How did BEVM, which took seven years to build a masterpiece of BTC Layer2, create?

Recently, Crypto exchange Bybit released a report stating that BTC will continue to outperform other markets in 2024, and it is expected that the achievements of BTC projects will also become popular in this bull market.

Indeed, the success of projects such as Ordinals and Runes on BTC shows that opportunities and innovation can drive community development. However, with the current dominance of the BTC network and its popularity soaring, challenges related to scalability and transaction efficiency have also emerged.

BTC Layer2: Difficulties and Future Pattern

Back to the essential issue of blockchain, to achieve an efficient and smooth experience of Layer1 blockchain, not only the core decentralization and security are required, but also network scalability, throughput and low Gas fees. However, it is currently difficult to achieve a balance between the three, which is also known as the "blockchain impossible triangle".

Therefore, a set of Layer2 solutions built on the Layer1 chain is needed to improve the performance of the blockchain. The popular BTC Layer2 is a scalability solution built on the basic layer (Layer1) of BTC, which aims to solve the throughput limitations and high transfer fees of the Bitcoin network.

Compared with Layer1 focusing on the operation of underlying block technologies such as consensus mechanism, data immutability, and network incentives, Layer2 pays more attention to the expansion around the "application layer" and "contract layer" of Layer1, thereby improving the scalability of the blockchain without being limited to the Layer1 platform framework. Among them, Bitcoin is also a relatively special one in the Layer1 public chain. Because it does not support smart contracts, Bitcoin has not been able to develop a more mature ecosystem due to this limitation. The development of Layer2 technology has brought new hope to Bitcoin.

Layer2 solutions are not new concepts. Their development history can be traced back to the BTC Lightning Network proposed in 2015. It is mainly used to solve BTC payment scenarios, but it does not support smart contracts. In order to meet the requirements of efficient operation of smart contracts and higher transaction speeds, BTC side chains were born, which can transfer the workload of the main chain to the side chains.

The subsequent explosion of the ETH ecosystem has shaped an endless stream of applications, such as Web3 games, NFTs, social applications, etc. However, it has also brought bottlenecks to the Ethereum network itself. Ethereum is also in urgent need of expansion. Therefore, some expansion solutions of Bitcoin were used to create the Raiden Network and Plasma. The characteristics of the Raiden Network are similar to those of the Lightning Network, supporting all ERC20 token transactions, while Plasma is another expansion framework used to increase the network throughput of Ethereum.

After that, the development of Ethereum's Layer2 was ahead of Bitcoin's expansion. At present, the relatively new Ethereum Layer2 technologies are mainly Rollups, OP Rollup and Zero-Knowledge (ZK) Rollup, which bring higher security and performance improvements, and can also use smart contracts on the expanded Layer2. Ethereum's Layer2 has finally gained wide recognition in the market and has developed rapidly.

After the successful verification of Layer2 solutions such as Ethereum, with the BTC Taproot upgrade in 2021, BTC expansion and bridging have brought better solutions, and Ethereum's successful experience can finally be put into practice on Bitcoin. The current market trend has returned to the original intention of blockchain-the infrastructure of BTC Layer2.

Looking at the market size of Ethereum Layer2, its financing valuation starts at about 3 billion US dollars, and its market value has reached tens of billions of US dollars. The market value (FDV) of OP, ARB, and Starknet has reached more than 10 billion US dollars, and most Layer2 total locked value (TVL) is generally more than 200 million US dollars. In addition, the current total market value of Ethereum Layer2 has reached about 100 billion US dollars, and the TVL is as high as 10 billion US dollars. According to the forecast of investment company VanEck, by 2030, the market value of Ethereum Layer2 will reach 1 trillion US dollars.

In contrast, BTC Layer2 is still in its infancy. Many projects that have emerged since 2023, such as the leading Merlin chain, have attracted a lot of attention and investment, with the highest locked value of about 3.5 billion US dollars. However, in terms of the overall market value and TVL of BTC Layer2, it is relatively low, and the market space is still huge.

At present, nearly 100 projects have emerged in ETH Layer2, while BTC Layer2 projects have only begun to build an ecosystem one after another. However, considering Bitcoin's leading position in the field of cryptocurrency and the importance of Layer2 technology in improving transaction speed and reducing fees, it can be foreseen that the future story is also very interesting.

From the perspective of investors and entrepreneurs, BTC Layer2 is currently the best outlet. First of all, as the leader in the field of cryptocurrency, BTC has a huge market base and user base, which provides a good entry point for capital inflow. From a technical perspective, compared with creating a new public chain and a new set of consensus gameplay, it is more credible and practical to carry out technical innovation based on the existing Layer1 consensus mechanism.

