Western Bitcoin Layer 2 welcomes a financing boom, learn about the progress of 5 early projects in one article

Author: flowie, ChainCatcher

Editor: Marco, ChainCatcher

Following the completion of a $30 million financing round by BOB at the end of March, Bitcoin Layer 2 projects with Western backgrounds have also secured funding one after another.

On May 7, Botanix Labs announced the completion of a total of $11.5 million in financing, with participation from Polychain Capital, Placeholder Capital, Valor Equity Partners, ABCDE, and Domo, the creator of the BRC-20 token standard.

ZKM, incubated by the Ethereum Layer 2 Metis, which was co-founded by Vitalik's mother, has garnered attention despite its team not being entirely from a Western background. This is after announcing plans to develop Bitcoin Layer 2 and completing a $5 million Pre-A round led by OKX Ventures, with participation from Amber Group, Metis Foundation, Crypto.com, and others.

In April, established crypto developer Thesis announced that its Bitcoin Layer 2 Mezo had also secured $21 million in financing led by Pantera Capital, with participation from Multicoin Capital, Hack VC, and others.

According to incomplete statistics from ChainCatcher, Bitcoin Layer 2 projects with Western backgrounds have raised nearly $70 million in the past two months, with notable participation from well-known investment institutions such as Polychain Capital, Pantera Capital, Multicoin Capital, and Hack VC.

Bitcoin Layer 2 has been one of the core narratives of this bull market, but as the leading Merlin Chain token MERL launched with disappointing performance, the community has begun to widely question the Bitcoin Layer 2 sector, especially projects with Eastern team backgrounds.

As Bitcoin Layer 2 projects with Western backgrounds continue to secure funding, will this reshape the Bitcoin Layer 2 landscape? What progress have the recently funded Western Bitcoin Layer 2 projects made? What opportunities do ordinary investors have to participate? ChainCatcher provides a brief overview.

Botanix Labs/Spiderchain

Botanix Labs, founded in 2022, is the developer of the Bitcoin Layer 2 Spiderchain. Spiderchain claims to be a fully decentralized EVM (Ethereum Virtual Machine) equivalent Bitcoin Layer 2, aiming to combine the security of Bitcoin with the flexibility of EVM.

In terms of security, Spiderchain's most notable feature is its multi-signature wallet mechanism, which creates a dynamic, continuously changing, decentralized multi-signature wallet. This allows users to cross assets between the Bitcoin Layer 1 and Layer 2 networks, avoiding single point risks and malicious attack risks from project super permissions.

Regarding team background, Botanix Labs founder Willem Schroé completed his bachelor's degree in electrical engineering and master's degree in cryptography at KU Leuven, the top university in Belgium, where he researched cryptography related to authentication.

In a recent public interview, Willem Schroé mentioned that after completing his studies, he worked in the chemical industry for six years before moving to Saudi Arabia for two years. In the Middle East, after witnessing Lebanon's hyperinflation, he began to realize the importance of cryptocurrency. He then applied to Harvard Business School to formally study cryptography.

At Harvard, his main research direction also included "forward security," and he wrote a thesis on the concept of Botanix, officially initiating the Spiderchain project.

In terms of project progress, Botanix's testnet went live on November 30, 2023. According to its official Twitter data, as of April 21, the Botanix testnet had connected over 200,000 wallet addresses. “Testnet Tutorial” In February of this year, its official X platform stated that the mainnet would be launched soon, but did not disclose a specific timeline.

Currently, Botanix has launched two applications, AvocadoSwap and Bitzy, for user interaction.

In terms of financing, Web3 asset data platform Rootdata shows that Botanix has completed two rounds of financing. In the $8.5 million seed round announced on May 7, Polychain Capital, Placeholder Capital, ABCDE, Valor Equity Partners, and a series of angel investors including Andrew Kang, Fiskantes, Dan Held, The Crypto Dog, and Domo participated.

Recommended reading: “Analyzing Botanix: The First Fully Decentralized EVM Equivalent L2 on Bitcoin”

BOB

BOB claims to be a hybrid Layer 2 that combines the security of Bitcoin with the versatility of Ethereum.

The project's white paper states that the BOB Rollup solution will be implemented in phases. Initially, it will launch on the OP stack, inheriting Bitcoin's security through a merged mining protocol (Bitcoin re-staking). Its ultimate goal is to settle directly on Bitcoin L1, possibly using ZK Rollups for full state verification. However, considering that ZK verification is unlikely to be supported on Bitcoin in the short term, BOB believes that the best current design is OP rollup, providing on-chain anti-fraud features through mechanisms like BitVM.

On the team front, the core members of BOB are almost the same as those who founded the Bitcoin DeFi application Interlay in 2020. BOB co-founder Alexei Zamyatin was previously the CEO of Interlay, while BOB co-founder and CTO Dominik Harz was the CTO of Interlay. Both hail from Imperial College London and have backgrounds in cryptocurrency and computer research.

Interlay has raised funds twice, with a $3 million seed round led by IOSG Ventures in July 2021, and a $6.5 million round in December 2021 led by DFG, with participation from IOSG Ventures, Hypersphere Ventures, and others. As of May 9, the fully diluted market cap of Interlay's token INTR is approximately $33 million.

