With the approval of the Bitcoin Spot ETF and the impact of Bitcoin block reward halving, an increasing number of Bitcoin Layer 2 solutions are emerging in the market. Many established blockchain projects are also shifting toward the development of BTC Layer 2 to improve blockchain processing capabilities, accelerate transaction speeds, and reduce costs while ensuring security. In addition to early solutions like the Lightning Network, which used state channels, and sidechain technologies like Stacks, new solutions such as BOB, Merlin, and Bitlayer have also proposed innovative methods to address these challenges.
Introduction to Bitlayer
Bitlayer is the first Bitcoin Layer 2 built on BitVM, aiming to provide the same level of security as the Bitcoin network, support smart contracts, and offer the speed and low cost characteristics of a Layer 2 solution. The main difference between Bitlayer and other Layer 2 solutions lies in its technology, including the introduction of BitVM and the DLC mechanism, among others.
Core Technologies
DLC (Discreet Log Contracts) is a special type of contract that utilizes innovative cryptographic techniques. These contracts are triggered by oracle data, and when executed on public blockchains, the specific conditions of the contract are not publicly revealed on the blockchain. Only the participants in the contract are aware of its contents and conditions. Furthermore, DLC uses cryptographic proofs generated by event outcomes, which are jointly verified by the participating parties. This reduces reliance on centralized oracles. DLC official Medium introduction
BitVM enhances Bitcoin’s computational capabilities by supporting mainstream virtual machines, including the Ethereum Virtual Machine (EVM). Future plans include supporting zero-knowledge proofs, CairoVM (compatible with Starknet), SolVM (compatible with Solana), and MoveVM (compatible with Sui and Aptos).
Dual Bridge Design — Ensuring Secure Asset Transfers from BTC Layer 1 to BTC Layer 2
Ensuring the security of assets moving from the Bitcoin mainnet to Layer 2 has been one of the biggest challenges in BTC Layer 2 design. A common practice for BTC Layer 2 is to move users’ assets into multi-signature accounts. However, users have gradually realized the risks associated with multi-signature accounts because their security depends on how the Layer 2 team assigns and manages keys, as well as the transparency of their operations. In contrast, the Bitlayer team combines DLC and BitVM technologies to enhance the control and security of assets. In Bitlayer’s design, assets are not only transferred via multi-signatures but also controlled by contract logic and execution conditions, providing better security and more control to users. For more details, see: whitepaper
Additionally, Bitlayer has a dual bridge design that allows users to select the most suitable transaction path based on their needs. The permissionless bridge using BitVM is suitable for fast-response transactions, while the OP-DLC Bitcoin mainnet bridge, though having asset unit limitations, emphasizes the security of contract execution, making it ideal for operations that require higher security.
Data Availability
Currently, Bitlayer utilizes Bitcoin to provide data availability (DA). To operate on the Bitcoin mainnet, submitted data is compressed and split into a form that meets Bitcoin’s on-chain requirements, after which it is reassembled on the Bitcoin mainnet. In the future, the team also plans to integrate data availability services like Celestia to ensure safety and decentralization.
Layer 1 Verification of Layer 2 State Changes
The effectiveness of Layer 2 state verification depends on the underlying chain used for verification. If verification occurs on the Bitcoin mainnet, it provides the highest level of security. Many Layer 2 solutions do not directly verify on the mainnet, but in Bitlayer’s design, all Layer 2 state changes must be verified on the Bitcoin mainnet to ensure the changes are secure and valid.
Combining Optimistic Execution with Zero-Knowledge Proofs
Bitlayer combines optimistic execution with zero-knowledge proofs to handle transaction processing. This process is executed off-chain and then verified on the Bitcoin mainnet using zero-knowledge proofs, ensuring both accelerated execution speed and security.
Through the integration of these innovative technologies, Bitlayer not only achieves the goals of a Layer 2 solution by improving transaction speed and reducing costs but also sets new standards in asset protection and expanding Bitcoin’s functionality.
Bitlayer Roadmap
Phase 1 Mainnet – V1 (Launch on April 15, Assets can be Cross-Chain to Bitlayer)
Mainnet V1 focuses on building the infrastructure to support BTC/BRC-20 assets and other mainstream assets, enabling these assets to flow between the Bitcoin mainnet and Bitlayer via cross-chain transactions.
The initial focus will be on the EVM ecosystem, incentivizing EVM-based applications to build on Bitlayer.
Phase 2 Mainnet – V2 (Expected Launch in Q3 2024)
In this phase, Sequencer + DA (Data Availability) mode will be introduced to increase asset security.
Multi-signature will be used for challenge games, and BitVM-based DLC-Attestors will be introduced for “forced withdrawals.”
Phase 3 Mainnet – V3 (Expected Launch in Q2 2025)
BitVM technology will be implemented, enabling full compatibility with various virtual machines.
Users will be able to initiate OP (Optimistic) challenges to protect their rights, and DLC-Attestors will automatically execute forced withdrawals, further enhancing asset security.
Funding News and Founding Team Introduction
Bitlayer previously announced that it raised $5 million in a seed round, led by Framework Ventures and ABCDE Capital, with a valuation of $80 million. StarkWare, OX Ventures, Alliance DAO, UTXO Management, and Ametry Capital also participated in the funding.
The team members have extensive backgrounds, including Kevin, who was the technical lead for the HECO chain at Huobi Group; Charlie, who has experience with public blockchains such as Polkadot, Polygon, and Tezos; and Lynndell, a cryptography expert with a PhD, who has published over 10 international papers and holds more than 20 patents. The team’s expertise in public chains, combined with years of cryptographic research experience, forms the foundation for Bitlayer’s technological innovation.
Bitlayer’s First Official NFT Lucky Helmet Event + Ecosystem Development Bonus
Bitlayer has partnered with multiple ecosystems and launched the “Ready Player One” ecosystem incentive program, offering a total prize pool of $50 million. The program encourages more EVM projects to build on Bitlayer. According to the latest data, over 300 teams have registered. Bitlayer has also established an accelerator to support outstanding teams.
Users can participate in the “Ready Player One” team voting via the official website. Each user has three chances to vote daily to earn event points. The event rewards include:
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Event points can be redeemed for Bitlayer points in proportion.
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50 NFT whitelist spots will be randomly selected from participants in the voting process, and an additional 50 lucky users will receive an NFT airdrop. The event has ended.
To celebrate the mainnet launch, Bitlayer has issued its first official Ordinals NFT — the Lucky Helmet. A total of 5,000 units are available, and they are already tradable on secondary markets. In the future, these NFTs may offer benefits such as governance rights, airdrop opportunities, future event point bonuses, and more. They could also unlock rewards from other Bitlayer ecosystem projects.
Reference Materials
BitVM And Its Optimization Considerations
Bitlayer Announces Launch of $50M Ecosystem Incentive Program
RootData