Authors: flowie, ChainCatcher

Editors: Marco, ChainCatcher

After the craze of inscriptions, Bitcoin Layer2s are expected to take on the responsibility of promoting the prosperity of the Bitcoin ecosystem.

Currently, Bitcoin Layer2s are showing a momentum similar to the flourishing of Ethereum Layer2s, attracting a large number of entrepreneurs. In addition to the well-known Layer2 protocols such as Lightning Network, Liquid Network, and Stacks, the Bitcoin ecosystem has also seen the emergence of a large number of new projects claiming to be Bitcoin Layer2s, such as B² Network, BEVM, Dovi_L2, and Map Protocol.

Du Jun, co-founder of ABCDE Capital and Huobi, stated that he will personally invest $50 million in the construction of the Bitcoin ecosystem, with Bitcoin Layer2 being the preferred track.

Bitcoin Layer2s have also seen a financing boom and have gained favor from investors.

Recently, the Bitcoin Layer2 network Bitfinity completed a $7 million token financing at a valuation of $130 million, with participation from Polychain Capital and others.

Domo, the founder of Bounce Finance and Brc-20, participated in the angel round financing of Nubit, a Bitcoin data availability layer. Some crypto users see Nubit as the "Celestia" of the Bitcoin ecosystem.

After the creation of new asset issuance methods by inscriptions, how will Bitcoin Layer2s expand the functionality and ecosystem of the Bitcoin network beyond payments, and can they replicate the prosperity of Ethereum Layer2s?

ChainCatcher has systematically sorted out the current Bitcoin Layer2 solutions, representative projects, and their progress. The article is divided into two parts, with the first part "Bitcoin Layer2 Flourishing (Part 1): Overview of 6 Major Protocol Progress" introducing the progress of leading Bitcoin Layer2 protocols; this article is the second part, mainly outlining the overview of 20 early Bitcoin Layer2 projects.

20 Early Bitcoin Layer2 Projects Worth Paying Attention To

In mid-2023, Ethereum founder Vitalik suggested in a Twitter Space discussion about the Bitcoin ecosystem that Bitcoin should not only be used as a payment method, but also needs scaling solutions like Plasma or ZK Rollup. Optimism and Arbitrum are two successful Rollups that can serve as case studies for Bitcoin.

From some of the Bitcoin Layer2 projects that have emerged in the past two years, it is clear that many projects have adopted expansion solutions such as Rollup. At the same time, many projects also emphasize compatibility with EVM. In addition, there are some Bitcoin Layer2 projects that combine AI narratives.

1. Rollup

B² Network

Founded in 2022, B² Network is a Bitcoin Layer2 network based on ZK-Rollup, compatible with EVM, and capable of seamless deployment of DApps for EVM ecosystem developers.

B² Network participated in the November 2023 ABCDE Bitcoin ecosystem project roadshow and ultimately received investment. According to ABCDE, the core members of the B² Network technical team are active members of mainstream Web3 open source communities such as Ethereum, Bitcoin, Cosmos, and Sui, and have received multiple grants. The team is proficient in Web3 Infra products such as blockchain Layer1, Layer2, cross-chain, and account abstraction, with mature engineering capabilities.

On December 18, 2023, B² Network announced the launch of the Alpha testnet MYTICA for partners and openly recruited ecosystem developers. Partners and developers can deploy DApps on the B² Network testnet.

The cross-chain protocol Meson of the B² Network ecosystem has deployed the stablecoin USDC on the B² Network Alpha testnet. Meson is a cross-chain protocol that emphasizes speed, stability, security, and low fees, supporting the free circulation of mainstream digital assets such as ETH, BNB, USDC, and USDT between the B² Network and over 30 mainstream public chains.

On January 3, B² Network announced a $1 million donation plan to incentivize ecosystem builders.

BL2 (BL2T)

BL2 is a Bitcoin ZK-Rollup Layer2 based on the VM general protocol and the modular blockchain Celestia's DA layer, introducing ZK-Rollup to Bitcoin and implementing multi-node ZK verification on the Layer2 network, supporting inscription chain backup and cross-chain.

BL2 launched the BRC-20 token $BL2T, with a total supply of 21 million, used for BTC network L2 governance, with 20% used for fixed gas destruction. On January 8, BL2 conducted an IDO on Turtsat at a price of 30 Sats (approximately 0.013U).

