Analysis of the historical evolution and current status of Bitcoin Layer 2 ecology

Source: The SeeDAO

01 Bitcoin L2'sHistorical evolution and current situation analysis

Bitcoin L2 technology has attracted much attention since the birth of Stacks in 2015, with its unique side chain or state channel technology solution , aiming to introduce smart contract functions to the Bitcoin network or enhance applications in the payment field. However, before 2023, this technology has not received widespread attention and application, because Bitcoin is mainly regarded as a value store and investment tool, and the ecology on the chain is relatively barren.

However, 2023 will become a turning point for Bitcoin L2 technology. With the explosion of the mainnet asset issuance protocol, on-chain transaction activity has increased significantly, and the Bitcoin network fee rate once soared to 600sat/vB. At the same time, a number of high-quality first-level assets such as ordi, blue box, bitmap, nodemonkes, etc. have emerged, injecting new vitality into the Bitcoin ecosystem. People are beginning to realize the huge potential of Bitcoin L2 in building diversified applications including DeFi, GameFi, NFT encryption art, etc.

From the perspective of responsibilities and missions, the Bitcoin L2 project born around 2023 also shows different characteristics. The early L2 project mainly focused on bringing smart contract functionality and scalability to Bitcoin, similar to the functionality of Ethereum L2. The L2 projects born in recent years focus more on meeting actual needs (such as pledge needs) and enhancing the liquidity and playability of high-quality assets. Although these new projects have been questioned by traditional forces in some aspects, they have undoubtedly injected new impetus into the diversified development of the Bitcoin ecosystem.

Looking to the future, with the continuous improvement of technology and the gradual expansion of the market, Bitcoin L2 is expected to play a more important role in the cryptocurrency ecosystem. We look forward to seeing more innovative L2 projects emerge and contribute new strengths to the prosperity and development of the Bitcoin ecosystem.

02 The current controversial hot spots in BitcoinL2 strong>

Currently, the Bitcoin L2 field is in a stage of rapid development, with various innovative technologies and applications constantly emerging. However, at the same time, there are always disputes about the necessity, trustworthiness and legitimacy of L2.

The Bitcoin community has always been conservative about necessity. Many core developers have reservations about BTC Layer 2 technology, believing that it is not necessary, and prefer to maintain Bitcoin's positioning as pure digital gold. Some extreme Bitcoin fundamentalists reject all innovations related to DeFi and NFT, which runs counter to the development direction of BTC Layer2 technology. In addition, Bitcoin has many stakeholders, but lacks an authoritative voice that can unify the world. Compared with the clear development path of Ethereum Rollup, BTC Layer2 is difficult to form a strong synergy. Even though some leading protocols have achieved billions of dollars in TVL, their necessity is still questioned by some communities and developers.

In terms of trustworthiness, BTC Layer2 has a wide variety of solutions, but few can dominate. One important reason is the controversy over the trustworthiness of these solutions. Since BTC itself does not support smart contracts, many BTC Layer 2 solutions have to adopt the relatively primitive method of multi-signature. Users need to deposit BTC assets into a multi-signature address, and then generate corresponding assets on Layer2. This method has hidden dangers in terms of fund security and poses a huge challenge to user trustworthiness. Therefore, the BTC Layer2 project using a similar scheme has been controversial.

As for legitimacy, this year the veteran Bitcoin information media "Bitcoin Magazine" clearly proposed the BTC Layer2 standard in its official publication. These criteria include: using Bitcoin as a native asset; using Bitcoin as a settlement mechanism to enforce transactions; and demonstrating functional dependence on Bitcoin. By these standards, some popular projects currently on the market do not seem to meet the definition of BTC Layer2. However, after interpretation by various parties, this article reflects more of an ideological dispute. The Western crypto community is trying to reshape the BTC Layer 2 narrative by resetting standards to establish the orthodoxy of certain projects.

To sum up, the BTC Layer2 track is still in the early stages of development, and various controversies indicate that this field is still full of opportunities. If the track lacks controversy and is highly consistent, it may mean that it has entered a mature stage, and early dividends will be greatly reduced for participants.

