Funding Frenzy in Bitcoin Ecosystem: A Glimpse of 10 Early-Stage Layer 2 Projects

After the Inscription craze subsided, Bitcoin Layer 2 solutions are now seen as the promising contenders to support the thriving Bitcoin ecosystem.

Currently, Bitcoin Layer 2 projects are showing a trend similar to Ethereum Layer 2, attracting a significant number of entrepreneurs. In addition to well-established Layer 2 protocols in the Bitcoin ecosystem like Lightning Network, Liquid Network, Stacks, etc., there is a continuous emergence of new projects claiming to be Bitcoin Layer 2 solutions, such as B² Network, BEVM, Dovi_L2, Map Protocol, and more.

Several institutions have announced the establishment of funds to invest in the Bitcoin ecosystem. ABCDE Capital, along with Huobi's co-founder Du Jun, has expressed the commitment to contribute $50 million to actively participate in the development of the Bitcoin ecosystem, with Bitcoin Layer 2 being a preferred focus area.

Smart Bitcoin Labs recently announced the establishment of UTXO Fund I and UTXO Fund II, with a fund size of $5 million, focusing on investments in areas such as Bitcoin script, Layer 2, and DeFi.

In addition, the incubator Trustless Lab has also announced the launch of the Bitcoin Ecosystem Phase One Fund, with a size of $10 million. This fund will be used to incubate Bitcoin ecosystem projects and promote technological innovation and development.

This article will introduce 10 Bitcoin Layer 2 projects.

B² Network

B² Network, founded in 2022, is a Bitcoin Layer 2 network developed based on ZK-Rollup. It is EVM-compatible, allowing seamless deployment of DApps for developers within the EVM ecosystem.

According to ABCDE, the core members of the B² Network technical team are active participants in mainstream Web3 open-source communities such as Ethereum, Bitcoin, Cosmos, and Sui. The team has received multiple grants to support their work. They specialize in Web3 infrastructure products, including blockchain Layer 1, Layer 2, cross-chain, and account abstraction, demonstrating mature engineering capabilities.

BL2

BL2 is a Bitcoin ZK-Rollup Layer 2 solution built on the VM Universal Protocol, utilizing the DA layer of the modular blockchain Celestia. It introduces ZK-Rollup to Bitcoin, implementing multi-node ZK verification on Layer 2 and supporting both on-chain backups and cross-chain functionality.

BL2 has introduced the BRC-20 token $BL2T, with a total supply of 21 million tokens. These tokens are utilized for L2 governance on the BTC network, with 20% allocated for fixed gas burning. On January 8th, BL2 conducted an Initial DEX Offering (IDO) on Turtsat at a price of 30 Sats (approximately 0.013U).

Chainway

Chainway was established in 2022 and is a blockchain infrastructure company focused on Bitcoin, Ethereum, and zero-knowledge technology. The company has developed a Bitcoin ZK Rollup solution, a browser extension tool called OrdinalSafe, and a zk tool named Proof of Innocence.

Recently, Chainway announced on its official social media channels its plans to launch a public mainnet for Bitcoin ZK Rollup in 2024. Additionally, the company aims to establish a community around Bitcoin ZK Rollup.

Bison

Bison, founded in 2023, is a Bitcoin-native zk-rollup designed to enhance transaction speed while implementing advanced features on the native Bitcoin blockchain. Developers can leverage zk-rollup to create innovative DeFi solutions such as trading platforms, lending services, and automated market makers.

Bison has also participated in the roadshow of the ABCDE Bitcoin Ecosystem Project. According to reports, Bison's solution utilizes zero-knowledge proofs and Ordinals for fast and secure transactions. All data is anchored back to Bitcoin for enhanced security. Bison can achieve a transaction throughput of up to 2,200 transactions per second at a cost of 1/36th of Bitcoin's fees.

Rollux

Rollux, established in 2023, is developed by the Layer1 blockchain Syscoin (SYS). It is an Optimistic rollup equivalent to EVM, inheriting the security of Bitcoin's mining network and the Layer 1 data availability of Syscoin.

It is noted that Syscoin announced securing a $20 million ecosystem development fund from the

cryptocurrency

exchange MEXC in June 2022.

Rollux went live on the mainnet in June 2023 and has plans to transition from Optimistic Rollup to ZK-based Rollup. Rollux has not introduced a new token but utilizes Syscoin as the Gas token.

BOB

BOB (Build On Bitcoin), established in 2020, is an EVM rollup stack with native support for Bitcoin. It enables developers to build decentralized applications on top of Ordinals, Lightning, and Nostr.

BOB has currently launched a public testnet, actively running on the Sepolia Ethereum testnet. According to the roadmap on the BOB official website, the project plans to enhance Bitcoin's security through PoW-heavy staking and upgrade from Optimistic Rollup to ZK proof.

Hacash.com

Hacash.com, established in 2022, presents a unique solution that combines state channels with multi-layer scaling, resembling an “ultimate patchwork creature” (without negative connotations) compared to sidechains and simple OP/ZK Roll-up alternatives. Unlike bidirectional transfer sidechains, Hacash operates on the principle of unidirectional transfer of Bitcoin on Layer1, meaning Bitcoin can be moved to the Hacash chain without changing user private keys. Payment operations are then conducted on the state channel deployed through Layer2. Additionally, the Hacash team has proposed a Layer3 concept to achieve ecosystem scaling.

The Hacash Layer1 network has been operational since 2019, maintaining PoW as its underlying consensus mechanism. It utilizes three PoW currencies—HACD, BTC, and HAC—to implement a self-adjusting supply system for issuance, distribution, and settlement, addressing Bitcoin's lack of currency attributes. Layer2 is designed as a channel chain for payment settlement, suitable for large-scale payments, and serves as the infrastructure for Layer3. Layer3 facilitates multi-chain interaction, ecosystem development, asset issuance, smart contract execution, and cross-chain facial data interaction.

BeL2

BeL2 is a Bitcoin Layer2 solution launched by the layer1 blockchain Elastos (ELA). It is a BTC Rollup that enables smart contracts and irreversible digital protocols on the Bitcoin network. These smart contracts can be fully defined, managed, tracked, and modified on Bitcoin without the need for intermediaries.

The network also allows users to stake their Bitcoin holdings and earn rewards when interacting with applications built on BeL2.

Libre

Libre, established in 2022, is a Bitcoin Layer2 (L2) sidechain aimed at enhancing the performance of Bitcoin by improving its speed and usability.

The mainnet of Libre was launched on July 4, 2022. Shortly after the mainnet launch, Libre conducted an airdrop of 10 million LIBRE tokens, with only 277,000 LIBRE tokens eventually claimed. In addition to the Layer2 blockchain, Libre has introduced a beta version of the BRC20 Dex and a mobile app, providing users with convenient means for transacting with Bitcoin.

Map Protocol

MAP Protocol, founded in 2019, is a Bitcoin Layer2 (L2) designed for peer-to-peer cross-chain interoperability. The MAP Protocol leverages the security mechanisms of Bitcoin, enabling seamless interaction between assets and users from other public blockchains and the Bitcoin network. This not only enhances network security but also facilitates BRC20 cross-chain capabilities.

Recently, MAP Protocol announced strategic investments from DWF Labs and Waterdrip Capital.

It is noteworthy that MAP and MAPO are native tokens of the MAP Protocol, representing the same token but using different symbols to distinguish the chain they belong to. On December 18, MAP Protocol initiated a significant token burn, totaling 133,886,020 MAP/MAPO tokens, accounting for 5.9% of the circulating supply.