Chainway

Founded in 2022, Chainway is a blockchain infrastructure company focused on Bitcoin, Ethereum, and zero-knowledge technology. Chainway has developed Bitcoin ZK Rollup, browser extension tool OrdinalSafe, and zk tool Proof of Innocence.

Chainway recently announced on its official social media that it plans to launch the Bitcoin ZK Rollup mainnet in 2024 and establish the Bitcoin ZK Rollup community.

Bison

Founded in 2023, Bison is a native zk-rollup for Bitcoin, which can improve transaction speed and implement advanced features on native Bitcoin. Developers can use zk-rollup to create innovative DeFi solutions such as trading platforms, lending services, and automated market makers.

Bison also participated in the ABCDE Bitcoin ecosystem project roadshow. According to the introduction, the Bison solution uses zero-knowledge proofs and Ordinals for fast and secure transactions. All data is anchored back to Bitcoin to enhance security. Bison can achieve 2,200 transactions per second at a cost of 1/36 of Bitcoin. The Bison team includes contributors to Starknet's own code.

Rollux

Founded in 2023, Rollux, developed by Layer1 blockchain Syscoin (SYS), is an Optimistic rollup equivalent to EVM, inheriting the mining network of Bitcoin and the security of Syscoin's Layer 1 data availability.

It is reported that Syscoin announced in June 2022 that it had received a $20 million ecological development fund from the cryptocurrency exchange MEXC.

Rollux launched its mainnet in June 2023 and plans to transition from Optimistic Rollup to ZK-based Rollup. Rollux has not yet introduced a new token and uses Syscoin as the Gas token.

BOB (Build On Bitcoin)

Founded in 2020, BOB is an EVM rollup stack with native Bitcoin support. It allows developers to build decentralized applications on top of Ordinals, Lightning, and Nostr.

BOB has launched a public testnet, which is currently running on the Sepolia Ethereum testnet. According to BOB's official roadmap, BOB will integrate Bitcoin's security through PoW re-staking and upgrade Optimistic Rollup to ZK proof in the future.

Hacash.com

Founded in 2022, Hacash.com proposes a solution that establishes state channels and implements multi-layer expansion, which is different from side chains and simple OP/ZK Roll-ups. Unlike bidirectional transfer side chains, Hacash's principle is to achieve one-way transfer of Bitcoin on Layer1, allowing Bitcoin to be transferred to the Hacash chain without changing the user's private key, and completing payment operations through state channels deployed on Layer2. The Hacash team has also proposed a Layer3 concept to achieve ecosystem expansion.

Hacash's Layer1 network has been running since 2019, still using PoW as the underlying consensus mechanism, and has a self-regulating supply system with HACD, BTC, and HAC as three PoW currencies to issue, distribute, and settle, addressing Bitcoin's lack of monetary properties. Layer2 is a channel chain for payment settlement, mainly used for large-scale payments, and is also the infrastructure for L3. Layer3 is used for multi-chain interaction and application ecosystem construction to support asset issuance, smart contract execution, and cross-chain data interaction.

Hacash.com's co-founder Ken You has published an article titled "ZK-Rollups Top Three Possibilities for Scaling Bitcoin," in which the team seems to have the intention of establishing a new chain using ZK Roll-up as an example.

BeL2

BeL2 is a Bitcoin Layer2 introduced by the Layer1 blockchain Elastos (ELA). It is a BTC Rollup that allows Bitcoin to execute smart contracts and irreversible digital protocols. These smart contracts can be fully defined, managed, tracked, and modified on Bitcoin without intermediaries. The network will also allow users to stake their Bitcoin and earn rewards when interacting with applications built on BeL2.

Elasto plans to announce partnerships and use cases in the fields of financial services, entertainment, and real-world assets (RWA) that support BeL2 in the coming months.

2. Bitcoin Sidechains

Libre (LIBRE)

Founded in 2022, Libre is a Bitcoin L2 sidechain dedicated to expanding Bitcoin's performance by improving its speed and availability.

Libre's mainnet went live on July 4, 2022, and shortly after the mainnet launch, Libre distributed 10 million LIBRE tokens, of which only 277,000 were claimed. In addition to the Layer2 blockchain, Libre also launched a test version of the BRC20 Dex and a mobile app for user-friendly inscription trading.

