Bitcoin Layer 2 projects such as Core Chain and Bitlayer introduce breakthrough scalability and security features for blockchain innovation. zk-rollup and hybrid solutions will transform the functionality of Bitcoin, enabling advanced applications while remaining decentralized.
Bitcoin’s Layer 2 ecosystem has expanded significantly over the last year, from early stages to a hotbed of breakthrough developments.
While Stax and Rootstock once dominated this sector, new projects are emerging that bring capabilities previously thought unattainable to Bitcoin. According to CoinGecko, there are five Layer 2 Bitcoins that will gain traction in 2025.
5 Remarkable Layer 2 Bitcoins
1. Corechain: Bridging Bitcoin and Ethereum for a stronger blockchain
Starting in 2023, the core chain boasts more than $300 million in total value locked (TVL). Aiming to overcome the blockchain trilemma, two people (one a Bitcoin supporter and the other an Ethereum enthusiast) built a blockchain.
Combining the decentralization and security of Bitcoin with the flexibility of Ethereum, their invention is based on a layer 1 blockchain suitable for the Ethereum Virtual Machine (EVM).
Combining Delegated Proof of Work (DPoW), Delegated Proof of Stake (DPoS), and non-custodial Bitcoin staking, the core chain is fundamentally based on the Satoshi Plus consensus process.
While CORE and BTC token holders stake their assets to earn rewards, miners may allocate their hashpower to assist Core Chain validators. CoinGecko says in the video:
“This mechanism allows Bitcoin miners to expand their involvement in the Layer 2 ecosystem.”
2. Bitlayer: Enhancing Bitcoin Scalability with BitVM Technology
Launched in April 2024, Bitlayer was created by a group consisting of well-known initiatives such as Polkadot, Huobi, and Polygon. The company announced the Bitcoin Virtual Machine (BitVM), which leverages the security of Bitcoin to provide enhanced smart contract functionality similar to Ethereum.
Bitlayer uses an optimistic rollup approach to address Bitcoin's scalability issues and provide efficient transaction processing without overloading the main network. CoinGecko said, “BitVM allows transactions to be checked without burdening Bitcoin's central blockchain.”
The approximately $300 million TVL ecosystem of decentralized exchanges, lending platforms, and staking services includes:
3. Marlin Chain: Bitcoin innovation with zk-Rollup technology
Merlin Chain with zk-rollup technology is another Bitcoin layer 2 solution that is compatible with EVM. Bitmap Tech debuted in January 2024 with the goal of “making Bitcoin fun again.” Transactions are processed on the Marlin chain, bundled, checked using zk-proofs, and then finalized with the Bitcoin base layer.
With a TVL of $100 million, Merlin Chain quickly gained popularity for its creative use of DeFi, thereby improving the Bitcoin ecosystem.
4. B-Squared: Seamless protection of Bitcoin transactions with zk-Rollups
For effective off-chain transaction processing, B-Squared (or B²) also utilizes zk-rollup. Starting in April 2024, it will consist of a data availability layer driven by incentivized storage nodes. This is important for dispute and validation resolution, and ensures secure long-term storage of off-chain transaction data.
B²'s $90 million TVL is the result of a smooth app migration made possible by EVM compatibility. It also supports several DeFi apps and BTC staking.
5. BOB: Bridging Bitcoin and Ethereum with a Hybrid Layer 2 Solution
BOB takes a different approach, using a hybrid layer 2 solution that spans Bitcoin and Ethereum. Initially scheduled for an optimistic Ethereum rollup in May 2024, BOB has accumulated a TVL of $30 million.
Integrating Bitcoin's Proof-of-Work security through merge mining helps Bitcoin miners secure both the Bitcoin blockchain and BOB's Layer 2 network.
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