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# System prepended metadata

title: Etch l2 plan

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# Etch L2 plan

The Etch L2 is a bitcoin rollup.

## Product.


 - add a mechanism to post EVM transactions to bitcoin
 - develop a node which tracks bitcoin L1 for these EVM transactions, and ingests them and runs an EVM L2
   - re-engineer some EVM things: fixed gas allowance, direct mapping BTC address <-> EVM accounts, eliminate nonces etc., fix the gas price
 - build a bridge to move L1 BTC to L2 BTC (see [here](https://hackmd.io/@liamzebedee/HkB-X1oE0))
 - deploy a bitcoin stablecoin protocol (dai-style), bitcoin lending protocol, and a bitcoin name system protocol
 - reward BTC bridgers with $ETCH token, use the $ETCH token as a governance token for the stablecoin and name system. All fees go from ENS/stablecoin-lending to the ETCH stakers.

## Tokenomics

BTC -> ETCH -> stETCH

 - Nodes earn $ETCH for bridging BTC + buying names + transacting.
 - Users buy domains and lend USD's using L1 BTC.
 - Fees (L2 BTC) from domains/lending go to ETCH stakers.

70% ETCH to LP's. 30% ETCH to Etch Foundation. 

## Marketing

What is the USP? ie. how do people speculate and earn 10x on an investment

 - buying BTC names before others - ENS shows names are valuable ($1M/year fee revenue, + largest name sale of $1.5M on secondaries - paradigm.eth)
 - accumulating ETCH via the bridging of BTC.


## Revenue projections.

 - $ETCH token.
   - FDV: $10M-$100M.
 - Bitcoin Name System.
   - Fees: $1M/year (high).
 - $ETCH bridging.
   - $1M BTC bridged. 0.03% fee.


## Roadmap

 - bitcoin-based L3's
 - zk prove all of bitcoin using zerosync, sync an etch node in 1s
 - develop bitcoin-mev
   - identify extractible value from bitcoin txs that map to L2 value sets, develop a client
 - celestia sequencing


## Challenges

 - btc max tx size is 4kb. evm max tx size is 780kB
 - btc current DA price 7 sats/byte. evm current price ?
 - developing a BTC-native Metamask wallet
 - does bitcoin 10min blocktime permit a stablecoin design, or too much impermanent loss / market movement? 