Bitcoin Layer 2 welcomes a financing boom, an overview of 20 early projects
Bitcoin Layer 2 is flourishing.Author: flowie, ChainCatcher
Editor: Marco, ChainCatcher
After the craze of inscriptions has come to a temporary halt, Bitcoin Layer 2s are expected to carry the hopes of sustaining the prosperity of the Bitcoin ecosystem.
Currently, Bitcoin Layer 2s are showing a flourishing trend similar to Ethereum Layer 2s, attracting a large number of entrepreneurs to enter the space. In addition to the well-known Lightning Network, Liquid Network, and Stacks, the Bitcoin ecosystem has seen the emergence of a large number of new projects claiming to be Bitcoin Layer 2s, such as B² Network, BEVM, Dovi_L2, and Map Protocol.
Du Jun, co-founder of ABCDE Capital and Huobi, stated that he will personally invest $50 million to deeply participate in the construction of the Bitcoin ecosystem, viewing Bitcoin Layer 2 as a preferred track.
Bitcoin Layer 2s are also experiencing a fundraising boom, gaining favor from investors.
Recently, the Bitcoin Layer 2 network Bitfinity completed a $7 million token financing at a valuation of $130 million, with participation from Polychain Capital and others.
Domo, the founder of Bounce Finance and BRC-20, participated in the angel round financing of the Bitcoin data availability layer Nubit, with some crypto users viewing Nubit as the "Celestia" of the Bitcoin ecosystem.
After inscriptions created a new way of asset issuance, how will Bitcoin Layer 2s expand more functions and ecosystems beyond payments for the Bitcoin network, and can they replicate the prosperity of Ethereum Layer 2s?
ChainCatcher has systematically sorted out the current Bitcoin Layer 2 solutions, representative projects, and their progress. The article is divided into two parts. In the first part, we introduced the progress of several leading Bitcoin Layer 2 protocols in 《The Flourishing of Bitcoin Layer 2: An Overview of 6 Major Protocols' Progress》; this article is the second part, mainly summarizing the overview of 20 early Bitcoin Layer 2 projects.
20 Early Bitcoin Layer 2 Projects Worth Noting
In mid-2023, Ethereum founder Vitalik suggested in a Twitter Space about the Bitcoin ecosystem that Bitcoin should not only serve as a payment method; it needs scaling solutions like Plasma or ZK Rollup. Optimism and Arbitrum are two successful Rollups that can serve as case studies for Bitcoin.
From the Bitcoin Layer 2 projects that have emerged in the past two years, many indeed adopt Rollup as a scaling solution. Additionally, several projects emphasize EVM compatibility. There are also some Bitcoin Layer 2s that incorporate AI narratives.
1. Rollup
B² Network was established in 2022 and is a Bitcoin Layer 2 network based on ZK-Rollup, compatible with EVM, allowing EVM ecosystem developers to seamlessly deploy DApps.
B² Network participated in the roadshow for Bitcoin ecosystem projects by ABCDE in November 2023 and ultimately secured investment. According to ABCDE, the core members of the B² Network technical team are active members of mainstream Web3 open-source communities such as Ethereum, Bitcoin, Cosmos, and Sui, and have received multiple grants for support. The team specializes in Web3 Infra products such as blockchain Layer 1, Layer 2, cross-chain, and account abstraction, with mature engineering capabilities.
On December 18, 2023, B² Network announced the launch of the Alpha testnet MYTICA for partners and publicly recruited ecosystem developers, allowing partners and developers to deploy DApps on the B² Network testnet.
The cross-chain protocol Meson of the B² Network ecosystem has deployed the stablecoin USDC on the B² Network Alpha testnet. Meson is a cross-chain protocol focusing on speed, stability, security, and low fees, supporting the free circulation of mainstream digital assets like ETH, BNB, USDC, and USDT between B² Network and over 30 mainstream public chains.
On January 3, B² Network announced a $1 million donation plan to incentivize ecosystem builders.
BL2（BL2T ）
BL2 is a Bitcoin ZK-Rollup Layer 2, built on the VM general protocol and the modular blockchain Celestia's DA layer, bringing ZK-Rollup to Bitcoin and implementing multi-node ZK verification on the Layer 2 network, supporting on-chain backup of inscriptions and cross-chain operations.
BL2 launched the BRC-20 token $BL2T, with a total supply of 21 million, used for BTC network L2 governance, with 20% allocated for fixed gas burn. On January 8, BL2 conducted an IDO on Turtsat at a price of 30 Sats (approximately $0.013).
Chainway was established in 2022 and is a blockchain infrastructure company focused on Bitcoin, Ethereum, and zero-knowledge technology. Chainway has developed Bitcoin's ZK Rollup, the browser extension tool OrdinalSafe, and the zk tool Proof of Innocence.