03 Bitcoin Layer 2Popular Projects

1. B² Network

Basic project information: strong>

Blockchain bridge, ZK proof, Roll-up

(1) Official Twitter: @BSquaredNetwork

(2) Official DC:< /p>

https://discord.com/invite/bsquarednetwork

(3) Official TG:

https://t.me/bsquared_chat

Project technology introduction:

(1) Rollup layer: B² network uses ZK-Rollup as the Rollup layer, using zkEVM solution, responsible for user transactions in the B2 blockchain The execution and the output of related proofs.

(2) Data Availability layer: The data availability layer includes decentralized storage, B² nodes and the Bitcoin network. This layer is responsible for permanently storing a copy of the rollup data, verifying the rollup zk proof, and ultimately finalizing Bitcoin.

(3) Transaction process

Note 1: ZK -Rollup. ZK-Rollup is an organic combination of zero-knowledge proof and integrated transaction information. Zero-knowledge proof is used to ensure the accuracy, integrity and security of information uploaded to a layer of network during the integrated transaction process.

Note 2: Zero-knowledge proof. Zero-Knowledge Proof (ZKP) is a proof system that includes a prover, a verifier and a challenge, which allows the prover to prove the authenticity of a certain confidential information to the verifier without revealing any actual information.

Note 3: Roll-up. Roll-up reduces the burden on the mainnet by shifting the calculation and storage of transactions to Layer2. The basic principle is to roll up and package a bunch of complex transaction processes as a simplified transaction, and then send these transactions to the main network for verification and settlement.

Community activity:

As of April 3, B2 network’s official Twitter has 40W+ followers, the official Discord has 25W+ certified members, and the official There are 11,000+ participants in the Telegram community, the total number of participating addresses in B2 activities has reached 325,000+, and the number of participants has reached 191,000+.

Team profile:

Currently, the information of the B2 network project team is not public, so only the information disclosed on Twitter can be used. B2's team members are located in the United States, United Kingdom and Singapore.

Ecosystem Leader: Nonoo

Research Leader: Stone

Ambassador: J25

2.BEVM

Basic project information:

Blockchain bridge, cross-chain bridge, pledge

(1) Official Twitter: @BTClayer2
< /p>

(2) Official DC:

https://discord.com/invite/gRJ72RcrNK

(3) Official TG:

https://t.me/+gEWgmtyG_5k2MTll

Project technology introduction:

(1) Where assets go from Bitcoin blockchain to BEVM< /p>

BEVM ensures decentralization and data accuracy and validity by deploying light nodes to synchronize complete Bitcoin mainnet data, and achieves synchronization of relevant transaction data and transaction proofs when user assets need to be cross-chain. Wait for BEVM's consensus mechanism to be verified to complete the one-way cross-chain interaction.

(2) Assets return from BEVM to the Bitcoin blockchain

BEVM uses Taproot technology and PoS consensus mechanism to realize the transfer of BEVM’s on-chain assets and data to the Cross-chain back to the Bitcoin mainnet in a centralized way.

BEVM’s Taproot consensus consists of three parts: Part 1: Taproot technology, including Musig2, Schnorr signature, MAST, etc. Part 2: BFT PoS network composed of Bitcoin SPV. Part 3: Threshold node communication via signaling protocol.

(3) Framework to implement core functions

BEVM uses the Substate framework to build the blockchain, achieve EVM compatibility and use Bitcoin as the bottom layer of Gas Fee logic.

(4) Overall technical framework

BEVM’s overall technical framework is divided into four layers from bottom to top. The first layer is between the Bitcoin main network The decentralized interaction layer with the BEVM chain, the second layer is the consensus layer combining Aura and Grandpa, the third layer is the smart contract layer compatible with EVM, and the fourth layer is the application layer that supports the programming language Solidity to build DApp.

Note 1: Light node. It refers to a device or software connected to the blockchain. Compared with full nodes and miner nodes, it has smaller storage space and bandwidth requirements. It only saves block header information and does not save the complete blockchain history.

Note 2:Block header information. In a blockchain network, a block consists of two parts: a block header and a block body. The block header contains rich information, including the hash value of the previous block, the hash value and timestamp of the current block, transaction execution information and miner work information, etc.

Note 3:Taproot. Taproot refers to technology that improves the privacy of transactions and reduces transaction fees through simultaneous signatures by multiple parties.

