The bull market will break out in the second half of the year, and you must understand the BTC ecosystem's upcoming token projects

Author: Biteye Core Contributor Viee

Editor: Biteye Core Contributor Crush

Community: @BiteyeCN
As the Federal Reserve increases the likelihood of interest rate cuts starting in September, market liquidity will significantly improve, leading to a continuous influx of funds into the Bitcoin market. This wave of capital inflow is bound to drive Bitcoin prices up, attracting more investors' attention.

When Bitcoin prices rise, it will trigger a "love for all things Bitcoin" effect—investors will develop a keen interest in various projects and applications within the Bitcoin ecosystem. It is foreseeable that this virtuous cycle of improved liquidity and rising Bitcoin prices will lay a solid foundation for the prosperity of the Bitcoin ecosystem.

Looking back at the surge last year, the popularity of Ordinals and the wealth effect brought by inscriptions led the market to focus more on the Bitcoin ecosystem. As the market gradually warms up, this article will explore potential token projects within the Bitcoin ecosystem to help everyone seize new opportunities in the bull market.

0 1 Project Overview

L2 Mainnet

1. Bitlayer: Total funding of $16 million, invested by Framework Ventures, OKX Ventures, and others.

The first Layer 2 network based on BitVM that is securely equivalent to Bitcoin, aiming to become the computational layer for Bitcoin, introducing ultra-scalability while inheriting Bitcoin's L1 security, providing users with high throughput and low-cost transaction experiences.

2. BOB (Build on Bitcoin): Total funding of $11.6 million, invested by Castle Island, Bankless Ventures, and others.

A hybrid Layer 2 that combines the security of Bitcoin with the flexibility of Ethereum smart contracts, supporting Ordinals, Lightning, and Nostr within the Bitcoin ecosystem.

3. B² Network: Total funding undisclosed, invested by HashKey Capital, OKX Ventures, and others.

A Bitcoin Layer 2 solution based on zero-knowledge proofs, aimed at enhancing transaction speed and expanding application diversity while ensuring security, supporting Turing-complete smart contracts.

4. BEVM: Total funding undisclosed, invested by Skyland Ventures, Waterdrip Capital, and others.

A fully decentralized Bitcoin Layer 2 solution compatible with the Ethereum Virtual Machine (EVM), aimed at expanding Bitcoin's smart contract capabilities and using native Bitcoin (BTC) as transaction fees.

5. Rollux: Total funding undisclosed, invested by Dewhales Capital and others.

An EVM-compatible Optimistic Rollup platform based on Bitcoin, aimed at enhancing Bitcoin's scalability and smart contract functionality, providing developers with a secure and low-cost decentralized application environment.

L2 Testnet

1. Babylon: Total funding of $96 million, invested by Paradigm, Polychain, Binance Labs, and others.

This protocol is a Bitcoin staking protocol that allows users to lock Bitcoin in the Bitcoin network to provide security for other POS chains while earning staking rewards.

2. Mezo: Total funding of $28.5 million, invested by Pantera Capital, Ledger Cathay Capital, and others.

An EVM-compatible Bitcoin economic layer aimed at promoting a circular Bitcoin economy by providing applications that facilitate the use of Bitcoin tokens, going beyond mere "savings technology."

3. Botanix: Total funding of $11.5 million, invested by Polychain, ABCDE Capital, and others.

A decentralized Turing-complete L2 EVM built on Bitcoin, consisting of two core components: the Ethereum Virtual Machine (EVM) and Spiderchain, combining Bitcoin's security with the usability of EVM.

4. Nubit: Total funding of $11 million, invested by Polychain, OKX Ventures, and others.

The first Bitcoin DA layer, aimed at effectively expanding Bitcoin's data capacity, supporting applications such as Ordinals, Layer 2 solutions, oracles, etc., thereby enhancing the scope and efficiency of the Bitcoin ecosystem.

5. Arch Network: Total funding of $7 million, invested by Multicoin Capital, OKX Ventures, and others.

A Bitcoin Layer 2 that uses a Rust-based zero-knowledge virtual machine (ArchVM) and combines a decentralized validator network to provide developers with an efficient and scalable application environment.

6. Bitfinity Network: Total funding of $7 million, invested by Polychain, ParaFi Capital, and others.

An EVM-compatible Bitcoin Layer 2 network that uses Solidity language and leverages IC's unique architecture and Chain Key technology, matching traditional network services in storage capacity and processing speed without gas fees.

7. Zulu Network: Total funding of $3 million, invested by Waterdrip Capital, Cryptogram Venture, and others.

A Bitcoin Layer 2 that employs a unique dual-layer architecture to expand the functionality of the Bitcoin network. ZuluPrime (L2) achieves EVM compatibility, while ZuluNexus (L3) acts as a third layer for Bitcoin, providing additional security guarantees.

