The Top Bitcoin L2 Platforms, Part 2

We know you’re still fading the Bitcoin ecosystem, here’s why you shouldn’t

Author

M6 Labs
April 24, 2024

GM anon!

Today, we're diving into the second part of our Bitcoin L2 platforms series! If you missed the last installment, catch up here, and if you haven't checked out our deep dive into Bitcoin DeFi, find it here.

Now, you might be wondering, why all this info bombardment lately? Do we just enjoy overwhelming you with links? Absolutely not! We're guiding you to Aladdin's Cave of Opportunity, anon🧞 

But what's the point? How can you leverage this information to make your 100x?

We keep hammering on about Bitcoin because it's the alpha! 🪙

Many newcomers to crypto expect alpha to be handed to them in a single tweet or piece of info that will skyrocket a coin overnight. Sure, it can happen with a lot of luck, but more often than not, the most successful traders in crypto know where to shine the torch to illuminate the cave of opportunity.

What do we mean by that? 💭

Think about it. The game is a hundred times harder than it was in previous bull markets. Liquidity is fragmented across multiple ecosystems, chains, and narratives. 

Are the old trusted projects and protocols you invested in last time performing as well as any of the newcomers? Nowhere near!

You need to spot problems and clunky areas in crypto, then be among the first, or one of a few hundred thousand, to that field and maximize the potential.

Do you think you'll make a 100x buying Arb or Op at this point? Not gonna happen, maybe a decent 3-5x.

You need to venture into unexplored realms. 🧭 

So, let's break this down, because we like to look at the numbers on the polls and the analytics behind each topic we cover. Many of you don't seem to like or understand Bitcoin.

The argument: 🤔

  • Bitcoin has the most liquidity.

  • Bitcoin has clunky tech, which is currently being addressed by dozens of protocols and developers.

Liquidity + problems = opportunity.

Don't underestimate this tech, anon .

Spend your Saturday nights clicking around and familiarizing yourself with all this tech, and the gates to Valhalla will open.

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Now, that was a long intro, but we had to recalibrate after the recent flurry of information 🍽️

What’s a Bitcoin L2 Again?

  • Bitcoin L2 solutions are secondary networks built on top of the main Bitcoin blockchain to address its scalability issues while preserving decentralization and security. 

  • They facilitate faster and cheaper transactions by processing them off-chain and then settling them on the main blockchain. 

  • Layer 2 solutions include state channels, rollup chains, and sidechains.

  •  Examples of Bitcoin Layer 2 networks include the Lightning Network, Rootstock (RSK), Stacks Protocol, and Liquid Network. 

  • While these solutions offer increased scalability and usability, they also introduce new risks and challenges, such as centralization and security vulnerabilities. 

  • Overall, Bitcoin L2s provide a promising avenue for expanding the functionality and adoption of Bitcoin.

Having gained some insight into Bitcoin L2s, we’ve curated a list of projects that are innovating the future of Bitcoin. 🔮👇

Rootstock operates as the pioneering open-source smart contract platform built on the Bitcoin network, aiming to augment the Bitcoin ecosystem by introducing smart contracts, near-instant payments, and enhanced scalability. 

It fosters interoperability with the Ethereum Virtual Machine (EVM), allowing for seamless deployment of Ethereum smart contracts on the Rootstock blockchain. 

Through its uncensorable Bitcoin peg, users can seamlessly convert Bitcoin to Smart BTC (RBTC) and vice versa, facilitating easy access to Rootstock's ecosystem.

The B² Network stands as a Layer-2 solution geared towards enhancing transaction speed and application diversity while prioritizing security. Leveraging zero-knowledge proof verification commitments and rollup technology, B² Network executes Turing-complete smart contracts for off-chain transactions, promoting efficiency and cost reduction. 

With its EVM compatibility and innovative consensus mechanisms, it paves the way for DeFi, NFTs, and other decentralized systems, aligning with Bitcoin's core principles while driving forward the digital asset landscape. 

By utilizing a novel approach to transactional privacy and security, the B² Network ensures that users can engage in decentralized activities with confidence, without sacrificing the robust security features inherent to the Bitcoin network.

Mintlayer operates as a Proof of Stake blockchain functioning as a Bitcoin sidechain, offering direct BTC interoperability through Atomic Swaps. It simplifies tokenization and facilitates DeFi activities without requiring wrapped Bitcoin or smart contract languages like Solidity. 

Mintlayer's Proof of Stake consensus protocol enhances existing protocols, promoting network scalability and decentralization. By storing Bitcoin state and offering multi-token gas fees, it provides flexibility and efficiency, positioning itself as a significant contributor to the future of DeFi on Bitcoin. 

Mintlayer's unique approach to consensus and governance ensures that it remains adaptable to the evolving needs of its user base, fostering a community-driven ecosystem that empowers users to participate in the financial systems of tomorrow.

