Is it fake demand or the real summer? The new Bitcoin L2 project tells you the truth

Author: Meta Era

Speaking of the second-layer network of the public chain, perhaps more people are actually participating in the second-layer network of Ethereum (abbreviated as Layer2). For example, Ethereum's Layer2 projects Arbitrum, Optimism, zkSync, and Stark have successively released tokens, and some are happy and some are sad. However, Layer2 is not exclusive to the Ethereum ecosystem, and Bitcoin Layer2 is more intensively cultivated.

Why do we need Layer2?

After the emergence of blockchain, whether it is the early Bitcoin network or the Ethereum network, at the beginning of the design, although the advantages of peer-to-peer payment system or smart contracts allowed blockchain technology to develop rapidly, the problems of slow on-chain speed and miner gas fees were also more prominent, and this is the defect of Layer1.

In order to improve or even solve the problems existing in Layer1, Layer2 related technologies and projects came into being. In general, Layer2 is an independent blockchain network built on Layer1. The purpose is to package most of Layer1's transactions to Layer2 to reduce pressure and expand capacity.

In the early days of blockchain development, decentralization, security and scalability formed an impossible triangle. Although this impossible triangle cannot be broken, the complementary Layer1 and Layer2 also allow decentralization, security and scalability to be achieved at different layers of the same network.

The development path of Bitcoin Layer2

First, let's pay attention to why we should pay attention to Bitcoin Layer2 again in 2024. At a time when Ethereum issued coins through smart contracts and DeFi led to a truly prosperous ecosystem, the Bitcoin ecosystem was slightly quiet. This is a different time. Starting from 2023, with the rise of BRC20, Atomical, Runes and other protocols, inscriptions such as ORDI and SATS, which are popular in the market, and well-known NFTs such as BitFrog and Runestone, were born.

And behind every phenomenal token/NFT is a large-scale Gas War. After a period of development, there are indeed more and more assets on Bitcoin. Although BRC20 and Ordinals protocols allow users and investors to see the huge potential and gameplay of the Bitcoin network, due to the lack of support for smart contracts, the Bitcoin network cannot expand more meaningful application scenarios with inscriptions or NFTs alone.

So as a developer, perhaps in 2023 and 2024, there will be a more urgent mentality to build the Layer2 infrastructure and network belonging to the Bitcoin network. As the saying goes, "Good food is not afraid of being late", the construction of Bitcoin Layer2 has already begun, and the following will sort out its development path.

In December 2015, Bitcoin Core developer, Ciphrecx CTO Eric Lombrozo, Bitcoin technology enthusiast Johnson Lau and BlockStream co-founder Pieter Wuille jointly proposed the Bitcoin expansion improvement proposal-SegWit, namely BIP141. The upgrade was implemented in 2017 and introduced as a soft fork of the Bitcoin network. One of the most significant advantages brought by the SegWit upgrade is the increase in block capacity.

In January 2018, Bitcoin Core developer Greg Maxwell released the Taproot proposal. Taproot is a major upgrade since SegWit, designed to improve privacy, simplify transaction verification and increase efficiency and more complex smart contract processing capabilities.

It is with these two extremely important updates that Bitcoin Layer2 has a foundation for development. The mainstream solutions are mainly divided into state channels, sidechains, Rollup, PoS expansion, etc.

List of New Bitcoin Layer2 Projects

Merlin Chain

Merlin Chain is a Bitcoin Layer 2 solution developed by the team behind Bitmap Tech (formerly known as Recursiverse). Merlin Chain focuses on leveraging Bitcoin's unique properties and aims to unlock its untapped potential. Technically, Merlin Chain integrates zero-knowledge proofs, decentralized oracles, and on-chain BTC fraud prevention modules to support Bitcoin native assets, users, and protocols.

At the same time, the introduction of $MERL tokens provides a mechanism for Merlin Chain, through which community members can directly participate in the governance and development of the network, and also provides an economic incentive to promote the participation of users and developers.

However, recently, after the release of Merlin Chain tokens, the BTC unstaking function was opened, but the operation came late, causing some users to suffer heavy losses. In addition, the number of active users of Merlin ecological projects has been halved, the community has been attacked by hackers, user confidence has been frustrated, and Chain's TVL has fallen to US$2.4 billion.

Official website: https://merlinchain.io/

B² Network

B² Network is the leading Layer 2 project on BTC and an EVM-compatible ZK Rollup. Rollup data and ZK proof verification commitments are recorded on the BTC network and ultimately confirmed through a challenge response mechanism. The project adopts a modular design architecture, including a Rollup layer and a data availability (DA) layer, namely the B² Hub. Ingeniously, the use of zk rollup significantly reduces transaction fees, and combined with a method similar to fraud proofs, the zk commitment proof accepts user challenges, thereby solving the limitation of BTC's first layer that cannot verify contracts.

It ensures security through Babylon's staking and timestamp protocols, effectively avoiding remote attacks. Recently, it also announced a collaboration with Polygon Labs to create the first BTC use case integrated with Polygon CDK, which means that in the future, developers can choose the "Polygon CDK + B² Hub" combination to initiate their own BTC rollup.

