooch's approach involves directly executing all blocks from the Bitcoin network within the VApp container, validating UTXOs and the protocols extended on top of UTXOs, and converting them into Move Objects. This provides Bitcoin with a L2 solution that includes the L1 state.

This smart contract layer primarily provides three capabilities:

  1. Providing state proofs for Bitcoin ecosystem applications. Since the states on Bitcoin, including UTXOs and Inscriptions, are contained in the state tree, by publishing the root of the state tree to the Bitcoin network, we can provide state proofs for Bitcoin ecosystem applications. This can prove whether a user owns a particular UTXO or an Inscription at a specific block height.
  2. Extending Bitcoin L1 asset protocols. Design new protocols based on existing asset protocols mainly involves defining and implementing new protocol verification rules, which can be done using smart contract protocol plugins. This way, developers do not need to build new indexers.
  3. Providing programmable capabilities for all data and assets on Bitcoin, creating application scenarios.

With the complete state of Bitcoin, we stack an L2 state layer on top, allowing us to create application scenarios based on the data and assets on Bitcoin, including several approaches:

Settling with Bitcoin L1 assets

This include "Atomic swaps (opens in a new tab)," "PSBT (opens in a new tab)," and "on-chain payment triggers off-chain settlement." These methods are suitable for exchange or payment scenarios and are settled directly on Bitcoin. Developers can utilize the smart contracts provided by Rooch to implement the display and matching of trade orders, as well as to simplify settlements with Bitcoin.

Atomic Binding

Binding L2 assets to Bitcoin L1 assets, enabling the ownership of L2 assets to transfer along with Bitcoin L1 asset transfers. For example, having an Inscription on L1 that represents a piece of land, then building a house on L2, with ownership tied to the land on L1, transferring the land also transfers the house.

Deriving Assets

Deriving new assets from Bitcoin L1 assets, which is a model based on issuing new assets from existing ones. For example, owning certain L1 assets could entitle the holder to certain L2 assets.

Props and Identity

Using Bitcoin L1 assets as props or identity in applications. For example, a certain Inscription representing game equipment, directly used in games on L2. Or using L1 assets for voting governance.

Programming Bitcoin Scripts

Generate Bitcoin scripts and transactions within smart contracts, and enforce user compliance through constraints built on L2 (such as governance or collateral). Users must sign these transactions and include them in L1 blocks, or they face penalties. This feature allows for the creation of on-chain multisig wallets, DAOs, and provides additional security for multisig bridges on Bitcoin.

Further exploration of these models is needed. We refer to this approach as the "stackable" application construction mode, where applications build an additional layer of state on top of the chain's state to repurpose existing data and assets. For more details on the "stackable" mode, please refer to Stackable L2.For programming documentation and examples related to Bitcoin and Move, please see Extending Bitcoin.

Distributed State Tree Protocol (DSTP)

VApp containers are independent, so how can they be connected into a network? And how can the state and assets be interoperable? This is the challenge that the Distributed State Tree Protocol aims to solve.

The idea behind the DSTP is to distribute different sub-trees of the stackable state tree across nodes in a P2P network, achieving scalability and parallel processing. Through the DSTP, the entire network can support an unlimited number of applications with parallel scalability, while still using a global state to share data and assets and enable interoperability of applications.

In the "stackable" state model, each VApp node contains the state of both Bitcoin and Rooch, which are the global state. The state of individual applications is a sub-tree of the global state tree and can only exist on specific nodes. If a transaction only modifies the state of an application without altering the global state, it does not need to be broadcast to the network; the application only needs to periodically sync its state root to the global state, essentially acting as application-specific sharding.

This creates a distributed state tree whose Root on Bitcoin, with data spread across various application nodes in the P2P network. This forms a distributed state tree with **Root on Bitcoin and data scattered on each application node. Assets within applications can move between state trees and also interact with Bitcoin assets.

Distributed State Tree Protocol

The Distributed State Tree Protocol can be extended in two directions:

  1. Integration with state channels. State channels can be understood as a special kind of lifecycle-managed state tree. When state channels involving multiple participants open, the state tree is created; when the channels settle, the application can discard or settle the states in the state tree. This scenario, combined with a P2P network, is highly suitable for multiplayer interactive applications (such as games).
  2. Support for other types of state trees. In theory, existing state trees can be mounted as sub-trees within the distributed state tree, such as git repositories. This allows applications to directly read files from git repositories.

Asset Leap Protocol

Settling directly on Bitcoin L1 still faces issues with high transaction costs and long confirmation times. How to bridge assets from Bitcoin to L2 is a current industry challenge:

  1. Custodial bridge models are widely used. How to use Bitcoin to ensure the bridge's safety and decentralization is still an area of exploration. Rooch will collaborate with dedicated cross-chain bridge projects to implement asset bridging and enhance the bridge's security through Rooch's programming capabilities.
  2. Non-custodial models: This is the main direction Rooch is exploring, such as the statechains (opens in a new tab).

