# 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?