Recently, Chainway announced on its official social media that it plans to launch a public mainnet for Bitcoin ZK Rollup in 2024 and establish a Bitcoin ZK Rollup community.
Bison was established in 2023 and is a Bitcoin-native zk-rollup that enhances transaction speed while implementing advanced features on native Bitcoin. Developers can use zk-rollup to create innovative DeFi solutions, such as trading platforms, lending services, and automated market makers.
Bison also participated in the roadshow for ABCDE's Bitcoin ecosystem projects, and it was reported that Bison's solution utilizes zero-knowledge proofs and Ordinals for fast and secure transactions. All data is anchored back to Bitcoin to enhance security. Bison can achieve up to 2,200 transactions per second, with fees being 1/36 of Bitcoin's.
The Bison team includes contributors from Starknet.
Rollux was established in 2023 and developed by Layer 1 blockchain Syscoin (SYS). It is an Optimistic rollup equivalent to EVM, inheriting the security of Bitcoin's mining network and Syscoin's Layer 1 data availability.
It is reported that Syscoin announced in June 2022 that it had received a $20 million ecological development fund from the cryptocurrency exchange MEXC.
Rollux launched its mainnet in June 2023 and stated plans to transition from Optimistic Rollup to ZK-based Rollup. Rollux has not yet launched a new token but uses Syscoin as the gas token.
BOB (Build On Bitcoin) was established in 2020 and is an EVM rollup stack with native Bitcoin support. It allows developers to build decentralized applications on top of Ordinals, Lightning, and Nostr.
Currently, BOB has launched a public testnet, which runs in real-time on the Sepolia Ethereum testnet. According to BOB's official roadmap, BOB will first integrate Bitcoin's security through PoW re-staking and upgrade the Optimistic Rollup to ZK proofs.
Hacash.com was established in 2022. Compared to sidechains and pure OP/ZK Roll-ups, the solution proposed by Hacash.com appears to be a "ultimate patchwork" (not derogatory) as it establishes state channels and performs multi-layer scaling. Unlike bidirectional transfer sidechains, Hacash's principle is to achieve one-way transfer of Bitcoin on Layer 1, allowing Bitcoin to be transferred to the Hacash chain without changing the user's private key, and completing payment operations through state channels deployed on Layer 2. Additionally, the Hacash team has proposed a Layer 3 concept based on this to achieve ecological scaling.
The Hacash Layer 1 network has been running since 2019, still using PoW as the underlying consensus mechanism, and utilizes three PoW currencies: HACD, BTC, and HAC, to self-regulate the supply system for issuance, distribution, and settlement, addressing the issue of Bitcoin's lack of monetary attributes. Layer 2 constructs payment settlement channel chains, mainly for large-scale payments, while serving as the infrastructure for Layer 3. Layer 3 is an ecosystem for multi-chain interaction and application building, supporting asset issuance, smart contract execution, and data interaction and cross-chain.
Ken You, co-founder of Hacash.com, published an article titled 《ZK-Rollups Top Three Possibilities for Scaling Bitcoin》, in which he seems to indicate the team's intention to establish a new chain using ZK roll-up.
BeL2 is a Bitcoin Layer 2 launched by the Layer 1 blockchain Elastos (ELA). This is a BTC Rollup that will allow Bitcoin to incorporate smart contracts and irreversible digital protocols. These smart contracts can be fully defined, managed, tracked, and modified on Bitcoin without intermediaries.
The network will also allow users to stake their Bitcoin holdings and earn rewards when interacting with applications built on BeL2.
Elastos plans to announce partnerships supporting BeL2 and use cases in finance, entertainment, and real-world assets (RWA) in the coming months.
2. Bitcoin Sidechains
Libre（LIBRE）
Libre was established in 2022 and is a Bitcoin L2 sidechain aimed at enhancing Bitcoin's performance by improving its speed and usability.
The Libre mainnet launched on July 4, 2022, and shortly after the mainnet launch, Libre released an airdrop of 10 million LIBRE tokens, of which only 277,000 LIBRE were claimed. In addition to the Layer 2 blockchain, Libre also launched a beta version of the BRC20 Dex and a mobile app to facilitate user trading of inscriptions.
3. Bitcoin Data Availability Layer
Nubit was established in 2023 and serves as the data availability layer for the Bitcoin ecosystem, aimed at changing the way transactions are processed on the Bitcoin network. Its development team, Riema, proposed BRC-1310, a dedicated Bitcoin-native data availability standard that employs various advanced technologies. This includes Bitcoin-native staking, data availability sampling technology, direct data proofing on the Bitcoin network, and decentralized bridges.
