Author: William M. Peaster, Bankless; Compiled by: Deng Tong, Golden Finance
With Bitcoin hitting all-time highs, now is the time to take a closer look at what could help reignite interest in the asset Investment narrative one: Bitcoin L2.
Bitcoin is the oldest blockchain and certainly the most proven cryptocurrency. Is this the biggest drawback? Transactions are slow and expensive, especially during periods of high trading activity. The Lightning Network, a payment channel protocol in the Bitcoin scaling scenario, is a serious and interesting endeavor but has so far failed to achieve breakthrough traction due to user experience and liquidity issues.
That said, the arrival of Ordinal NFTs in January 2023 sparked a huge resurgence of interest in building Bitcoin, a resurgence that led to a resurgence of existing scaling efforts like Stacks and also led to adoption A flourishing of new efforts in a range of different approaches.
One of the next big frontiers in cryptocurrency is therefore the newly resurgent Bitcoin Layer 2 scene, so let us take you through some of the emerging contenders aiming to improve Bitcoin’s capabilities.
Here are 8 Bitcoin L2 projects you should know about.
Bison Network, developed by Bison Labs, is a zero-knowledge (zk) rollup solution using ZK-STARK technology. It is designed to significantly increase transaction throughput, reduce fees, and integrate smart contract functionality around BTC.
By leveraging Ordinals for data storage, Bison ensures that all transactions and smart contracts are as secure and immutable as the underlying Bitcoin blockchain. Its infrastructure includes Bison OS for managing transactions and token contracts and Bison Prover for generating zero-knowledge proofs.
This setup paves the way for more Bitcoin DeFi experimentation and allows users to independently verify transactions quickly and efficiently.
Stacks stands out in the Bitcoin L2 scene for its unique approach to extending the functionality of Bitcoin, primarily by integrating smart contracts directly on top of Bitcoin. It uses a unique consensus mechanism called Proof of Transfer (PoX), which fundamentally ties its operation and security directly to Bitcoin.
One of the key features that sets Stacks apart is how users can earn BTC by staking STX tokens. This approach not only incentivizes participation in the Stacks ecosystem, but also strengthens the bridge between Stacks and Bitcoin, enhancing the value proposition of both networks.
The upcoming Satoshi upgrade will further solidify Stacks' position by fully inheriting Bitcoin's security by turning it into a proper L2. The upgrade will also introduce faster block generation times on the stack, independent of Bitcoin’s block times, while still achieving 100% Bitcoin finality. This means that once a transaction is confirmed on Stacks, it will inherit the same level of irreversibility as a Bitcoin transaction.
BitVM introduces a new approach to Bitcoin smart contracts without changing Bitcoin’s existing rules. This system allows verification on Bitcoin rather than performing computations, similar to the concept of optimistic rollups on Ethereum.
The core of BitVM uses a unique system of hash locks, time locks, and a large taproot tree to perform general-purpose calculations. This design allows for offline execution of programs with a minimal on-chain footprint, requiring on-chain operations only in the event of a dispute.
While BitVM is still in its infancy, its potential to implement advanced features such as Bitcoin sidechain two-way pegs and rollups suggests it is a way to scale the OG blockchain without the need for soft forks A promising approach to functionality.
Botanix Labs pioneered the spider chain design, a new L2 format that allows seamless integration with Bitcoin without changing the Bitcoin base layer Two-way hook side chain. The ongoing Botanix protocol is the first implementation of this novel approach and integrates with the Ethereum Virtual Machine (EVM) to bridge the gap between Bitcoin’s robustness and Ethereum’s versatile smart contract ecosystem.
The core of the Spider Chain design concept is a coordinator network that manages multi-signature wallets, facilitating the transfer in and out process between Bitcoin and the Spider Chain. These orchestrators run both Bitcoin nodes and Spider Chain nodes, and the orchestrators are selected in a random manner based on Bitcoin block hashes to ensure fair and secure operations.
Chainway is another rising force in the Bitcoin L2 space, backed by prominent venture capital firms such as Galaxy Digital and Delphi Ventures. The team released the BitcoinDA data availability adapter for connecting rollups to Bitcoin, and they also started work on Citrea, a zk-rollup solution that uses BitVM to write its proofs into Bitcoin.