8. Citrea: Total funding of $2.7 million, invested by Galaxy, Delphi Digital, and others.

The first zero-knowledge proof-based Layer 2 in the Bitcoin ecosystem, utilizing a unique bi-directional peg architecture to realize the first-ever general-purpose trust-minimized Bitcoin Layer 2 solution, bringing enhanced programmability and application scenarios to Bitcoin.

9. Fractal Bitcoin: Total funding undisclosed, developed in collaboration with UniSat and Block Space Force.

A Layer 2 scaling solution based on Bitcoin's core code, aimed at improving Bitcoin's transaction processing capacity and speed by recursively creating infinite layers while maintaining full compatibility with the Bitcoin main chain.

L2 Pre-Testnet

1. Lorenzo Protocol: Total funding undisclosed, invested by Binance Labs and others.

A decentralized liquidity staking platform based on Babylon, aimed at providing users with secure and convenient Bitcoin staking services. The protocol allows users to stake Bitcoin and receive liquidity staking tokens through a liquidity financial layer.

2. QED Protocol: Total funding of $9 million, invested by Blockchain Capital, Arrington Capital, and others.

A Bitcoin-based zk-native execution layer focused on zero-knowledge proof verification technology, supporting decentralized exchanges, DeFi, and other wide-ranging applications on Bitcoin through the Taproot upgrade, promising high-speed transactions and global state access.

3. GOAT Network: Total funding of $5 million, invested by Metis Foundation and others.

The first Bitcoin Layer 2 solution that shares ownership and mining rewards through a decentralized sequencer, introducing unique OP technology to expand the Bitcoin network via Rollup.

4. Nexio: Total funding of $2.2 million, invested by Lattice Capital, HTX Ventures, and others.

An innovative Bitcoin scaling solution that utilizes parallel Rollup technology, aiming to support over 30,000 transactions per second while keeping transaction fees below $0.01.

DeFi Mainnet

SolvProtocol: Total funding of $10 million, invested by Binance Labs, The Spartan Group, and others.

A full-chain foundational yield protocol that provides asset income services based on currency, allowing users to deposit BTC into Solv Protocol to earn Solv btc.

DeFi Testnet

1. BitSmiley: Total funding undisclosed, invested by ABCDE Capital, OKX Ventures, and others.

A stablecoin lending protocol based on the Bitcoin ecosystem, combining over-collateralized stablecoin protocols, trustless lending protocols, and derivatives protocols to fill the demand for stablecoins and lending infrastructure in the Bitcoin ecosystem.

2. Chakra: Total funding undisclosed, invested by ABCDE Capital, Bixin Ventures, and others.

A Bitcoin re-staking protocol driven by zero-knowledge proofs, utilizing ZK-STARKs technology and middleware chains to solve trust issues with intermediaries. It has established a partnership with the data availability layer Nubit to modularly enhance the Bitcoin ecosystem.

DeFi Pre-Testnet

Lombard: Total funding of $16 million, invested by Polychain, OKX Ventures, and others.

A Bitcoin re-staking protocol that promotes the development of the Bitcoin staking ecosystem by allowing users to move yield-generating Bitcoin across chains without fragmenting liquidity.

RGB+ Lightning Network Mainnet

BiHelix: Total funding undisclosed, invested by Waterdrip Capital, LK Venture, UTXO, Satoshi Labs, and others.

A Bitcoin ecosystem infrastructure based on the native Bitcoin blockchain, combining RGB protocol and Lightning Network to build optimized nodes. The project aims to lower development barriers and increase Bitcoin's application scenarios.

RGB++ Pre-Testnet

UTXO Stack: Total funding undisclosed, invested by ABCDE Capital, OKX Ventures, and others.

A Bitcoin Layer 2 issuance platform based on the UTXO model, natively integrating RGB++ protocol capabilities, aimed at helping developers quickly deploy applications based on the UTXO architecture.

L3 Mainnet

U Protocol: Total funding undisclosed, invested by Alfa DAO, YAM DAO, and others.

The first Bitcoin Fi modular Layer 3 infrastructure, providing features such as uBTC and U Bitcoin Thunder Network, aimed at enhancing Bitcoin's liquidity and application scenarios.

0 2 Conclusion

From a higher perspective, the value narrative of Bitcoin (BTC) has undergone over a decade of development, and its function as a store of value is now widely recognized.

Regulatory policies, the launch of ETFs, and macroeconomic factors such as interest rate cuts have significantly impacted its market performance, indicating that Bitcoin is gradually becoming an important target for traditional institutional asset allocation.

As Bitcoin's value storage attributes gain widespread recognition in society, the financial products and innovations derived from it will become increasingly rich.

Although Layer 2 solutions may face scalability issues and challenges based on the UTXO mechanism should not be underestimated, the Bitcoin sector will continue to improve and develop, which is an inevitability for the industry and for societal progress.