Bitcoin Layer 2 Protocols Overview: Is BTC L2 Summer Near?

The rise of Bitcoin Ordinals has injected new vitality into the Bitcoin ecosystem, reigniting people’s interest in Bitcoin. This has also led to the emergence of many new Bitcoin Layer 2 projects, such as Merlin, Bison, Bouncebit, NuBit, and BitLayer, among others. This article selects four of the hottest projects on the market: BEVM, Merlin, B² Network, and BounceBit for interpretation, discussing their highlights and advantages.

Key Extracts:

• Merlin Chain, as a ZK Rollup BTC Layer 2 network, achieves seamless mapping between BTC and EVM addresses through a Chain-Agnostic account system and BTC Connect technology provided by Particle Network. It offers users an efficient and secure cross-chain interaction experience.

• B² Network is the first network to implement ZPVC on Bitcoin, using ZK-Rollup technology combined with a zkEVM solution to process user transactions and produce related proofs. B² Network’s technical architecture includes a Rollup layer and a DA layer, aiming to transform Bitcoin into a feature-rich, diverse platform.

• BEVM is a BTC Layer 2 solution compatible with EVM, utilizing Bitcoin’s Taproot upgrade, Schnorr signatures, and MAST technology, while also supporting the use of BTC as Gas. It demonstrates a rich application scenario and high ecosystem compatibility.

• BounceBit has built an infrastructure based on BTC re-staking, adopting a dual-token PoS L1 to achieve full compatibility between Bitcoin’s security and EVM. This ecosystem combines CeFi and DeFi to provide BTC holders with earning opportunities across multiple networks.

Detailed Introduction:

- Merlin Chain: Based on zkEVM technology, it currently has the highest TVL.

The emergence of Merlin Chain marks the birth of a new BTC L2 solution designed to enhance the scalability, transaction efficiency, and security of the BTC network, while also addressing network congestion issues. As a ZK Rollup BTC L2 network, Merlin Chain supports a variety of native Bitcoin assets and is compatible with EVM, demonstrating a design philosophy that considers both the Bitcoin and Ethereum ecosystems.

At the heart of Merlin Chain’s technological framework is its chain-agnostic account system and the BTC Connect technology provided by Particle Network. These innovations not only facilitate seamless mapping between BTC and EVM addresses but also create an efficient and secure cross-chain interaction environment for users. Through the use of smart contracts, signature abstraction, and decentralized oracles, Merlin Chain enables rapid bridging and transaction processing of native assets, thereby ensuring the overall security and trustworthiness of the ecosystem.

Merlin Chain has developed a zkEVM Layer2 solution based on the Polygon CDK framework, cleverly utilizing ZK-Rollup technology to compress and verify large volumes of transaction data significantly, enhancing transaction processing speed and network scalability. By integrating sequencer nodes, Merlin Chain can handle a higher volume of transactions. The compressed data, ZK state roots, and proofs generated using zkEVM technology are securely uploaded to Bitcoin’s L1 Taproot through a decentralized oracle network, enhancing the overall transparency and security of the network.

Under the Polygon CDK’s technological architecture, Merlin Chain employs a solution called CDK Validium, which combines Polygon zkEVM technology and the concept of DAC to achieve multi-signature validity verification on the Ethereum chain. This multi-signature approach echoes Bitcoin’s Taproot technology, positioning the decentralized oracles on Merlin Chain as essentially fulfilling the role of DAC. Merlin Chain’s sequencer task is to collect user transaction data, package and verify it, and then process it through ZKP aggregators and Provers, supported by Lumoz’s ZK-POW feature. Through the decentralized oracle network, this L2 transaction data, including hashes and signatures, is transmitted to the BTC network.

With such a technological layout, Merlin Chain realizes a secure and efficient method of cross-chain interaction, allowing for seamless integration of transaction data between BTC’s L1 and L2 solutions based on zkEVM technology. This architecture not only strengthens network security and transparency but also opens up new possibilities for interoperability between Bitcoin and other blockchain ecosystems, significantly improving the system’s overall performance and user experience.

Merlin Chain has established interconnectivity with over 40 public chains, simplifying the experience for users less familiar with BTC, allowing them to interact using familiar wallets (like MetaMask) and assets. Moreover, Merlin is the only self-developed BTC cross-chain bridge supporting BTC, BRC-20, BRC-420, Bitmap, Ordinals, and soon to support Atomicals, Stamp, and later, Runes, as well as supporting assets from ETH, Arbitrum, Manta, Tron, and others.

B² Network: Utilizes a dual-layer structure, being the first network to implement ZPVC Rollup

As a layer 2 solution for BTC, the B² Network introduces Rollup technology with Zero-Knowledge Proofs (ZKP). This technology aims to enhance transaction processing speed and expand the diversity of application scenarios without compromising security. The B² Network has become the first network on BTC to implement Zero-Knowledge Proof Verification Commitment (ZPVC) Rollups. By utilizing ZKP and a challenge-response mechanism with Taproot, it supports Turing-complete smart contracts while ensuring transaction privacy and security.