Bison Network introduces a cutting-edge ZK-STARK rollup solution on the Bitcoin blockchain, revolutionizing transaction speed, security, and decentralization. By bringing smart contracts and programmability to Bitcoin, Bison Labs expands the blockchain's utility, fostering innovation and community development. 

With BTC as gas fees and self-verification capabilities, Bison Network pioneers a sovereign-style blockchain framework, enabling DeFi on Bitcoin and advancing the landscape of native Bitcoin transactions. 

Bison Labs' commitment to user sovereignty and decentralization ensures that users have full control over their assets and transactions, creating a platform that is both secure and user-friendly. Through its innovative technology and community-focused approach, Bison Labs is poised to play a pivotal role in shaping the future of decentralized finance on Bitcoin.

Dovi stands out as a community-driven Bitcoin Layer 2 solution, prioritizing scalability, reduced fees, and heightened security within the financial ecosystem. Functioning as an EVM-compatible smart contract platform, Dovi streamlines transaction processing, lowers network fees, and fortifies consensus mechanisms, all while bolstering scalability through its second-layer network infrastructure. 

By integrating Schnorr signatures, Dovi enhances transactional privacy and efficiency, paving the way for more discreet and streamlined multi-signature transactions. Moreover, its support for diverse asset types, including BRC20 and ARC20 tokens, facilitates seamless cross-chain asset transfers, fostering greater flexibility and interoperability within the ecosystem.

U Protocol emerges as a trailblazing force in BitcoinFi, operating across Layer 2s and Solana through its flagship product, uBTC. As a Decentralized Omnichain BitcoinFi Protocol, U Protocol harnesses Bitcoin's value as non-sovereign money, extending its utility across diverse blockchain ecosystems. 

At its core lies uBTC, a decentralized Bitcoin for L2s backed by Lido’s Wrapped Staked Ether and BTC.b. Utilizing LayerZero's technology, uBTC seamlessly integrates across multiple blockchain networks, spearheading DeFi initiatives and expanding its ecosystem with additional BitcoinFi products and services. 

Through its EVM compatibility and innovative decentralized BTC Layer 3, U Protocol ensures interoperability and scalability, paving the way for a permissionless infrastructure that fosters community-driven innovation.

The Rosetta Network represents a pioneering Bitcoin L2 Inscription Network, addressing challenges inherent in the Inscription and BRC-20 protocol to enhance verifiability, interoperability, and practical utility. 

Structured into four layers—Bitcoin Layer, Inscription Layer, BRC Layer, and Application Layer—Rosetta ensures permanent data storage for the Inscription and BRC-20 protocol through the robust Bitcoin network. 

By introducing decentralized data indexers and enabling EVM compatibility, Rosetta strengthens consensus frameworks, facilitates cross-chain interoperability, and fosters an application ecosystem around BRC-20 tokens.

Naka Chain emerges as a Layer 2 blockchain solution tailored to enhance the Bitcoin ecosystem by enabling DeFi applications directly on Bitcoin. With its rapid block time of just 2 seconds and nominal transaction fees, Naka Chain addresses Bitcoin's scalability limitations, particularly in DeFi contexts. 

Leveraging a modular architecture and the Bitcoin Virtual Machine (BVM), Naka Chain enhances transaction throughput and efficiency, fostering a permissionless environment for developers to innovate.

Its support for a variety of DeFi use cases, including token swaps, futures trading, staking, and launchpads, underscores its commitment to expanding the utility and reach of Bitcoin in the global financial landscape. Naka Chain's comprehensive suite of services not only enriches Bitcoin's functionality but also attracts a diverse array of users and developers, driving adoption and innovation within the ecosystem.

Stacks is a pioneering Bitcoin L2 solution that empowers developers to utilize Bitcoin as a secure foundation for applications and smart contracts. By accelerating Bitcoin's scalability and programmability through fast block times, Bitcoin-finality, and seamless decentralized BTC deposits and withdrawals, Stacks activates the Bitcoin economy without modifying the Bitcoin L1. 

As a Bitcoin layer for smart contracts, Stacks introduces several innovations. These include Proof-of-Transfer Consensus, where all transactions on Stacks settle to Bitcoin, leveraging Bitcoin’s security without altering the Bitcoin L1. 

Additionally, Stacks employs the Clarity programming language for safe and decidable contracts, providing full access to the Bitcoin state for reading at any time. The upcoming addition of sBTC, a 1:1 Bitcoin-backed asset on the Stacks layer, facilitates seamless movement of BTC between L1 and L2 while maintaining decentralization. After its release, users can use BTC to pay gas fees, enhancing the L2 experience.

Rollux, Syscoin's official L2 solution, introduces an optimistic rollup developed by SYS Labs. With Optimism Bedrock, Rollux achieves EVM equivalence and integrates Bitcoin's mining network security and Syscoin's L1 finality and data availability. 

Notably, Rollux pioneers decentralized sequencing and provides L2 data availability, positioning itself for "fractal scaling" and global mass adoption. Rollux offers EVM Equivalence, boasting close to 1:1 parity with standard EVM, bolstered by Bitcoin’s mining network security and Syscoin’s L1 finality. 