Note 4: Proof of Stake PoS. Proof of Stake The PoS consensus mechanism is a way to generate new blocks by pledging digital assets, which can prevent double calculation problems and thus significantly reduce energy consumption.

Note 5:Substate framework. The Substate framework provides a modular and extensible approach to building blockchain applications.

Note 6:Aura and Grandpa. Aura is a consensus algorithm used to create blocks and take turns to mine blocks. It is an upgraded version of the DPOS (Delegated Proof of Stake) consensus algorithm and has the characteristics of high TPS (Transactions Per Second). Grandpa is the authority used to finalize blocks. It uses the longest chain rule for voting and works with Aura. Grandpa is an authority used to determine blocks, and together with Aura, constitutes the consensus mechanism of the blockchain.

Note 7:DApp. DApp refers to Decentralized Application, which is an application running on the blockchain.

Community activity:

As of April 2, BEVM’s official Twitter has 23.2W+ followers, and the official Discord has 4W+ certified members. There are more than 3,400 ecosystem developers in the official Telegram developer community, and the address of the mint genesis box has reached 44W+.

Team introduction:

Founder and CEO: Guo Guanghua.

The BEVM team was established in 2017; launched the BTC L2 solution ChainX in 2018, achieving 100,000+ BTC cross-chain, 500,000+ BTC Hash Lock; upgraded based on Bitcoin Taproot in 2021, The BEVM team built the Taproot Consensus Bitcoin second-layer solution; the BEVM pioneer network was officially launched in August 2023, achieving 6 million transactions, 100,000+ on-chain users, and 30+ ecological projects; on March 25, 2024, BEVM Announced the completion of tens of millions of US dollars in financing, with a post-A round valuation of up to US$200 million, and as many as 20 investment institutions.

3.Nervos CKB

< h3>Basic project information:

(1) Official Twitter: @NervosNetwork

(2) Official DC:

https://discord.com/invite/FKh8Zzvwqa

(3) Official TG:

https ://t.me/NervosNetwork

Project technology introduction:

(1) UTXO model:
< /p>

The UTXO model is like a one-time wallet with a password and containing money. It can only be used if you have a specific password (output address). Although the wallet is disposable, the assets in the UTXO do not have to be consumed all at once. If you only use part of the assets in the UTXO, it is like taking part of the money and putting it into another one-time wallet with a password, and the remaining assets will also be taken out and put into another new one-time wallet with a password. wallet, and so on.

(2) Proponent of the layered concept:

CKB belongs to Layer1 in the traditional concept. By building a "common knowledge base" It provides users with the possibility to store all kinds of assets with broad consensus. In the current concept, CKB has become the Layer 2 of the Bitcoin block chain without losing the traditional Layer 1 attributes.

(3) RGB++:

The RGB protocol (Really Good Bitcion) is not a blockchain network technology, it is a non-blockchain Decentralized client-side verification technology allows users to securely check their transactions using zero-knowledge proofs.

RGB++ is based on the logic of the RGB protocol, isomorphically bound to CKB’s Cell model and is compatible with the Lightning Network. While reducing the difficulty of user verification, it also improves privacy and scalability.

Community activity:

As of April 3, CKB’s official Twitter has 12.1W+ followers, and the official Discord has more than 4,000 certified members , there are 1.5W+ participants in the official Telegram community, and the first digital object (DOB) Unicorn has been launched and launched on the JoyID market.

Team introduction:

Chief architect: Jan Xie

RGB++ designer: Cipher Wang

Eco leader: Bai Yu

4.Bitlayer

Basic project information:

(1) Official Twitter: @BitLayerLabs

(2) Official DC:

https://discord.gg/bitlayer

Project technical introduction:

< p>The core goal of Bitlayer is to solve the trade-off between security (trustless) and Turing completeness in BTC Layer 2. In this context, three key tasks are abstracted:

1. Trustless entry and exit of L1 assets

2. State transition using a Turing-complete L2 virtual machine

3.L1 verifies the validity of L2 state transition

Bitlayer innovatively uses the DLC/LN protocol to achieve trustless two-way flow of signals/assets. It introduces virtual machines (EVM, SolanaVM, MoveVM, etc.) to support various state transition expressions.