3. Bitcoin Data Availability Layer

Nubit

Founded in 2023, Nubit is the data availability layer of the Bitcoin ecosystem, aiming to change the way transactions are processed on the Bitcoin network. Its development team, Riema, has proposed BRC-1310, a specialized Bitcoin native data availability standard achieved through various advanced technologies, including Bitcoin native staking, data availability sampling, direct data proof on the Bitcoin network, and decentralized bridges.

On January 4, the Bitcoin Layer2 protocol Nubit announced that it had received angel round financing from Bounce Finance and Brc-20 founder domo.

4. Integration with AI

x.TAI

x.TAI is a Bitcoin Layer2 network based on AI encryption algorithms. In December 2023, x.TAI announced the launch of the xTAI Network, a second-layer inscription chain based on its XRC20 protocol, with the BRC20 inscription xtai serving as the governance token.

According to x.TAI's official Twitter, the details of xTAI Network were originally scheduled to be released on January 1, but x.TAI did not release them on time, and there is currently no specific new release schedule.

AiPTP (ATMT)

Founded in 2023, AiPTP is a decentralized AI network based on blockchain. AiPTP will build a dual L2 network for Bitcoin, including a Bitcoin L2 with a POS mechanism (tentatively named AIS) to support AiPTP's training models, and a Bitcoin L2 with a PoW mechanism (tentatively named AIW) to support AiPTP's inference models. Bitcoin and ATMT can be exchanged across the three chains, with ATMT using burn+mint for cross-chain circulation and Bitcoin using staking on Chain A to release to Chain B for cross-chain exchange.

5. Others

BEVM

Founded in 2023, BEVM is a decentralized Bitcoin Layer2 compatible with EVM. Based on the technological advancements brought by the Taproot upgrade, such as the Schnorr signature algorithm, BEVM allows BTC to cross-chain to the second layer in a decentralized manner. As BEVM is compatible with EVM, all DApps running in the Ethereum ecosystem can run on BTC Layer2 and use BTC as gas.

On November 29, 2023, BEVM released its whitepaper.

BEVM has launched the pilot network ChainX. The 2023 BEVM pilot network annual data shows a total transaction volume of 2.77 million, a total of 55,000 active addresses, a TVL of 119.56 BTC (approximately $5.09 million), and a total bridge capacity of $11.53 million for round-trip Ethereum L2. Recently, the BEVM pilot network launched the first inscription protocol Bevscriptions, processing 3 million transactions in 6 hours at around 150 tps.

In December 2023, the first phase of the Odyssey event was launched and has now ended. BEVM founder Gavin (@gguoss) stated that the second phase is expected to start on January 15 and will invite 10-20 ecosystem projects to participate. The second phase will not use the name "Odyssey" but will be named after the location where Satoshi Nakamoto mined the first BTC block, "Helsinki."

Currently, the BEVM ecosystem includes over 20 projects, including the BTC full-chain DEX OmniSwap and the decentralized signature protocol Bool Network.

Dovi (DOVI)

Founded in 2023, Dovi is a Bitcoin Layer2 compatible with EVM smart contracts. In November 2023, Dovi officially released its whitepaper, which integrates Schnorr signatures and MAST structures to enhance transaction privacy, optimize data size and verification processes, and provide a flexible framework for issuing various asset types outside of Bitcoin and achieving cross-chain asset transfers.

KuCoin Labs announced strategic investment in Dovi in December 2023, and its native token DOVI was listed on the KuCoin trading platform on December 12 of the same year. The distribution of Dovi protocol's token DOVI follows a fair release model, with all 15 million tokens being claimed within 4 hours. As of January 15, the fully diluted market value of DOVI is approximately $9.4 million. Users can currently stake DOVI on the official website to earn rewards.

Dovi's next step is to launch a testnet, establish a developer community and ecosystem support, and release Dovi V1.

ZeroSync

Founded in 2022, ZeroSync aims to expand Bitcoin through zero-knowledge proofs (ZK-Proofs, ZKP). Its main application is to enable almost real-time synchronization and verification of the blockchain for all nodes on Earth through the Blockstream satellite. At the end of 2023, ZeroSync team member @lucidLucky released the first chain state proof in space via the @Blockstream satellite.

