Taking stock of emerging Bitcoin L2 projects compatible with EVM

Author: Samuel Haig, Defiant; Translation: Golden Finance xiaozou

With the launch of the Bitcoin spot exchange-traded fund (ETF), Bitcoin has recently dominated major news headlines, and its popularity remains high. , but critics say the network has failed to keep pace with innovation in the broader web3 ecosystem.

However, a number of emerging projects are building Bitcoin L2 networks that are compatible with Ethereum Virtual Machine (EVM) smart contracts to extend the utility of Bitcoin beyond payments.

The L2 network is built on the existing L1 blockchain, using L1 to achieve transaction finality and security. Ethereum's L2 ecosystem has developed rapidly in recent years, providing low-cost transactions while inheriting the security of the consensus layer of the Ethereum mainnet. According to data from L2beat, the current total value locked (TVL) of Ethereum L2 is $21.1 billion.

1, Conflux announced Bitcoin L2 plan

January 18, Conflux Layer 1Network development team became the latest project to join the fray, announcing plans to launch EVM-compatible Bitcoin L2 in May after deploying a test network in February or March.

BTC will become L2’s native gas token, and BTC holders can also pledge BTC to participate in its Proof of Stake (PoS) consensus and governance mechanism.

Smart contracts deployed on the network can also access events on the Bitcoin blockchain. Conflux said the network will bring DeFi utility to Bitcoin-based assets such as Inscription tokens.

“The introduction of EVM-compatible Bitcoin L2 solutions on Conflux opens up a wide range of possibilities for blockchain developers and innovators,” Conflux said. “Developers can now build decentralized applications that interact seamlessly with all three domains, unlocking new cross-chain functionality opportunities and creating a more connected blockchain landscape.”

< strong>2, Bitfinity Completed Financing

On January 10, Bitfinity announced that it had passed a round of financing before the launch of its mainnet (at the end of January or early February). The token sale successfully raised $6 million.

Bitfinity also plans to launch an EVM-compatible Bitcoin L2 based on the Dfinity Foundation's Internet Computer Protocol. Bitfinity wants to build a DeFi ecosystem with the security of Bitcoin.

Previously, Bitfinity completed a US$1 million seed round of financing in 2021. Participating institutions included Polychain Capital and ParaFi Capital, and Bitfinity’s valuation was increased to US$130 million. The latest round of financing ended in June, and the Bitfinity team did not make an immediate announcement. The news of this round of financing was not announced until just a few weeks before the project's mainnet was launched.

3, Botanix celebrates testnet deployment

On November 29, Botanix announced that after a year of research and development, it has Launched the first “EVM equivalent” Bitcoin L2 on the test network. Botanix also launched an accelerator program to support 10 projects building Botanix-based dApps.

“In a multi-chain world, it is clear that EVM is the virtual machine leader – not just for Ethereum, but widely used on any blockchain,” Willem Schroe, founder of Botanix Labs said. “EVM’s tools, support, and vibrant developer community make it a natural aggregator for programmability.”

On January 19, Botanix revealed that it is working on EVM applications that want to build on Bitcoin. The program's developers organize a hackathon.

4, SatoshiVM was accused of“running away”

However, there is one project in the fledgling Bitcoin EVM L2 ecosystem that is causing controversy.

The team at SatoshiVM, a Bitcoin L2 rollup that uses the EVM for off-chain computing, has come under fire for allegedly dumping seven figures worth of tokens from a developer-controlled wallet.

On January 20, 1.21 million SAVM tokens (equivalent to 11.5% of the token supply) were distributed to 200 addresses, several of which were related to influential celebrities. Previously, many celebrities said that SatoshiVM may airdrop tokens to testnet participants after the testnet is deployed on January 13.

The project also launched an Initial Liquidity Offering (ILO) through Bounce Finance for token distribution, raising concerns that ILO participants could be exploited to exit liquidity. The funds were subsequently transferred to a multi-signature account controlled by Bounce and SatoshiVM to calm concerns.

On January 19, SatoshiVM stated that SAVM had been listed on Uniswap. SAVM’s price has increased by 69.5% since listing on CoinGecko on January 19, but has fallen by 28.5% since hitting a local high of $14 yesterday.

Lookonchain, a well-known on-chain analyst, pointed out that a wallet of the SatoshiVM team sold tokens worth more than $1 million on January 22.

Zachxbt, a well-known web3 commentator, said on Twitter: "Remember, when celebrities with large followings start pumping up a project at the same time, the reason is most likely because they get token distribution, so they Will dump their cheap tokens on you."

5, Other Projects Bringing Smart Contracts to Bitcoin

Although there has been a lot of publicity recently Hype, but the upcoming EVM-compatible Bitcoin L2s are not the first projects to bring smart contract functionality to Bitcoin.

The Rootstock sidechain was released in 2018, enabling smart contract deployment through its Rootstock virtual machine (EVM fork). Last month, GFX Labs released a fork of Uniswap v3 — Oku — on the network. According to data from DeFi Llama, Rootstock currently has a total locked value of $130 million.

In January 2021, Stacks also launched its own "Layer 1.5" network, providing smart contract execution through its Clarity virtual machine. Stacks' current TVL is $51.2 million.