Team introduction:

Kevin He is the co-founder of Bitlayer. He was previously the vice president of technology at Xinhuo Technology, senior technical director of Huobi, YOUChain Chief Scientist; Charlie Yechuan Hu is the co-founder of Bitlayer. He was previously the managing partner of LucidBlue Ventures. He has also worked on Polygon, Tezos, Polkadot and other projects.

5. Nubit

Basic project information:

(1) Official Twitter: @nubit_org

(2) Official DC:

https: //discord.gg/5sVBzYa4Sg

Project technology introduction:

Nubit can expand the data capacity of Bitcoin without compromise, providing services for Ordinals, Empowering applications such as Layer 2s, price oracles, and indexers, thereby broadening the scope and efficiency of the Bitcoin ecosystem. It leverages innovative consensus algorithms and the Lightning Network, inheriting Bitcoin’s complete censorship resistance.

Data from its official website shows that Nubit can reduce transaction fees by more than 95% and increase data throughput by more than 100 times.

Nubit is mainly composed of four parts: Validators, Trustless Bridge, Full Storage Node and Light Clients. The relationship is as shown below

Among them, the validator nodes mainly use Byzantine Fault Tolerance (PBFT) consensus Algorithm, whose main task is to propose, verify and ensure the integrity of transactions. The trust-minimized bridge acts as an intermediary, charging users storage fees and distributing rewards to validators through payment channels. After receiving the block data from the validator, the full storage node is responsible for the reliable storage of all data. The light client obtains the blocks broadcast by the validator, including data commitments, and may randomly initiate requests to full storage nodes to verify DA.

Nubit uses a variety of technologies including: consensus participating in the Bitcoin staking protocol, data availability sampling, persistent data commitment based on the Bitcoin network, and decentralized bridges. These technologies provide Nubit with significant advantages:

1. Trust minimization: Compared with other non-Bitcoin native data availability solutions, Nubit minimizes the requirements for trust.

2. Data throughput improvement: Compared with the Bitcoin blockchain, it achieves an estimated 100 times increase in data throughput.

3. Cost reduction: Nubit is designed to reduce storage costs on the Bitcoin network by up to 99%.

4. Wider data types: Nubit provides more refined data access and supports a wider range of data types and applications.

With Nubit, applications and users in the Bitcoin ecosystem can enjoy a data availability layer solution guaranteed by Bitcoin’s proven security.

Team introduction:

Nubit’s co-founder Hanzhi Liu and team members are professors and talented doctoral students from UCSB, and are engaged in blockchain engineering implementation With rich experience in the field, the team has also received angel round financing support from BRC-20 founder domo. Recently, NubitNubit completed a US$3 million Pre-Seed round of financing, with dao5, OKX Ventures, Primitive Ventures and others participating in the investment. The team stated that it is preparing for the launch of the main network.

6.Gelios

Basic project information:

(1) Official Twitter: @GeliosOfficial

(2)Official TG:

https://t.me/GeliosOfficial

Project technology introduction:

1. As the first community-owned DApp layer built on the Bitcoin network, Gelios emphasizes community governance to provide users and developers with greater participation and decision-making power.

2. Gelios can seamlessly span major blockchain networks such as Bitcoin, Ethereum and Arbitrum, providing users with a wider range of application scenarios and interaction possibilities.

3. As a multi-functional "bridge", Gelios helps to smoothly process and transfer information, data and assets, promoting interoperability and integration between blockchains.

4.Gelios adopts advanced technologies and protocols and is committed to promoting the innovation and development of blockchain technology to provide users with a more efficient, secure and convenient service experience.

5. Gelios focuses on the participation and contribution of developers, provides a wealth of development tools and resources, encourages developers to build more decentralized applications based on the Bitcoin network, and promotes the development of the blockchain ecosystem. Continuously develop and grow.

7.Merlin Chain

< p>Basic project information:

(1) Official Twitter: @MerlinLayer2

(2) Official TG:

https ://discord.gg/JYqDYMu76e

Project technology introduction:

Merlin Chain directly anchors the core pain point of the Bitcoin network-the scalability issue .