ZeroSync is based on STARK proof and will use the Cairo language created by StarkWare. ZeroSync will be launched in three consecutive stages: header chain proof, assumed valid chain proof, and full chain proof, with the first two prototypes already completed. The ZeroSync Toolkit will also provide tools for Bitcoin developers to apply zero-knowledge proofs to their own products and services. It is reported that the development of ZeroSync has received sponsorship and support from StarkWare, OpenSats, Spiral, and geometry.

On October 9, 2023, Robin Linus, the project leader of ZeroSync, published a whitepaper titled "BitVM: Compute Anything On Bitcoin," sparking widespread discussions about enhancing the programmability of Bitcoin. BitVM, short for "Bitcoin Virtual Machine," aims to allow developers to run complex contracts on Bitcoin.

Map Protocol

MAP Protocol, founded in 2019, is a Bitcoin Layer2 for peer-to-peer cross-chain interoperability. The MAP protocol leverages Bitcoin's security mechanisms to allow assets and users from other public chains to seamlessly interact with the Bitcoin network, enhancing network security and enabling BRC20 cross-chain capabilities.

MAP Protocol recently announced strategic investments from DWF Labs and Waterdrip Capital.

It is known that MAP and MAPO are the native tokens of MAP Protocol, which are the same tokens but use different code symbols to distinguish the chains they belong to. On December 18, MAP Protocol announced a large-scale token burn, totaling 133,886,020 MAP/MAPO, accounting for 5.9% of the circulating supply. As of January 15, MAP's fully diluted market value is approximately $260 million.

Tectum

Tectum, founded in 2017, is a distributed ledger protocol management platform. Its ecosystem includes Tectum Blockchain, Tectum Wallet, Tectum Token (TET), Tectum SoftNote, and the 3FA identity authentication app.

Tectum SoftNote is a non-custodial Bitcoin Layer2 that can expand Bitcoin's transaction volume to hundreds of thousands or even over a million transactions per second.

The native token of Tectum is TFT, which can be used to mint SoftNote, pay reduced merchant fees, mint T12-20 standard project tokens, and access other Tectum/CrispMind products. Currently, TET has launched mainnet staking. As of January 15, TFT's fully diluted market value is $275 million.

Bitfinity

Bitfinity (formerly InfinitySwap), founded in 2021, is a Bitcoin Layer 2 network based on Internet Computer and EVM compatibility. Previously, InfinitySwap aimed to make BTC collateral mainstream through AMM and was referred to as the "Uniswap" of the Internet Computer (ICP) blockchain network.

Recently, Bitfinity completed a $7 million token financing at a valuation of $130 million, with participation from Polychain Capital, ParaFi Capital, Dokia Capital, and Draft Ventures. In 2021, Bitfinity also received a $1.5 million seed round financing from Polychain, a16z Crypto, Internet Computer, Dfinity, and Draft Ventures.

Bitfinity is currently in the testnet phase, and the mainnet launch date has not been announced.

BitBolt

BitBolt Network is a Bitcoin Layer2 network that utilizes account abstraction and threshold ECDSA technology, dedicated to Bitcoin payments and the Ordinals ecosystem. BitBolt allows users to conduct Bitcoin transactions at lightning speed while ensuring low transaction fees and the utilization of smart contract functionality. BitBolt Network has launched the Thunder test network.

In July 2023, BitBolt Network conducted an IDO, but the team later stated that the IDO did not reach the goal of raising 3 BTC, so they decided to refund the addresses that participated in the IDO.

DFS Network

DFS Network is a Bitcoin Layer2 that announced the launch of its mainnet on January 1 and started mining its mainnet token DFS on January 3. The initial version of the DFS Network mainnet is very simple, including Swap, liquidity mining, on-chain social circle, node voting, and mainstream BRC20 inscription cross-chain deposits and transactions.

According to official information, DFS is the mainnet token of DFS Network, which will be used for dex fee repurchase and destruction in addition to mainnet governance. The total supply of DFS is 10 million, with 1 million DFSN fairly distributed on the BTC chain and 2.5 million DFS fairly distributed on the EOS chain, which will be airdropped to DFS Network at a 1:1 ratio, and the remaining 6.5 million will be fairly released through liquidity mining. The relationship between DFSN and DFS is 1 DFS = 1 DFS, 1 DFSN = 1 DFS + 1 meme (BRC-20). 0.05% of the Swap fee will be used to burn DFS.

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