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Staking Circle
Staking Circle
Jul 2, 2024
6 min read

Exploring Bitcoin L2s w/ Bitlayer

Exploring Bitcoin L2s w/ Bitlayer

In a recent AMA, BitLayer described its distinctive strategy for improving Bitcoin scalability using a native Layer 2 solution based on the BigVM approach. This seeks to improve transaction verification and build trustless bridges by incorporating native Bitcoin functionality and DeFi dApps.!

BitLayer's mainnet, which is already operational with DeFi projects, will switch to a roll-up model for improved scalability and lower fees. The roadmap includes delivering a Bitcoin finality feature this year, with the goal of increasing broaden crypto adoption by simplifying user experiences and lowering entry barriers.

Dive into the AMA highlights to explore BitLayer's plans and innovations in detail.

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Speakers:

Index:

  1. Bitcoin Scalability and Layer 2
  2. BitLayer’s Unique Role in Bitcoin Layer 2s
  3. BitLayer Mainnet Activities
  4. BitLayer’s Approach to Bitcoin Transactions and Fees
  5. User Interaction with BitLayer Mainnet
  6. Roadmap and Future Developments for BitLayer
  7. Engaging with Bitlayer and Adding Value to the Ecosystem

1. Bitcoin Scalability and Layer 2

  • Kevin shared insights on Bitcoin scalability challenges and the role Layer 2 solutions play.
  • BitLayer is building a native BTC Layer 2 using the BigVM approach.
  • Bitcoin verification ability is critical for Layer 2 developments according to Kevin.
  • BitLayer's aim is to enable verification on Bitcoin and create a trustless two-way peg bridge.

We are building a native BTC layer 2 following the BigVM approach. (...) Most of the projects we can hear about in the market have pitched me before. And I know most of their teams, their solutions, their innovations. And yeah, but unfortunately, I think most of them are not making the real innovations, solving the real problems. (...) I think the key part for Bitcoin layer two is to build native BTC layer 2 with Bitcoin verification ability, so without this people can only build sidechains which is not considered to be the best model in the long run. (...) And based on the verification ability, we are going to build a trustless two-way bridge.

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2. BitLayer’s Unique Role in Bitcoin Layer 2s

  • BitLayer differentiates by pursuing native Bitcoin functions for NFT tokens, settlement layers, and issuing Bitcoin-based tokens.
  • State channels have limited functionality and sidechains aren't ideal long-term; hence, BitLayer is following a roll-up model to enable Layer 2 transaction verification on Bitcoin itself.

So what will Bitlayer bring differently from the other protocols? Before using Bitcoin as native NFT tokens. Second, use Bitcoin as the settlement layer or related functions. Third, if you have a token or something like that, you need to issue Bitcoin. (...) All the state channels actually exist for years. But to be frank, in my mind, they are not yet making mass adoption. (...) sidechain is a standalone blockchain with a bridge that connects Bitcoin and the specific sidechain. And the bridge is usually implemented by multi-sig technology. According to these conclusions, we think building a roll-up equivalent model layer 2 is the right path as it should be done. And the key part is to implement a roll-up model and slap-out verification ability. This is why we choose BitVM as our main approach and we are still in this path.

3. BitLayer Mainnet Activities

  • Protocols building on BitNetworking mainnet include DeFi applications such as Dex, lending, and yield farming
  • Formed partnerships with top-tier protocols for restaking and providing yield opportunities within the staking framework.

And back to the projects, I think the DeFi suites like the DEX lending, Yield farming and these projects is the foundation of the basis of the whole ecosystem. So we have plenty of these projects already deployed on Mainnet V1. (...) So we are actively partnering with several top tier protocols like Babylon and Lorenzo and Lombard. All these kind of projects provide more yield or more application scenarios in the staking framework.

4. BitLayer’s Approach to Bitcoin Transactions and Fees

  • BitLayer focuses on security through verifications that happen on Bitcoin, creating the capacity to verify state transitions off-chain
  • Sees bridge tech with a multi-sig approach as a starting point, aiming to evolve to a system where Layer 2 transactions can be checked on Bitcoin
  • Transaction fees for sending native tokens are about $0.05; account abstraction technology is being employed for a better user experience and to pay gas fees in stablecoins via partnerships.

So we want to verify what happens in layer 2 on Bitcoin (...) If we are building a truly complete VM support layer 2 we can easily verify the transaction (...) but if people withdraw from layer 2s back to layer 1s, bitcoin don't have the ability to verify it. (...) And the bridge is usually implemented by multi-sig technology (...) We need to build something with stronger relationship or can verify what happens on layer 2 solutions. That means we can follow the rollup model, like the Ethereum layer 2s do (...) The native token for BitLayer is BTC (...) And it will take $0.05 to send a native token to others. (...) We adopt account abstract technology to provide users with stablecoin paying.

5. User Interaction with BitLayer Mainnet

  • BitLayer Mainnet V1 is 100% EVM-compatible, facilitating an easier migration for developers.
  • Users can use Metamask or OKX wallets to interact with BitLayer and bridge Bitcoin assets to Layer 2, emphasizing a reduction in entry barriers.

The mainnet v1 is totally 100% EVM compatible. (...) It will be super easy to migrate the existing projects which are written in solidity to BitLayer. (...) Users and developers are facing the EVM environments and using the EVM wallets like Metamask, OKEx wallet to interact with the blockchain and can use the Bitcoin wallet to bridge assets into layer 2s. (...) We just want to lower the entrance barriers for the users and developers.

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6. Roadmap and Future Developments for BitLayer

  • Plan three Mainnet versions with seamless migration: Proof of Stake blockchain (V1), transition to a roll-up model using BigVM (V2), and further developments.
  • Expect V2 Mainnet to launch within the year, bringing Bitcoin Finality and verification capabilities to the ecosystem.

According to our roadmap, we will have three versions of Mainnet which can be seamlessly migrated. The V1 is what we call BitLayer PoS. (...) The V2 as we call it Bitcoin Finality v1, which means we will transform from PoS model to roll-up model using BigVM approach. (...) According to our plan, we are going to shift the testnet in two months (...) and we will shift to mainnet this year. I think the V2 with the Bitcoin finality ability will benefit the whole ecosystem.

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7. Engaging with Bitlayer and Adding Value to the Ecosystem

  • BitLayer aims to introduce Bitcoin finality abilities, with verifications for state transitions on or off Bitcoin's chain.
  • Focused on achieving mindset changes: Bitcoin can issue assets, engage in DeFi, and drive wider crypto adoption.
  • Aiming for enhanced user experiences with simplified login and transaction processes to broaden the audience.

We are trying to bring the Bitcoin finality ability to Bitcoin, which means that we can verify the state transition on layer 2 or off-chain. This can be a huge thing on Bitcoin. (...) First, Bitcoin can issue assets. (...) Second, we hope people can have the mindset shift that can believe Bitcoin can earn yield or can enter DeFi (...) Third, we think people are trying to use Bitcoin's popularity to achieve mass adoption of crypto. (...) We need to lower the user entrance barriers like using the account abstract, using stablecoin payments, (...) to make the user forget the key phrase, forget the private key, ideally they'll just be using their email to log in.

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