Whereas Bitcoin has just lately dominated headlines following the launch of spot exchange-traded funds investing in BTC, critics have lambasted the community for failing to maintain tempo with innovation within the broader web3 ecosystem.
Nonetheless, an rising cohort of initiatives are engaged on Bitcoin’s Layer 2 networks boasting compatibility with Ethereum Digital Machine (EVM) good contracts, increasing the scope of utility provided by Bitcoin past funds.
Layer 2 networks are constructed on prime of an present Layer 1 blockchain and leverage that community for transaction finality and safety. Ethereum’s Layer 2 ecosystem has posted meteoric progress lately, providing low-cost transactions whereas inheriting the safety of the Ethereum mainnet’s consensus layer. Ethereum L2s at the moment boast a complete worth locked (TVL) of $21.1B, based on L2beat.
Conflux unveils plans for Bitcoin L2
On Jan. 18, the staff behind the Conflux Layer 1 community turned the newest undertaking to affix the fray, saying plans to launch an EVM-compatible Bitcoin Layer 2 in Could following a testnet deployment in February or March.
BTC will perform because the Layer 2’s native fuel token, with BTC holders additionally in a position to stake the coin to take part in its Proof of Stake consensus and governance mechanisms.
Good contracts deployed to the community can even entry occasions occurring on the Bitcoin blockchains. Conflux stated the community will allow DeFi utility for Bitcoin-based property corresponding to inscription tokens.
“The introduction of an EVM-compatible Bitcoin Layer 2 answer on Conflux opens up a realm of potentialities for builders and innovators within the blockchain area.,” Conflux stated. “Builders can now construct decentralized purposes that seamlessly work together with all three areas, unlocking new alternatives for cross-chain performance and making a extra interconnected blockchain panorama.”
Bitfinity closes funding spherical
On Jan. 10, Bitfinity introduced it raised $6M by way of a spherical of token gross sales forward of its mainnet launch in late January or early February.
Bitfinity additionally plans to ship an EVM-compatible Bitcoin Layer 2 primarily based on the Dfinity Basis’s Web Laptop Protocol. Bitfinity hopes to foster a Bitcoin-secured DeFi ecosystem.
The funding adopted a $1M seed spherical in 2021 and featured participation from Polychain Capital and ParaFi Capital, elevating its valuation to $130M. The newest spherical was closed in June, with the staff suspending its announcement till the undertaking’s mainnet launch was only a few weeks away.
Botanix celebrates testnet deployment
On Nov. 29, Botanix claimed to have launched the primary “EVM-equivalent” Bitcoin Layer 2 on testnet following a 12 months of analysis and growth. Botanix additionally launched an accelerator program to assist 10 initiatives constructing Botanix-based dApps.
“In a multichain world, it has change into abundantly clear that EVM is the profitable digital machine – not only for use on Ethereum however on any chain,” stated Willem Schroe, the founder Botanix Labs. “EVM’s tooling, assist, and vibrant developer neighborhood make it the pure aggregator for programmability.”
On Jan. 19, Botanix revealed it’s within the technique of organizing a hackathon for builders wanting to construct EVM-based purposes on Bitcoin.
SatoshiVM accused of rug-pull
Nonetheless, one undertaking inside the fledgling Bitcoin EVM Layer 2 ecosystem is attracting controversy.
The staff behind SatoshiVM, a Layer 2 Bitcoin rollup utilizing EVM for off-chain computation, has come underneath fireplace for allegedly offloading seven-figures value of tokens from a developer-controlled pockets.
On Jan. 20, 1.21M SAVM tokens — equating to 11.5% of the token’s provide — have been distributed to 200 addresses, a number of of which have been related to fashionable influencers. The transactions adopted a number of influencers spruiked the chance that SatoshiVM could airdrop tokens to testnet individuals following its take a look at community deployment on Jan. 13.
The undertaking additionally launched an preliminary liquidity providing (ILO) through Bounce Finance to distribute tokens, igniting considerations that ILO individuals may very well be used for exit liquidity. The funds have been moved to a multisig account managed by Bounce and SatoshiVM in a bid to quell suspicions.
On Jan. 19, SatoshiVM stated SAVM was dwell on Uniswap. The worth of SAVM rallied 69.5% since getting listed on CoinGecko on Jan. 19, however shed 28.5% of its worth since tagging a neighborhood excessive of $14 yesterday.
Lookonchain, a well-liked on-chain analyst flagged {that a} SatoshiVM staff pockets had offloaded greater than $1M value of tokens on Jan. 22.
“Bear in mind when influencers with a whole lot of followers begin shilling a undertaking launch on the similar time it’s possible bc they’ve allocation and can dump their low-cost tokens on you,” tweeted Zachxbt, a well-liked web3 commentator.
Different initiatives bringing good contracts to Bitcoin
Regardless of the current hype, the forthcoming brood of EVM-compatible Bitcoin Layer 2s received’t be the primary initiatives to ship good contract performance to Bitcoin.
The Rootstock sidechain launched in 2018, enabling good contract deployment by way of its Rootstock Digital Machine, an EVM fork. Final month, GFX Labs launched Oku, a fork of Uniswap v3, on the community. Rootstock at the moment boasts a complete worth locked of $130M, based on DeFi Llama.
Stacks additionally launched its “Layer 1.5” community providing good contract execution through its Readability Digital Machine in January 2021. Stacks at the moment hosts a $51.2M TVL.
