Detailed Architecture

Ligo Layer 2 is architected to function as a robust sidechain alongside the main Bitcoin blockchain, utilizing a decentralized consensus mechanism known as Random Pool Proof of Multi-properties (RPPOM

1. Problems of Bitcoin Network

Bitcoin, as the world's first and largest blockchain and cryptocurrency, has very high decentralization and security. However, there are still some problems that make it hard for Bitcoin to accelerate mass adoption.

1.1 Poor Scalability

As a Layer 1 blockchain, Bitcoin has high decentralization and security, but this high level of decentralization leads to low scalability, slow block generation, and high latency. A well-established, effective Bitcoin L2 is needed to solve the scalability problem.

1.2 No Turing Complete Virtual Machine

Bitcoin transactions are based on Bitcoin Script, which is a stack-based programming language for locking and unlocking transactions. However, Bitcoin does not support a Turing Complete virtual machine, which has hindered the development of the Bitcoin ecosystem to some extent. The flourishing ecosystem projects on Ethereum are facilitated by the virtual machine and smart contracts.

1.3 High Transaction Fee

The ecosystem prosperity brought by Bitcoin protocols such as BRC-20 and the

continuous rising of BTC prices have pushed up the transaction fee on Bitcoin network, and provided resistance to further expansion of Bitcoin ecosystem.

1.4 Centralization Risk of new Bitcoin Protocols

New Bitcoin protocols such as Ordinals and BRC-20 have spurred the prosperity of the Bitcoin ecosystem, opening up limitless potential for its growth. However, the Bitcoin network does not verify these new protocols but merely stores them. In addition, a centralized server outside the Bitcoin network is needed to complete the cycle of these new protocols. For instance, the Ordinals theory's mechanism for numbering Satoshis operates on a centralized server according to fixed rules, and the Bitcoin network neither stores nor knows any relevant information about Ordinals. Although the BRC-20 protocol records its content on the Bitcoin network, its correctness has not been verified by the network. As a result, it also requires a centralized server outside of Bitcoin to carry out computation and indexing. The risks associated with a centralized server are obvious. Different application providers use their own logic to compute for protocol services. The likelihood of censorship, bugs, delays, and other problems is high, which contradicts the decentralized principles of blockchain and Web3.