Official website: https://www.bsquared.network/

AILayer

AILayer is the first L2 project to add the concept of AI to the Bitcoin Layer. It is officially defined as a Bitcoin second-layer network that adopts Web 3.0 + AI applications and supports the Rune Protocol. It is also the only project in the AI ​​narrative that develops BTC Layer2. Under the halo of AI blessing, AILayer is also the first BTC Layer2 to support inscriptions and rune innovative assets at the Bitcoin Layer2 level. The pledged funds support pledge and withdrawal at any time, which is more flexible and convenient for users to operate. The latest official website data shows that the number of on-chain users of the main network has reached nearly one million, and the TVL exceeds 700 million US dollars.

Among them, staking AILayer's tokens can become PoS verification nodes. Many Pos verification nodes will be responsible for maintaining the stable operation of the second-layer network and normal block production, thereby obtaining continuous block production rewards. At the same time, in terms of AI, AILayer provides a decentralized artificial intelligence infrastructure, providing developers and enterprises with technology, tools and resources for building and deploying decentralized AI applications.

In terms of strategic cooperation, AILayer signed a strategic cooperation agreement with the Ministry of Digital Development of Kyrgyzstan, becoming the world's third Web 3.0 project to sign a contract with a national government in Central Asia after Binance and Tether.

In terms of ecosystem development, more than 100 ecosystem applications and developers have joined AILayer. The AI ​​Odyssey event, which will be launched on the mainnet, and the developer incentive program dedicated to ecosystem construction will also be launched soon.

Recently, AILayer and BitFi announced the launch of their first joint airdrop event. Participants will have the opportunity to obtain an exclusive BitFi OG pass and enjoy multiple exclusive incentives such as BitFi airdrops and AILayer TVL points. In addition, AILayer is now connected to the OKX Web3 wallet. Users can stake AILayer, earn points, and more through the OKX Web3 wallet.

Official website: https://AILayer.xyz/

Bitlayer

Bitlayer is the first Bitcoin security equivalent and Turing-complete Bitcoin Layer2 built on the BitVM paradigm, aiming to bring secure scalability to the Bitcoin ecosystem, promote asset diversity and stimulate innovation to provide a faster, safer and more flexible user experience.

Compared to other Bitcoin Layer2 projects, Bitlayer's main technical innovation lies in the use of the latest BitVM computing paradigm and OP-DLC bridge to build a dual-channel bidirectional locked asset bridge, thereby achieving security equal to the first layer of Bitcoin.

The latest data from the official website shows that the current total locked value (TVL) on the Bitlayer chain has exceeded US$500 million. Nearly 100 ecological projects have been deployed to Bitlayer, and the number of active transactions on its chain has exceeded 1 million, making it the fastest growing Bitcoin Layer 2 in the ecosystem. In terms of market operation activities, Bitlayer held two first mining festivals, providing users with multiple project token airdrop rewards, as well as more opportunities to obtain generous rewards.

Official website: https://www.bitlayer.org/

BEVM

BEVM is a fully decentralized BTC Layer2 project that uses BTC as GAS and is compatible with EVM. Its core goal is to expand Bitcoin's smart contract scenarios, allowing BTC to break through the constraints of Bitcoin's non-Turing completeness and lack of support for smart contracts, so that BTC can build decentralized applications with BTC as the native GAS on the BEVM Layer2.

Based on the Schnorr signature and Mast contract brought by the Taproot upgrade, decentralized BTC cross-chain is realized with 1000+ Bitcoin light nodes, allowing BTC to flow freely between L1 and L2 without trust. At the same time, the BEVM network uses BTC as GAS and is compatible with EVM.

Recently, in order to better connect the Ethereum and Bitcoin ecosystems, the BEVM team is building a relay chain based on OPtimism's OP Stack that uses WBTC as GAS and is compatible with OP-Rollup. This relay chain will serve as a completely decentralized middle layer to introduce mainstream assets on Ethereum (WBTC/ETH/USDC/USDT, etc.) into the BEVM network.

Official website: https://www.bevm.io/

Written at the end

From the above representative projects, it can be seen that Bitcoin Layer2 does not appear to be homogenous. Although most of them use relatively mature Layer2 technologies such as EVM, Rollup, and cross-chain compatibility, the focus of the projects is different. For example, BEVM focuses on cross-chain experience, Merlin Chain has created a new paradigm for staking, and AILayer has encountered and seized the AI ​​trend, deeply integrated with artificial intelligence, and brought more AI application solutions.

The original intention of Bitcoin Layer2 was to indirectly break the impossible triangle, but with the catalysis of various events and the changes of the times, it has been given more meaning, attracting more attention from other public chains to jointly build a prosperous Bitcoin ecosystem. Will Bitcoin Layer2 have a midsummer like Ethereum Layer2? Perhaps it is just a matter of time, and it still needs a fuse to ignite.