On September 9, 2024, the Fractal Bitcoin launched, with its price and hashrate growth surpassing market expectations. Fractal, as an extension of the Bitcoin ecosystem, has been recognized by many Bitcoin enthusiasts due to its distinctive advantages inherent in Bitcoin's native architecture.

This article will offer an in-depth look at Fractal Bitcoin (FB), including its background, tokenomics, mining mechanisms, and methods, providing miners and investors with a thorough understanding of FB.

Fractal Bitcoin: A Bitcoin-Based Scaling Solution

Fractal Bitcoin was founded by the team behind UniSat, with Lorenzo, the founder of UniSat, playing a pivotal role. UniSat, a prominent project in the BTC ecosystem, offers the UniSat Wallet, which supports BRC20 and Ordinals and has received investment from notable institutions like OKX Ventures and Binance. With these advantages, Fractal Bitcoin’s initial infrastructure is robust, providing well-developed wallets, blockchain explorers, and other tools for a seamless user experience.

Fractal serves as a scaling solution for Bitcoin by virtualizing the core BTC code and packaging it into an independent blockchain software package called the Bitcoin Core Software Package (BCSP). This setup anchors recursively to the Bitcoin network, boosting transaction speeds while ensuring compatibility with the Bitcoin ecosystem.

Unlike many scaling solutions that require asset wrapping, Fractal allows seamless asset transfers between the BTC mainnet and its layers through cross-chain bridges. It also reduces block confirmation times to 30 seconds and increases capacity per layer by 20 times.

Fractal’s approach maintains high native functionality, supporting existing Bitcoin wallets and tools, as well as protocols like BRC-20, Ordinals, and Runes, ensuring alignment with the Bitcoin and offering a unified user experience.

Over a hundred projects are already planning to build on Fractal. Support for the Ordinals protocol was activated at block height 21,000, with the backing for the Rune protocol planned for block height 84,000. Following the Ordinals launch, Fractal network activity surged, with median miner fees reaching up to 5000 sats/vb and miner rewards exceeding three times the block reward. As of September 20, Fractal has over two millions active addresses.

Fractal Tokenomics

FB is the mainnet token on the Fractal network, used mainly for paying transaction fees. The total supply of FB is 210 million tokens, distributed as follows:

• Proof of Work Mining (50% / 105 million): Given as block rewards to miners.
• Ecosystem Treasury (15% / 31.5 million): Allocated for investing in the Fractal ecosystem. A maximum of 10% of the total pool may be used each year, over 10 years.
• Core Contributors (15% / 31.5 million): Awarded to core contributors who build and maintain Fractal's core software. All tokens are locked up for seven months and will be linearly released until the twelve-month mark. 
• Community Grants (10% / 21 million): Used for partnerships and liquidity programs. A maximum of 10% of the total pool may be used each year, over 10 years.
• Advisors (5% / 10.5 million): Reserved for present and future advisors who will provide strategic advice and support for the ongoing development of the Fractal network. A maximum of 20% of the total pool may be used each year, over 5 years.
• Pre-sale (5% / 10.5 million): Offered to early investors. All tokens are locked up for seven months and will be linearly released until the twelve-month mark.

Fractal TokenomicsFractal Mining Mechanism

Fractal Bitcoin employs the SHA-256 algorithm, identical to Bitcoin’s, allowing BTC miners to use their existing equipment for mining FB. To boost network security, Fractal uses the Cadence Mining system and supports both permissionless and merged mining.

In Fractal’s mining model, for every three mined blocks, two blocks will be permissionlessly mined, while one block will be merged mined. Permissionless mining operates independently, enabling BTC miners to switch to Fractal mining similarly to how they would switch to BCH. Merged mining allows BTC miners to mine Fractal blocks simultaneously with BTC blocks without additional hashrate.

The block generation process may not strictly adhere to the “2 permissionless blocks followed by 1 merged mining block” pattern. The network adjusts the difficulty to maintain an overall block creation ratio close to 2:1. Fractal’s initial block reward is 25 FB, and this reward will be halved approximately every 2,100,000 blocks, approximately every 2 years.

How to Mine FB

ViaBTC, the top 3 Bitcoin mining pool, now supports merged mining for FB. Rewards for FB are paid using the PPLNS (Pay Per Last N Shares) payment, with payouts every 3 hours. After creating an account with ViaBTC, miners can connect their BTC mining rigs and choose either the PPS+ or PPLNS payment method to earn FB, along with other tokens like NMC, SYS, and ELA, for added benefits. For a step-by-step guide on mining FB with ViaBTC, see the "FB Mining Guide."

As the Fractal is newly launched, the circulating supply is still limited, with most coins being released gradually. Consequently, early circulation mainly comes from mining, which helps stabilize prices and prevent dilution from excessive supply. Moreover, merged mining does not incur additional costs, making it an excellent way for BTC miners to boost their earnings.

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