BOB announced the completion of a $10 million seed round in March this year, led by Castle Island Ventures, with participation from Coinbase Ventures, Bankless Ventures, Mechanism Capital, IOSG Ventures, Hypersphere Ventures, and others, including old shareholders of Interlay.

In terms of project progress, on May 1, BOB launched the first phase of its mainnet, with a TVL of approximately $300 million. At the launch of the mainnet, it also announced the launch of the BOB Fusion Season 2 Points program. The first quarter points program announced at the end of March has concluded.

In April, BOB also announced a collaboration with the leading mining company Marathon Digital to develop an institutional-focused Bitcoin sidechain ALYS.

In terms of ecosystem, BOB announced that it has integrated with over 40 dApps, including LayerZero, Orbiter Finance, and iZUMi Finance.

Mezo

Mezo is a Bitcoin Layer 2 developed by the crypto developer Thesis, which was established in 2014. Mezo positions itself as the economic layer of Bitcoin Layer 2.

Thesis states that Mezo differs from other Layer 2 networks in that it enables users to access applications that promote the use of Bitcoin tokens, driving a circular Bitcoin economy, rather than just being a "savings technology." In simple terms, Mezo aims to focus more on the economic needs of BTC holders, allowing them to earn money through Bitcoin.

In terms of asset bridging, Mezo is based on the Bitcoin bridge tBTC developed by Threshold Network, combining the functionalities of Keep and NuCypher. Threshold Network is a privacy network protocol developed by Thesis. The Bitcoin locked in Mezo is not centrally custodial and reduces the risk of malicious actions through random selection of signers and over-collateralization.

For BTC holder incentives, Mezo has set up three mechanisms: HODL Proof, HODL Score, and deposit custody. Users can lock BTC and MEZO tokens and protect the network by validating transactions through CometBFT consensus. The longer the locked deposit, the higher the HODL score, which may serve as a weight for future airdrops. When the Mezo mainnet launches, users can contribute to network security through HODL Proof and earn rewards in return.

On the team front, Thesis founder Matt Luongo and co-founder and COO Corbin Pon both come from Georgia Tech and have backgrounds in computer research. Matt Luongo has previously invested in crypto privacy projects like Iron Fish, liquidity re-staking projects like Rio Network, and identity and data management protocols like Spruce.

In terms of project progress, Mezo has not yet launched its testnet and has not announced a specific launch date. According to its roadmap, Mezo plans to launch its mainnet in the second half of 2024, with the MEZO token also being released alongside the mainnet.

In terms of financing, on April 9, Mezo announced the completion of a $21 million Series A financing round, led by Pantera Capital, with participation from Multicoin, Hack VC, Draper Associates, and others.

Thesis has previously raised funds twice, with a $7.7 million financing round in April 2020 led by Paradigm, with participation from Fenbushi Capital, Collaborative Funds, and others. In July 2021, it raised $21 million in a financing round co-led by ParaFi Capital and Nascent, with participation from Dragonfly, Fenbushi Capital, Polychain, and others.

Recommended reading: “Understanding Mezo: Backed by Pantera and Multicoin, Building the Economic Layer of Bitcoin L2”

ZKM

ZKM is a network based on zero-knowledge proofs, aiming to unify blockchains, and has recently announced plans to launch a Bitcoin Layer 2 solution. ZKM is also an incubated project of the Ethereum Layer 2 Metis, with two core technologies: the Entangled Rollup architecture and a universal zkVM.

Entangled Rollup allows assets to cross chains without relying on traditional cross-chain bridges, attempting to synchronize states between blockchains through recursive zero-knowledge proof technology, similar to Metis's Optimistic Rollup mechanism.

ZKM is currently trying to adapt this security framework to Bitcoin Layer 2. It has introduced the OCP mechanism (Optimistic Challenge Process) to achieve off-chain computation.

Regarding team background, ZKM's co-founder and CEO Kevin Liu is also a co-founder of Metis. Although the team is not entirely from a Western background, the project behind Metis was co-founded by Vitalik's mother Natalia Ameline and her friend Elena Sinelnikova, which has still garnered significant attention for ZKM.

In terms of financing, on May 7, ZKM announced a $5 million Pre-A round, led by OKX Ventures, with participation from Amber Group, P2 Ventures, Waterdrip Capital, Metis, Crypto.com Capital, and others.

Recommended reading: “How to View ZKM Entering the BTC L2 Track?”

QED Protocol

QED is positioned as the zk-native execution layer for Bitcoin.

QED states that it has solved the fundamental scalability issues of blockchain by using zk-PARTH, a novel state model that enables large-scale parallel transaction proofs and block generation, allowing QED to scale to millions of transactions per second while ensuring security through mathematical proofs.

QED founder Carter Feldman graduated from the University of Illinois at Urbana-Champaign with a degree in computer science.

In April, QED announced a collaboration with StarkWare, zk.Link, Mina Foundation, and 0(1) Labs to establish the L20 Alliance, dedicated to maintaining or resolving Bitcoin's security, internet scale, and the interoperability of applications and L2 solutions.

In terms of project progress, QED's official website shows that it is currently in private beta testing, with a public testnet launching soon.

In terms of financing, on February 27, 2024, QED Protocol announced the completion of a $3 million financing round led by Arrington Capital, with participation from StarkWare, Draper Dragon, and others.