Merlin Chain adopts ZK-Rollup to compress a large number of transaction proofs into a simple checksum to improve transaction efficiency and scalability. The sequencer node on top of it is responsible for collecting and batching transactions, generating compressed transaction data, ZK state roots, and attestation via zkEVM. The compressed transaction data and ZK proofs are then uploaded to Taproot on Bitcoin L1 via the decentralized Oracle network. This Taproot is available to the entire network to ensure transparency and security.

1. Use ZK-Rollup technology to compress a large number of transaction proofs into simple checksums, thereby improving transaction efficiency and scalability.

2. Use the decentralized oracle network to verify uploaded transactions and use Bitcoin as a security pledge to enhance the security and credibility of transactions.

3. Prevent fraud cases from occurring and ensure the reliability and security of transactions through the fraud proof function on the chain.

4. As a second-layer solution for the Bitcoin network, Merlin Chain can solve the problems of network congestion, slow processing time, and high transaction fees on the first layer of Bitcoin, improving transaction speed and reducing transaction costs. cost.

Team profile:

The team behind MerlinChain, BitmapTech (formerly known as RCSV), has been deeply involved in the Bitcoin ecosystem for a long time and has contributed much to Bitcoin in the past year. A native innovation project with an overall market value of over US$500 million. The BRC-420 “blue box” issued by BitmapTech has become one of the most popular assets in the Ordinals protocol.

8. Conflux Network

< p>Basic project information:

(1) Official Twitter: @Conflux_Network

(2) Official DC:

https ://discord.gg/JYqDYMu76e

Project technology introduction: 

1. Bitcoin as a fuel token: Bitcoin L2 in Conflux In the space, Bitcoin (BTC) is used as a means of payment for transaction fees, which not only simplifies the transaction process but also takes advantage of Bitcoin's wide acceptance and value stability.  

2. BTC pledge and security: Conflux introduces BTC pledge as part of its consensus mechanism, using the security and stability of Bitcoin to enhance the security and participation of the network.  

3. ERC20 compatible CFX: In order to simplify the development of transactions and applications in the new BTC L2 space, Conflux’s native token CFX will exist as an ERC20 token, allowing it to be easily used in multiple used in decentralized applications.

4. High degree of interoperability: By supporting cross-chain transactions and contract calls, Conflux’s Bitcoin L2 solution greatly improves the interoperability between different blockchains, providing users and developers with More abundant and flexible application scenarios.  

5. Miner incentives: Miners on the Conflux network can receive incentives by receiving BTC as transaction fees, which may attract more miners to participate in the network, improve the security and decentralization of the network degree of centralization.

9. Bitlight Labs

< h3>Basic project information:

(1) Official Twitter: @BitlightLabs

< p>(2)Official DC:

https://discord.gg/JYqDYMu76e

Project technology introduction:

Bitlight Labs has built a series of infra facilities focusing on transactions around the RGB protocol, which are mainly divided into two directions: from the RGB protocol to the Lightning Network ecosystem, and from BitcoinFi to Lapps. This provides a wealth of products for the entire Bitcoin ecosystem and the RGB protocol ecosystem. Bitlight Labs founder Valestin mentioned in a previous interview that the reason why Bitlight Labs chose to fully invest in the RGB ecosystem is mainly based on the following reasons:

1. Complete technical foundation

strong>: The RGB protocol shows a fairly complete technical foundation at the client and smart contract levels. From a code and documentation perspective, it is quite mature in terms of technology and only needs further improvement of the infrastructure.

2. Bitcoin Lightning Network: The RGB protocol implements transactions based on the Bitcoin Lightning Network. The network can theoretically provide transaction speeds of up to 40 million TPS, and theoretically Zero transaction fees can be achieved. This enables RGB to meet various payment needs in the future and support a larger user base and a higher-level application ecosystem.

3. Relying on Bitcoin security: RGB relies on Bitcoin. As one of the most secure payment systems, there is no need to modify or fork the main network. This provides RGB with a foundation for security while also supporting a more performant smart contract system with theoretically unlimited scalability.

4. Industry support: The RGB protocol is supported by industry leaders such as Tether CEO Paolo Ardoino. Tether and Bitfinex began investing early to support the development of the RGB ecosystem and directly participated in the development of the underlying code. Tether announced that it will issue stablecoins based on the RGB protocol, further promoting the development of the RGB protocol.