For the Client-side validation assets, we will try to design a asset leap protocol.

If a large number of new assets are issued on Bitcoin in the future, a protocol to facilitate asset migration between the Bitcoin network and L2 is needed to reduce the state storage pressure on Bitcoin. Also, new assets issued on L2 should be able to migrate to Bitcoin, thereby gaining higher security and broader circulation capabilities.

The core idea of the asset leap protocol is as follows:

Assets like RGB/Ordinals that are based on client-side validation use Bitcoin to register ownership, but their validity is verified by the client.

If we define a protocol instruction leap to migrate assets from L1 to L2, or vice versa, and then enable clients to verify on both side, we can facilitate asset migration.

This protocol has several advantages over the current bridge models:

  1. It does not concentrate large amounts of assets in the bridge, thus avoiding centralization risks. The risk associated with asset migration is distributed. Both the migration out and migration in are triggered by users, and the client tracks ownership. As long as the destruction operation when migrating out and the reissuance operation when migrating in are matched, the assets are secure.
  2. Assets can migrate between networks like "cash." Separating the storage of assets from their application scenarios can solve the state explosion problem as well as issues related to the massive issuance of new assets.
  3. This model requires wallets to play a significant role, not just as the current "dumb" wallets that only trust RPC, but rather more "smart" ones.

To this end, the Rooch team has designed the SFT protocol based on Ordinals, Bitseed (opens in a new tab), and will explore asset migration protocols based on the Bitseed protocol in the future. For more details, please refer to the asset leap protocol section of the Client-side validation protocol.

Security Issues

The previous solutions did not address security issues. In the Rooch network, security mainly involves two aspects:

  1. Security solutions for applications, mainly concerning the update permissions of the application state root.
  2. Client-side security solutions, where clients need the capability to verify states.

The security for applications can be customized based on the scenario and development stage, with several options:

  1. Bitcoin-based time-slot rotating nodes + data availability layer + fraud proofs: This method uses time-slot rotations to switch between multiple nodes, ensuring high availability and decentralization of the application, with fraud proofs to penalize malicious nodes. This is the approach that Rooch Network will use, and we will explore with partners how to use Bitcoin as a source of security.
  2. PoA nodes + data availability layer: This type of application can ensure the verifiability of data, allowing anyone to run an independent node to verify data.
  3. PoA nodes: This type of application can provide state proofs to the public, allowing wallets to verify their data. However, without a data availability layer to ensure transaction availability, there is a risk of data being hidden. It serves as a transitional model from Web2 to Web3 applications.
  4. Multisig among all participants: Suitable for state channel applications.

Client-side validation of assets requires wallets not to fully trust RPC nodes but to have the capability to verify states, referred to as smart wallets.

  1. Client wallets need the ability to access the P2P network, discover application nodes within the network, and verify the roots of application state trees through random sampling mechanisms, or even run smart contract virtual machines locally to verify their transactions.
  2. Client wallets need the ability to track asset migrations and at least verify the validity of asset migrations.

This forms a tripartite game mechanism among infrastructure, applications, and users, seeking a balance between scalability and security. Applications can initially use a more centralized solution to validate the market, then gradually transition and relinquish control, adopting a progressive decentralization strategy.

Phased Roadmap

The development of the Rooch VApp container is nearing the release of a new stable version, and we will launch the pre mainnet based on this version.

On the pre-mainnet, we will first experiment with the design of the cross-layer asset protocol, mainly in two directions:

  1. Issuing a new off-chain asset through a self-custody derivative model and attempting to migrate it from off-chain to on-chain.
  2. Exploring the migration of assets from on-chain to off-chain based on the Bitseed protocol, including NFT and FT issued with the Bitseed SFT standard.

We will also experiment with games based on Bitcoin assets and encourage developers to build games and applications, establishing an application ecosystem under the VApp model. Through games and applications, we will distribute options for Rooch Network mainnet tokens to users, which can be exchanged for mainnet tokens in the future.

Then, we will connect to the P2P network, integrate a data availability layer, and achieve node decentralization. We seek partners to co-develop security solutions based on Bitcoin and upgrade the pre-mainnet to the mainnet. For more details, please refer to the Rooch Network Roadmap.


This article has introduced the Rooch Network blueprint and objectives, as well as the paths we are testing; it is not a complete whitepaper.

The VApp provides an operating environment for applications, the Distributed State Tree Protocol connects applications through the P2P network, and the Asset Migration Protocol allows assets to flow between Bitcoin and applications, giving us a complete Bitcoin Application Layer Blueprint.

Bitcoin Application Layer

Of course, there are many issues yet to be resolved before this blueprint can be fully implemented, but we believe that many technological solutions evolve from practice, not from planned designs. We are like explorers in the Age of Discovery, roughly knowing the direction and value of the treasure, but the specific path requires searching and exploration. We can only start with some assumptions, then design minimal protocols and products, validate them in the market, solve problems, adjust directions, and keep iterating. Ultimately, we will find that One Piece.