Why Bitlayer Is Our Top Pick for Bitcoin Innovation

We are delighted to have invested in Bitlayer, a visionary initiative providing the first Bitcoin security equivalent to the Layer 2 solution. Their mission, summed up in one sentence, is to tackle the challenging trade-off between security (trustlessness) and Turing completeness in Bitcoin’s Layer 2 via groundbreaking cryptographic innovations and advanced blockchain protocol engineering. No doubt, we at the Digital Consensus Fund are confident that the initiative will eventually strengthen and sustain the prosperity of the Bitcoin ecosystem.

How Bitlayer’s Technical Foundations Set It Apart

The Bitlayer solution addresses a critical issue in the Bitcoin blockchain: maintaining Bitcoin’s security and trustlessness while enabling more complex computational functions akin to those found in Turing complete systems. Bitlayer’s Layer 2 solution inherits Bitcoin’s robust security through BitVM, a novel approach that maintains trustlessness and security. Unlike one of its most viable competitors, Lightning Network, which relies on payment channels and requires participants to remain online to secure transactions, BitVM leverages advanced cryptographic techniques to achieve trustlessness without such requirements. In turn, the integration guarantees that Layer 2 inherits the same level of security as Bitcoin’s base layer. The results are exhilarating, as these dynamics build unmatched transaction confidence and integrity.

Another critical advancement introduced by Bitlayer is the trustless two-way peg mechanism, which combines Discreet Log Contracts (DLCs) and BitVM. We point out that this mechanism surpasses the multisig-based federated model used by Liquid Network, which relies on a group of trusted entities to manage the peg between Bitcoin and its sidechain. Bitlayer’s trustless two-way peg allows for seamless and secure movement of assets between Layer 1 and Layer 2 without trusted intermediaries. This enhances decentralisation and security, making Bitlayer more resilient and trustworthy compared to Liquid’s federated approach.

Bitlayer allows a completely EVM-compatible environment by supporting many Virtual Machines (VMs). Bitlayer is superior to Lightning Network because it supports complicated smart contracts but is mainly geared at quick, inexpensive transactions. It also distinguishes Bitlayer from Rootstock (RSK), which uses a federated peg mechanism akin to Liquid Network while trying to provide Bitcoin smart contract features. Bitlayer enables developers to quickly convert their current Ethereum-based apps to Bitcoin by supporting the EVM, therefore using Bitcoin’s security and Ethereum’s innovative contract capabilities. Because it drives more incredible innovation and increases the possible uses for Bitcoin, this compatibility offers a more flexible and robust platform than RSK and other competitors.

So, unlike competitors that may compromise on security or decentralisation, Bitlayer seamlessly integrates with the existing Bitcoin infrastructure, enhancing capabilities without compromising core principles.

Meet the Visionaries Behind Bitlayer

As with any ambitious initiative, the team matters tremendously in its success. Bitlayer is developed by a highly sophisticated and experienced public blockchain team. The founders, hailing from prestigious blockchain projects such as Huobi, Polygon, and Polkadot, bring years of practical experience and a track record of top-tier industry results. Altogether, their expertise and insights drive Bitlayer’s development, ensuring it meets the highest security, functionality, and innovation standards.

Bitlayer’s innovations ensure that Bitcoin can evolve while maintaining its foundational security and trustlessness. By bringing Turing completeness to Bitcoin’s Layer 2, we unlock new potential for the Bitcoin network, driving its adoption and utility in the global blockchain landscape.

As it addresses the limitations of current Layer 2 solutions, Bitlayer opens up new possibilities for developers and users alike. It thus enables more complex and secure smart contracts, decentralised applications, and other innovative uses that were previously unattainable on the Bitcoin network. This expansion of capabilities is crucial for the long-term growth and sustainability of the Bitcoin ecosystem.

Bitlayer’s Pledge to a Thriving Bitcoin Ecosystem

Well-known Asian venture capital companies, such as ABCDE Capital, support Bitlayer, which interacts with over 50 top VCs in the infrastructure and Bitcoin ecosystems. Positive comments have been received on creating the BitVM Asia community, where Bitcoin Layer 2 standards are being defined. Launched in March, the first version of testnet is fully compatible with the EVM; integration documentation will be available soon.

Expansive and bold, Bitlayer seeks partnerships across a wide range of industries, including DeFi, DEXes, lending platforms, perpetual DEX, stablecoins, launchpads, NFT lending, gaming, SocialFi, real-world assets (RWA), and middleware solutions like Web3 authentication, wallets, and data protocols. The goal is to build a vibrant environment supporting creative initiatives.

Also, there is a clear dedication to supporting these projects through various programs. Over the long term, Bitlayer plans to reward top-performing projects with 50% of the total supply of governance tokens. This significant commitment underscores Bitlayer’s dedication to promoting creativity and ensuring the long-term viability of initiatives within the ecosystem. Even more, Bitlayer provides liquidity assistance and other essential resources to help these projects grow and achieve their full potential.

After breaking $300 million TVL in only 2 days post-launching of the Bitlayer Mining Gala on 29 May 2024, Bitlayer exhibits an incredible momentum. A major turning point in its development, the project is preparing for its Token Generation Event (TGE) in Q3.

Conclusion

Bitlayer’s innovative tech addresses Bitcoin’s key issues head-on, including BitVM and a trustless two-way peg. The top-notch team from Huobi, Polygon, and Polkadot, plus strong VC support and hefty liquidity, sets Bitlayer apart. With an EVM-compatible testnet and a Token Generation Event coming up, Bitlayer is poised to transform Bitcoin. Needless to say, we are thrilled to be part of this revolutionary ride for the whole ecosystem!

Disclaimer

Please note: The information provided here is for general informational purposes only and should not be construed as investment advice. It is not intended to be used to evaluate any investment decision and should not be relied upon for accounting, legal, tax, business, or investment advice. You are encouraged to consult with your own advisers, including legal and financial professionals, for guidance tailored to your specific circumstances.