5. Mass Adoption Potential: Valestin sees the potential of the RGB protocol to implement Mass Adoption on Bitcoin. Features such as efficiently traded assets, fragmented clients, and efficient and definable smart contracts make him believe that the future development space is only limited by personal imagination.

10. Map Protocol

< h3>Basic project information:

(1) Official Twitter: @MapProtocol

< p>(2)Official TG:

 https://t.me/MAPprotocol/

Project technology introduction:

< p>MAP Protocol consists of three parts:

1. Protocol Layer - the core of full-chain communication verification

MAP Protocol protocol layer is the most The bottom layer is also the core of full-chain communication verification and is responsible for cross-chain verification. This layer consists of MAP Replay Chain, light nodes deployed on each chain, and the inter-chain messaging program Maintainer. The MAP Relay Chain virtual machine layer has successfully built-in major L1 signature algorithms, hash algorithms and Merkle Tree proofs in the form of pre-compiled contracts, making the MAP Relay Chain like a super language machine proficient in various languages. Through the MAP Relay Chain chain-to-chain can communicate with each other, which lays an isomorphic foundation for the interoperability of various chains.

The light nodes deployed in each chain have the characteristics of independent self-verification and instant finality guarantee. Based on the isomorphic foundation of MAP Relay Chain, the light node cross-validation network can have the same data language. It can be easily deployed to any corresponding L1 in the form of smart contracts, and then perform decentralized cross-chain validity verification.

Maintainer is an independent inter-chain messaging program, responsible for updating the latest status of light nodes and writing the consensus layer block header (Validator signature) information of each chain to the origin chain on the target chain in the form of a transaction. In the light node smart contract, this ensures that the light node of the origin chain on the target chain is consistent with the Validator information of the origin chain.

The MAP Relay Chain, which has a variety of pre-compiled contract implants, is unique in the entire industry. Compared with other light node cross-chain technology solutions, MAP Protocol can cover all L1. Combined with its unique cross-chain communication component, MAP Protocol will greatly alleviate the obstacles to the free flow of data across chains and assets throughout the chain.

2.MOS full-chain service layer MAP Omnichain as a Service Layer - for dApp developers

MOS layer diagram

The MOS layer is the second layer, similar to the Google Mobile Service for the Android ecosystem, providing full-chain development services for dApp developers. This layer has cross-chain asset locking smart contracts and inter-chain messaging component Messenger deployed on each blockchain. Developers can directly use this layer to build full-chain application scenarios, or further compile according to their own needs. The smart contracts at this layer are all open source components that have passed CertiK audits. dApp developers can use them directly without worrying about security and development costs, thereby saving development and learning costs for the entire chain.

3. Omnichain Application Layer - Broadening the full-chain dApp ecology

The full-chain application layer is related to the development of the dApp full-chain ecology. The full-chain services at the MOS layer can enable dApps to achieve interoperability. At the same time, the verification network of data assets at the protocol layer can promote dApps to continuously expand their existing ecology, thus realizing a full-chain ecology where all chains are interoperable.  

 MAP Protocol full-chain data circulation diagram

Take decentralized derivatives and synthetic assets as examples. Currently, both are subject to other on-chain assets. Regarding price and quantity, accurate and timely asset data information cannot be obtained through off-chain oracles, so liquidity and user experience are poor. Although multi-chain deployment can solve this problem, this process is time-consuming and labor-intensive, and will increase unnecessary development costs. If deployed on the MAP Replay Chain, decentralized derivatives and synthetic assets can obtain accurate multi-chain data from the oracles on the MAP Protocol chain, and are no longer subject to the obstacles of data flow, thus easily realizing the full integration of assets. chain flow.

Similar application scenarios include full-chain DID, full-chain lending, full-chain Swap, full-chain GameFi, full-chain DAO governance, full-chain tokens and full-chain NFT, regardless of where the main business contract of the dApp is deployed. On which L1, through MAP Protocol developers can easily build full-chain applications capable of covering all chain users and assets.

Team introduction:

MAP Protocol was founded in 2019. It is a team completely led by a culture of geek engineers and researchers, led by senior cryptography experts. &Composed of blockchain researchers, smart contract developers, and underlying blockchain engineering experts.

The above information is industry information analysis and does not constitute investment advice.