The so-called ZPVC uses ZKP to enhance the security and efficiency of BTC Layer 2. Through ZPVC, the B² Network can guarantee the authenticity and integrity of transactions with a challenge mechanism without directly verifying each proof. This leverages BTC’s secure consensus, improving transaction processing efficiency while maintaining the network’s decentralization and security.

The B² Network architecture is divided into two main layers: the Rollup layer and the Data Availability (DA) layer.

The Rollup layer consists of various components, including account abstraction, RPC services, Mempool, sorters, zkEVM, aggregators, synchronizers, and proof generators. This layer is responsible for receiving, storing, sorting, and processing user transactions by generating ZKPs to verify the authenticity of transactions. This series of steps not only secures transactions but also ensures data availability, enabling developers to build secure DApps on the B² Network, including DeFi, NFTs, etc., and support the migration of DApps from other EVM-compatible chains to the B² Network.

The DA layer includes decentralized storage, B² nodes, and the BTC network, mainly responsible for permanently storing Rollup data copies, verifying the Rollup’s ZKP, and final confirmation on the BTC network. Decentralized storage ensures data permanence and accessibility; B² nodes perform various network operations, such as verification, sorting, and data packaging; the BTC network ensures the system’s security and immutability. These three parts work together to significantly improve the network’s efficiency and scalability while retaining its decentralized nature.

BEVM: Achieves decentralization through Taproot consensus, compatible with Ethereum ecosystem DApps

BEVM (Bitcoin Ethereum Virtual Machine) is a decentralized, EVM-compatible BTC Layer 2 solution based on the Taproot upgrade. It allows the use of BTC as the Gas for transactions and enables DApps from the Ethereum ecosystem to run on the BTC network, bringing a wider range of application scenarios to BTC.

From a technical architecture perspective, BEVM leverages the Taproot consensus, integrating Bitcoin’s native Taproot technology stack with a BFT PoS network composed of Bitcoin SPV nodes, creating a decentralized BTC L2 solution. The Taproot consensus consists of three parts: Taproot technology (including Musig2, Schnorr signatures, MAST, etc.), a BFT PoS network made up of Bitcoin SPVs, and threshold node communication formed through the Signal protocol. This architecture enhances the scalability and privacy of the Bitcoin network while improving the efficiency of Bitcoin network transactions through the batch verification processing of BEVM technology.

Schnorr signatures offer a more efficient and private way of signing, allowing the aggregation of multiple signatures, reducing transaction size and costs. Meanwhile, MAST improves the privacy and efficiency of smart contracts by allowing contracts containing multiple execution paths to be deployed on the blockchain, revealing only the data of the actual execution path, thus enhancing data privacy and scalability. These technologies together enhance the efficiency and privacy protection of transactions on BEVM. Additionally, BEVM uses BTC light nodes as verification nodes, relying on network consensus for the management and use of BTC, achieving true decentralization. The block-generating nodes of the BEVM network also serve as custodial nodes of the Bitcoin mainnet, executing transactions automatically through network consensus, ensuring the security and decentralization of BTC management and cross-chain processes.

To simplify the startup and operation process of BEVM nodes, BEVM provides an intuitive and simple node deployment process through Spheron services. Users can easily recharge their Spheron wallet, select BEVM test nodes, configure recommended resources and new wallet addresses, etc., ensuring the smooth deployment and efficient operation of the node.

Bouncebit: Dual-Token PoS Consensus Mechanism

In the official documentation of Bouncebit, it describes itself as a “PoS L1”, yet, as a re-staking infrastructure that provides a foundational layer for various re-staking products, it is also considered by the market as a unique Layer 2 solution. BounceBit introduces an asset-driven PoS Layer 1 approach, which strengthens network security through a dual-token system of BTC and BounceBit native tokens, distinct from conventional Layer 2 solutions. It achieves interoperability with EVM-compatible chains and combines CeFi technologies, such as Mainnet Digital custody and Ceffu’s MirrorX technology, to enhance transaction transparency and liquidity, thereby increasing the flexibility and application scenarios of Bitcoin assets. The dual-token PoS consensus mechanism supports 50 validators. It optimizes validator elections and reward distribution through smart contracts and an epoch-based timeline, while also allowing validators to commission rewards. This balances the operational costs and earnings of nodes, creating a secure and efficient blockchain ecosystem.

Summarize

Summary:

BEVM, Merlin Chain, B² Network, and BounceBit enhance the scalability, transaction efficiency, and application diversity of BTC through their unique technological solutions. BEVM stands out with its EVM compatibility and ecosystem construction; Merlin Chain innovates in cross-chain interaction experience; B² Network enhances transaction privacy and security through ZKP technology; while BounceBit adopts a dual-token PoS consensus mechanism, utilizing the staking of BTC and its native token to bolster network security, and offering full EVM compatibility to broaden BTC’s application areas.

Furthermore, the BTC L2 space is currently experiencing a bloom of development, similar to the previous ETH L2 season. Besides these four public chains, there are other Layer 2 solutions like NuBit and BitLayer, indicating that the future of BTC L2 solutions will reach new heights in scalability, transaction efficiency, security, and ecosystem diversity, propelling BTC into a broader array of growing blockchain applications.

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