On January 4, the Bitcoin Layer 2 protocol Nubit announced it had secured angel round financing from Bounce Finance and Domo, the founder of BRC-20.
4. On-chain Indexer
Rooch was established in 2022 and is a modular blockchain platform proposing the use of on-chain indexers to scale the Bitcoin network.
On Rooch, all Bitcoin block headers and UTXO states are synchronized as objects in MoveVM, with UTXOs indexed and cross-validated by light clients and all block headers. The indexed Bitcoin UTXO information can then be used in smart contracts of full-chain applications built on Rooch.
Importantly, all UTXOs are not locked on the Bitcoin network; only their state information is synchronized to Rooch. This means that no Bitcoin assets can be transferred from Bitcoin to Rooch. Only the latest Bitcoin UTXO states will be synchronized to Rooch in real-time to ensure correctness.
Recently, Rooch announced it will soon launch the pilot network RoochBTC, which will index the complete state of the Bitcoin mainnet on-chain, along with the necessary content for developing full-chain applications using Bitcoin assets, including SDKs, wallet APIs, documentation, and examples.
5. Integrating AI
x.TAI is a Bitcoin Layer 2 network based on AI cryptographic algorithms. In December 2023, x.TAI announced the upcoming launch of its Layer 2 inscription chain xTAI Network based on its XRC20 protocol, with the BRC20 inscription xtai serving as the ecological governance token.
According to x.TAI's official Twitter, details of the xTAI Network were originally scheduled to be announced on January 1, but x.TAI did not release them on time and currently has no specific timeline for the announcement.
AiPTP（ATMT）
AIPTP was established in 2023 and is a decentralized AI network based on blockchain. AIPTP will build a dual L2 network for Bitcoin, including a Bitcoin L2 with a POS mechanism (tentatively named AIS) to support AIPTP's training models; and a Bitcoin L2 with a PoW mechanism (tentatively named AIW) to support AIPTP's inference models. Bitcoin and ATMT can circulate across three chains, with ATMT using a burn+mint cross-chain circulation method, while Bitcoin uses staking from chain A to be released to chain B for cross-chain swaps.
6. Others
BEVM was established in 2023 and is a decentralized Bitcoin L2 compatible with EVM. BEVM is based on technologies brought by the Taproot upgrade, such as the Schnorr signature algorithm, allowing BTC to cross-chain to Layer 2 in a decentralized manner. Since BEVM is EVM-compatible, all DApps running in the Ethereum ecosystem can operate on BTC Layer 2, using BTC as gas.
On November 29, 2023, BEVM released its white paper.
BEVM has launched the pilot network ChainX. The annual data for the 2023 BEVM pilot network shows: a total transaction volume of 2.77 million, a total of 55,000 active addresses; TVL reached 119.56 BTC (approximately $5.09 million); the total bridge capacity to Ethereum L2 is $11.53 million. Recently, the BEVM pilot network launched the first inscription protocol Bevscriptions, processing 3 million transactions within 6 hours, with a TPS of around 150.
In December 2023, the first phase of the Odyssey event was launched and has now concluded. BEVM founder Gavin (@gguoss) stated that the second phase is expected to start on January 15, inviting 10-20 ecological projects to participate. The second phase will not use the name "Odyssey," but will be named after the location of the first BTC block mined by Satoshi, "Helsinki."
Currently, the BEVM ecosystem includes over 20 projects such as the BTC full-chain DEX OmniSwap and the decentralized signature protocol Bool Network.
Recommended reading: 《BEVM Founder’s Narrative: Why and How to Build BTC Layer 2?》
Dovi（DOVI）
Dovi was established in 2023 and is a Bitcoin Layer 2 compatible with EVM smart contracts. In November 2023, Dovi officially released its white paper. The white paper describes Dovi's integration of Schnorr signatures and MAST structures to enhance transaction privacy, optimize data size and verification processes; it provides a flexible framework for issuing various asset types beyond Bitcoin, enabling cross-chain asset transfers.
KuCoin Labs announced a strategic investment in Dovi in December 2023, and its native token DOVI was listed on the KuCoin exchange on December 12 of the same year. The token distribution of the Dovi protocol follows a fair release model, with 15 million tokens fully claimed within 4 hours of launch. As of January 15, DOVI's fully diluted market cap is approximately $9.4 million. Users can stake DOVI on the official website to earn rewards.
Dovi's official website states that the next step will be to launch the testnet, establish a developer community and ecosystem support, and release Dovi V1.