Citrea is designed as Bitcoin's "Type 2 zkEVM" and uses zero-knowledge proofs to batch transactions and then ensure validity through concise proofs. This approach allows anyone running a Bitcoin node to easily verify and access the full state of Citrea. Citrea uses $BTC as its native token ($cBTC within Citrea) and will provide wider trading capabilities for the OG cryptocurrency.
Kasar Labs is a Starknet engineering and research team working on integrating Starknet's zk-rollup functionality with Bitcoin. Recently, they partnered with Taproot Wizards to launch a data availability adapter that allows developers to anchor Rollup to Bitcoin.
Kasar’s work will also necessarily include Barknet, a new Bitcoin rollup that leverages Starknet’s Madara sequencer and Cairo VM to harness the power of Starknet’s advanced cryptographic proofs.
Merlin Chain is another EVM-compatible zk-rollup game built as L2 by the Bitmap Tech team that can extend a range of different Bitcoin native protocols, Includes Atomics, Bitmaps, BRC-20s, Stamps, and more. Merlin Chain recently launched its mainnet and launched a staking campaign aimed at a fair distribution of the upcoming $MERL governance token. As a result, Merlin Chain added $2 billion in TVL as of February 9th.
Ark is a novel L2 designed to enhance Bitcoin’s transaction scalability. Unlike traditional approaches that rely on state channels or rollups, Ark introduces a unique approach with its virtual transaction outputs (VTXOs) that allow anonymous, off-chain payments. These VTXOs must be used or "refreshed" within four weeks to prevent expiration.
Ark at its core facilitates transactions through untrusted intermediaries called Ark Service Providers (ASPs), which are always-on servers that provide liquidity, much like Lightning Network services provide The same as the merchants, but users are not required to manage liquidity by themselves. This setup enables users to send and receive payments anonymously, protecting their privacy without the complexity of an onboarding setup like obtaining inbound liquidity.
Key to Ark’s operation is a process called “boosting” that allows users to convert on-chain UTXOs into off-chain VTXOs in a trustless manner. Additionally, Ark’s design allows transactions to be conducted without a direct link between sender and receiver, significantly reducing the on-chain footprint compared to traditional methods such as the Lightning Network.
Today, Bitcoin has a market capitalization of over $1.3 trillion, but due to programmability and scalability limitations, most of the money on the network is currently Still idle.
The newer Bitcoin L2 ecosystem is emerging as a strategic solution to these limitations and has been reborn due to the rise of Ordinals and the growing inspiration of Ethereum’s increasingly layered architecture.
This L2 evolution, coupled with growing institutional interest from the first U.S. spot Bitcoin ETF, sets the stage for a resurgence in Bitcoin adoption. As these developments unfold, Bitcoin is poised to transform from a primarily passive store of value to an active, programmable cryptocurrency, a transition that could redefine its role in the broader cryptoeconomy and open the door to innovation and growth. New horizons!
In the long run, I think the future of Ethereum will be a combination of "L1 blockchain + L2 system equivalent to L1 trustless" (hereinafter referred to as "L1+L2"), especially when ZK Rollup solves the problem of general intelligence After contract platform technology.
JinseFinanceJinseFinanceJinseFinanceThis is the last phase before the public launch in early August that will aim to amass more builders.
cryptopotatoCoinbase said the layer-2 is still building toward its “genesis window,” with mainnet launch on the horizon
BlockworksCoinbase, the second largest crypto exchange, has recently launched a testnet for their newest product "Base," an Ethereum layer 2 (L2) network.
BitcoinistThe flagship hot wallet, MetaMask, is adding network and bridge support for two new major networks this week, according to an official announcement on Wednesday.
BitcoinistEthereum’s layer 2 scaling platforms took center stage in the network’s 2022 chapter.
cryptopotatoSustainability can be simply defined as the protocol staying online, resilient to attacks, and usable under all conditions. It also needs to be relevant and keep up with contemporary needs, so to speak.
CointelegraphThere are currently 38 projects deployed on the Ethereum layer-2 network. More are expected as attention shifts to scalability.
Cointelegraph