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Overview

Bitcoin L1 Protocol Architecture

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System Architecture

Yuzo is a hybrid permissionless + permissioned capital markets infrastructure built on native Bitcoin.

It connects:

  • Bitcoin L1 (verifiable data layer)

  • Decentralized EVM execution environment

  • Enterprise-grade RWA fund platform

The system cleanly separates:

  • Permissionless Infrastructure (Public Onchain DeFi )

  • Permissioned Infrastructure (RWA Funds + Compliance)

Permissioned products are differentiated through Yuzo RWA Interface, which acts as a management module to help fund issuers administrate their regulated products. While Yuzo doesn't handle any of the compliance, custody, and fund management, it provides the issuers a framework to do so.

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Design Principles

The protocol is built around explicit architectural commitments designed to preserve Bitcoin’s security model while enabling programmable functionality.

1) Native Bitcoin Settlement

All transactions, inscriptions, and state inputs are committed directly to Bitcoin. Ordering, inclusion, and finality inherit from Bitcoin’s Proof-of-Work consensus.

2) No Separate Validator Set

There is no secondary consensus layer, sequencer committee, or delegated execution authority. State is derived from publicly available Bitcoin block data through deterministic replay.

3) No Federated Bridges

Assets are not wrapped through multisig custodians or federated validators. Token state and programmable execution operate directly on inscribed data anchored to Bitcoin.

4) Deterministic Replay Over Ordered Inscriptions

All token operations and programmable instructions are interpreted strictly in canonical block order. Authoritative state is reconstructed from confirmed inscriptions through reproducible execution.

5) Metaprotocol State Above Consensus

Bitcoin consensus enforces transaction validity, UTXO spending rules, and block ordering. Token balances and contract storage are derived through deterministic interpretation of inscription data layered above consensus.

6) Architectural Intent

The system preserves Bitcoin’s economic security and settlement guarantees while introducing programmable execution through ordered data interpretation.

Security derives from Bitcoin. Execution derives from deterministic replay. State emerges from canonical ordering.

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Security Boundary

The protocol separates consensus enforcement from programmable state derivation. This boundary defines exactly what is guaranteed by Bitcoin and what is deterministically interpreted above it.

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Bitcoin Consensus Enforcement

Bitcoin consensus enforces:

  • Transaction validity

  • Signature verification rules

  • UTXO spending constraints

  • Block ordering

  • Proof-of-Work finality

Bitcoin nodes validate transactions and blocks according to consensus rules. Confirmed blocks provide immutable ordering and economic finality based on network hash power.

These guarantees are native to Bitcoin and independent of any metaprotocol interpretation.

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Metaprotocol Enforcement

Above consensus, the metaprotocol interprets ordered inscription data to derive programmable state.

The metaprotocol layer enforces:

  • BRC-20 token accounting

  • Contract execution semantics

  • Storage state transitions

  • Event log derivation

Token balances and contract storage are computed through deterministic replay of confirmed inscriptions in canonical block order.

Execution does not modify Bitcoin consensus. It derives state from data already committed to Bitcoin.

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Trust Model

Security inherits from:

  • Bitcoin’s transaction validation

  • Canonical block ordering

  • Proof-of-Work finality

Programmable state emerges from:

  • Deterministic interpretation

  • Publicly available block history

  • Uniform runtime execution

There is no separate validator set, delegated consensus, or federated control layer.

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Economic Security Inheritance

The programmable stack inherits its ordering, data availability, and settlement guarantees directly from Bitcoin’s Proof-of-Work consensus.

All programmable instructions are committed as Bitcoin transactions and confirmed within canonical blocks. As a result:

  • Ordering is enforced by Bitcoin miners

  • Data inclusion is secured by Bitcoin’s hash power

  • Finality follows Bitcoin’s confirmation depth assumptions

This architecture differentiates the model from rollups, sidechains, or bridge-based systems that rely on separate consensus mechanisms. Settlement and ordering remain native to Bitcoin.

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