ZeroSync was established in 2022, aiming to scale Bitcoin through zero-knowledge proofs (ZK-Proofs, ZKP). Its main application is to enable all nodes on Earth to almost instantly complete blockchain synchronization and verification through Blockstream satellites. At the end of 2023, ZeroSync team member @lucidLucky released the first chain state proof into space via the @Blockstream satellite.
ZeroSync is based on STARK proofs and will use the Cairo language created by StarkWare. ZeroSync will be launched in three consecutive phases: header chain proof, hypothetical valid chain proof, and full chain proof, with the first two prototypes already completed. The ZeroSync Toolkit will also provide tools for Bitcoin developers to apply zero-knowledge proofs to their own products and services. It is reported that ZeroSync's development has received sponsorship and support from StarkWare, OpenSats, Spiral, and Geometry.
On October 9, 2023, Robin Linus, the project leader of ZeroSync, published a white paper titled "BitVM: Compute Anything On Bitcoin," sparking widespread discussion on enhancing Bitcoin's programmability. BitVM stands for "Bitcoin Virtual Machine," aiming to allow developers to run complex contracts on Bitcoin.
MAP Protocol was established in 2019 and is a Bitcoin Layer 2 for peer-to-peer cross-chain interoperability. The MAP protocol leverages Bitcoin's security mechanisms to allow assets and users from other public chains to interact seamlessly with the Bitcoin network. This not only enhances network security but also achieves BRC20 cross-chain capabilities.
Recently, MAP Protocol announced it has secured strategic investments from DWF Labs and Waterdrip Capital.
It is reported that MAP and MAPO are both native tokens of MAP Protocol, representing the same token but distinguished by different code symbols for their respective chains. On December 18, MAP Protocol announced a large-scale token burn, totaling 133,886,020 MAP/MAPO, accounting for 5.9% of the circulating supply. As of January 15, MAP's fully diluted market cap is approximately $260 million.
Tectum was established in 2017 and is a distributed ledger protocol management platform. Its ecosystem includes Tectum Blockchain, Tectum Wallet, Tectum Token (TET), Tectum SoftNote, and 3FA identity authentication applications.
Among them, Tectum SoftNote is a non-custodial Bitcoin Layer 2 that can scale Bitcoin's transaction volume to hundreds of thousands or even over a million transactions per second.
Tectum's native token is TFT, which can be used for minting SoftNotes, paying reduced merchant fees, minting tokens for T12-20 standard projects, and accessing other Tectum/CrispMind products. Currently, TET has opened mainnet staking. As of January 15, TFT's fully diluted market cap is $275 million.
Bitfinity (formerly InfinitySwap) was established in 2021 and is a Bitcoin Layer 2 network based on Internet Computer and EVM compatibility. Previously, InfinitySwap aimed to make BTC collateral mainstream through AMM, being referred to as the "Uniswap" of the Internet Computer (ICP) blockchain network.
Recently, Bitfinity completed a $7 million token financing at a valuation of $130 million, with participation from Polychain Capital, ParaFi Capital, Dokia Capital, and Draft Ventures. In 2021, Bitfinity also secured $1.5 million in seed funding from Polychain, a16z Crypto, Internet Computer, Dfinity, and Draft Ventures.
Currently, Bitfinity is in the testnet phase, and the mainnet launch date has not been announced.
BitBolt Network is a Bitcoin Layer 2 network utilizing account abstraction and threshold ECDSA technologies, dedicated to Bitcoin payments and the Ordinals ecosystem. BitBolt enables users to conduct Bitcoin transactions at lightning speed while ensuring low transaction fees and leveraging smart contract functionality. BitBolt Network has launched the Thunder test network.
In July 2023, BitBolt Network conducted an IDO, but the team later stated that the IDO did not meet the goal of raising 3 Bitcoin, so they decided to refund the addresses that participated in this IDO.
DFS Network is a Bitcoin Layer 2 that announced the launch of its mainnet on January 1 and began mining its mainnet token DFS on January 3. It is reported that the initial version of the DFS Network mainnet has very simple functions, including Swap, liquidity mining, on-chain social circles, node voting, and mainstream BRC20 inscription cross-chain deposit and withdrawal transactions.
According to official information, DFS is the mainnet token of DFS Network, which will be used for governance of the mainnet and part of the dex's fee buyback and burn. The total supply of DFS is 10 million, with 1 million DFSN fairly distributed on the BTC chain and 2.5 million DFS fairly distributed on the EOS chain, which will be 1:1 airdropped to DFS Network, with the remaining 6.5 million released fairly through liquidity mining. The relationship between DFSN and DFS is: 1 DFS = 1 DFS, 1 DFSN = 1 DFS + 1 meme (BRC-20). 0.05% of the Swap fees will be used to burn DFS.