Furthermore, Rollux aims for progressive decentralization of sequencers, ensuring censorship resistance and Byzantine fault tolerance. It prioritizes simplicity while enabling decentralized communication between smart contracts on Rollux and Syscoin, facilitating asset transfer across both networks.

Botanix Labs seeks to transform Bitcoin into the foundational layer of future finance by constructing a fully decentralized EVM-equivalent L2 atop Bitcoin. Utilizing Bitcoin's Proof-of-Work as L1 and implementing a Proof-of-Stake consensus model, Botanix enables individuals to stake Bitcoin directly on Bitcoin, fostering a new era of programmable finance. 

Botanix revolutionizes the Bitcoin ecosystem by enabling decentralized L2 solutions through BEVM integration, advancing scalability, interoperability, and innovation. Additionally, seamless integration with Ethereum Virtual Machine enhances cross-chain functionality. By building a second layer on Bitcoin, Botanix inherits security aspects while optimizing for speed and efficiency, advancing L2 capabilities.

Drivechain, developed by LayerTwo Labs, enhances the Bitcoin network by facilitating the creation of sidechains. These sidechains operate alongside the main Bitcoin blockchain, enabling new use cases without compromising the security of the main chain.

Drivechain enhances scalability by offloading transactions to sidechains, increasing network efficiency. Developers can customize sidechains with specific features and rulesets, providing a testing ground for innovations. 

With seamless transfer of Bitcoin between the main blockchain and sidechains, Drivechain improves efficiency and utility. It supports various applications such as smart contracts, financial services, privacy enhancements, and cross-blockchain interoperability, expanding the capabilities of the Bitcoin ecosystem. As Drivechain evolves, more innovative use cases are expected to emerge, further enriching Bitcoin's utility and adoption.

Elastos implements a hierarchical structure comprising a main chain and sidechains to improve DApp performance and alleviate pressure on the main chain. The main chain manages ELA circulation, while DApps operate on sidechains. 

A secure transfer of value between the main chain and sidechains is facilitated through the Elastos main chain+sidechain transfer mechanism. Arbitrators, elected by main chain token holders, ensure security by jointly signing token withdrawals from sidechains to the main chain. 

The Simplified Payment Verification (SPV) mechanism secures recharging operations from the main chain to sidechains. Sidechain nodes synchronize main chain block headers, enabling decentralized consensus on transfer transactions. 

Elastos sidechains can employ any consensus mechanism, with a POW-based sidechain developed by the Elastos team for SPV and DPOS-based operations. Through cross-chain technology, Elastos enables mutual transfers with other blockchain systems, termed "friend chains," facilitating interoperability and expanding its ecosystem.

LumiBit pioneers a native Bitcoin Layer 2 solution, leveraging Scroll zk-rollup technology for enhanced efficiency and scalability. By integrating Zero-Knowledge proofs into the Bitcoin ecosystem, LumiBit preserves Bitcoin's native characteristics while offering full EVM compatibility, low latency, and reduced transaction costs. 

Through innovative features like Bitcoin as DA, Omni Wallet, Signature Interpretation, Inscription-based Execution, and UTXO Channel Bridge, LumiBit enhances scalability while maintaining user states on the Bitcoin network. Its full EVM compatibility also provides developers with an accessible, developer-friendly platform, attracting more participants to the Bitcoin ecosystem.

BitVM introduces a computing paradigm enabling the expression of Turing-complete Bitcoin contracts without altering the network's consensus rules. Instead of executing computations directly on Bitcoin, they are verified, akin to optimistic rollups. 

Provers assert that a specific function yields particular outputs for given inputs, and if proven false, verifiers can swiftly execute a succinct fraud proof to penalize the prover. This mechanism enables verification of any computable function on Bitcoin. BitVM serves as the cornerstone for connecting BTC to second layers like sidechains, rollups, and zkCoins.

Mezo is a Bitcoin-first chain developed by Thesis, leveraging tBTC to enhance Bitcoin's functionality with secure bridging and dual-staking models. By building on tBTC, Mezo facilitates reliable and secure bridging between Bitcoin and other blockchain networks, expanding Bitcoin's utility in the DeFi landscape. 

Mezo's dual staking model introduces new ways for users to earn rewards, incentivizing participation and investment within the Bitcoin ecosystem. Key services include reliable bridging, dual staking, and support for DeFi applications, positioning Mezo as a pivotal player in expanding Bitcoin's role in decentralized finance.

Have you enjoyed the deep dive into the Bitcoin ecosystem over the last few issues?

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And that concludes today's edition, Anon! We hope you found this issue enlightening and that it steers you toward your exploration of the Bitcoin universe!

Before we say goodbye for today, hop on over to our lively Telegram community! Chat with our researchers, always ready to tackle your questions, and mingle with fellow enthusiasts! 👇

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