Exploring Bitcoin Layer 2 Projects Shaping the Future of Blockchain
- Bitcoin Layer 2 projects like Core Chain and Bitlayer introduce groundbreaking scalability and security features for blockchain innovation.
- zk-rollups and hybrid solutions are transforming Bitcoin’s capabilities, enabling advanced applications while preserving decentralization.
Bitcoin’s Layer 2 ecosystem has expanded substantially over the last year, from its infancy to a hotbed of ground-breaking developments.
While Stacks and Rootstock once dominated the sector, new projects are emerging, bringing capabilities that were previously thought unattainable for Bitcoin. Here are 5 layer 2 Bitcoins that are set to rock 2025, according to CoinGecko.
5 Layer 2 Bitcoins Worth Highlighting
1. Core Chain: Bridging Bitcoin and Ethereum for a Stronger Blockchain
Starting in 2023, Core Chain boasts a Total Value Locked (TVL) of more than $300 million. Aiming to overcome the blockchain trilemma, two people—one a Bitcoin loyalist and the other an Ethereum enthusiast—built it.
Combining Bitcoin’s decentralization and security with Ethereum’s flexibility, their invention rests on a layer-1 blockchain fit for the Ethereum Virtual Machine (EVM).
Combining Delegated Proof of Work (DPoW), Delegated Proof of Stake (DPoS), and Non-Custodial Bitcoin Staking, Core Chain is fundamentally based on the Satoshi Plus consensus process.
While CORE and BTC token holders might stake their assets to get rewards, miners might assign their hash power to help Core Chain validators. In their video, CoinGecko said:
“This mechanism lets Bitcoin miners extend their involvement into layer 2 ecosystems.”
2. Bitlayer: Enhancing Bitcoin’s Scalability with BitVM Technology
Launched in April 2024, Bitlayer was created by a group comprising well-known initiatives including Polkadot, Huobi, and Polygon. It unveiled the Bitcoin Virtual Machine (BitVM), which uses Bitcoin’s security to provide enhanced smart contract capability akin to Ethereum.
By use of an optimistic roll-up approach, Bitlayer addresses the scalability issues of Bitcoin, therefore providing effective transaction processing without overloading the main network. “BitVM allows one to check transactions without taxing the central blockchain of Bitcoin,” observed CoinGecko.
Comprising decentralized exchanges, lending platforms, and staking services, the ecosystem with a TVL of approximately $300 million includes
3. Merlin Chain: Innovating Bitcoin with zk-Rollup Technology
Using zk-rollup technology, Merlin Chain is another EVM-compatible Bitcoin layer 2 solution. Bitmap Tech debuted it in January 2024 with an aim of “Make Bitcoin Fun Again.” Transactions are handled on Merlin’s chain, bundled, checked using zk-proofs, then finished on Bitcoin’s base layer.
Merlin Chain, with a TVL of $100 million, has rapidly acquired popularity with its creative DeFi uses, therefore improving the Bitcoin ecosystem.
4. B-Squared: Seamlessly Securing Bitcoin Transactions with zk-Rollups
For effective off-chain transaction processing, B-Squared—or B²—also makes use of zk-rollups. Starting in April 2024, it consists of a layer for data availability driven by incentivized storage nodes. Crucially for dispute or validation resolution, this guarantees safe long-term storage of off-chain transaction data.
B²’s $90 million TVL is a result of its frictionless migration of apps made possible by its EVM compatibility. It also backs several DeFi apps and BTC staking.
5. BOB: Bridging Bitcoin and Ethereum with a Hybrid Layer 2 Solution
Using a hybrid layer 2 solution that spans Bitcoin and Ethereum, BOB approaches things differently. Originally scheduled as an optimistic Ethereum roll-up in May 2024, BOB has accumulated TVL of $30 million.
The integration of Bitcoin’s Proof-of- Work security via merge mining will help Bitcoin miners to secure both Bitcoin’s blockchain and BOB’s layer 2 network.