The current survival skills for Layer2 can be summarized into four mainstream models. The first is the ecological business closed-loop model, such as the multi-asset GMX derivatives created by Arbitrum, which can allow users and communities to spontaneously drive its sustainable development. The second is a narrative of brand building, such as OP Chain's one-click ETH Layer2 based on OP Stack, which has been deployed in multiple fields. The third is the technical narrative model, such as Starknet and zkSync's zk technology, which attracts users and funds through technological innovation. In addition, there is also a violent lock-up to increase TVL model, such as Blast and Merlin, which increases the total locked value by locking funds.

Compared to ETH Layer2, which has been flourishing in the last bull market, BTC Layer2 has only been evolving in the past year. For builders and communities, with the huge market value of BTC, the landing and expansion of BTC Layer2 itself is very confident.

From gameplay to ecology, who is the next leader of BTC Layer2?

In the current development of BTC Layer2, various plans are emerging in an endless stream. The violent lock-up fund strategy introduced by Blast aims to boost community enthusiasm and user sentiment, and it has indeed shown a strong and powerful effect when the bull market comes. In addition, there are also BitVM and RGB protocols that focus on technical innovation, but such projects often need time to mature and settle, and perhaps they can only truly grow and land after experiencing the next bull market cycle.

Of course, many people expect BTC Layer2 to create a myth of expansion and widespread application like ETH. Currently, there are many BTC Layer2 solutions that copy the Ethereum Layer2. But have you ever thought about why not use BTC native technology to achieve Layer2 expansion?

According to observations, the only representative project at present should be BEVM, which is a Layer2 that is completely based on the BTC Taproot technology combination and compatible with mainstream blockchain technology. The core of BEVM is to combine a number of Bitcoin native technologies such as Mast contracts, Schnorr signatures, BTC light node networks, and the most widely used virtual machine EVM during the BTC Taproot upgrade into a set of solutions to achieve decentralized BTC Layer2. In addition, BEVM adopts a brand narrative path similar to OP - BEVM-Stack can achieve one-click BTC Layer2.

When the BTC Layer2 ecosystem exploded, the BEVM mainnet was launched in March this year, providing one-stop services for more than 100 BTC Layer2 projects. In addition, BEVM Stack can also customize Gas and support the use of various currencies as Gas, such as BTC, Sats, etc., providing more possibilities for the development of BTC Layer2.

BEVM is eager to create an ecological closed loop like Optimism, and also create a business empire like Ethereum for the BTC ecosystem. There are currently two important applications in the BEVM ecosystem: BTC liquidity pledge protocol Bido and BTC stablecoin protocol Satoshi Protocol.

Bido allows BTC Holder to pledge BTC on Bido to support the operation of BEVM network nodes, similar to Lido on ETH, providing pledgers with more re-pledge options. On the one hand, the security of Layer2 can be maintained through the pledge model, and on the other hand, BTC pledgers can obtain Gas fees on the Layer2 platform-currently users who pledge on Bido can obtain 50% of the Gas income of the entire BEVM network.

The Satoshi Protocol is a decentralized stablecoin of BTC. It uses the decentralized pledge of the BEVM platform to generate stablecoins, which can solve the problem of BTC payment fluctuations on the Lightning Network. At the same time, it is compatible with the full-chain protocol of USDC CCTP, which allows BTC decentralized stablecoins to circulate to any public chain VM platform like USDC.

With BTC as its foundation, how did BEVM emerge?

Due to limited space, the previous article only briefly mentioned the differences between BEVM and other BTC Layer2 projects. Recently, BEVM has also attracted widespread attention from capital. In April, it announced that it had received tens of millions of financing from many well-known institutions including Bitmain, which made its valuation as high as 200 million US dollars.

After BEVM was launched on the mainnet, it launched an on-chain airdrop event with Binance Web3 wallet and became the first BTC Layer2 project connected to Binance. According to its official data, 160,000 users participated in this event and generous rewards were also provided.

All kinds of eye-catching figures show that the first BTC second-layer network built on Taproot Consensus with BTC as Gas and EVM compatible seems to have a great background. It can stand out among many BTC Layer2 projects. What is unique about BEVM?

1. Strong technical accumulation and development history

Perhaps it is related to its unique technical advantages and project background. BEVM's seven years of technical accumulation and continuous development process have given a blessing in this bull market like "icing on the cake".

BEVM’s earliest appearance actually started with the development of ChainX, a Polkadot cross-chain project in 2017. At that time, ChainX could be called the first Substrate chain. What it did was to combine BTC decentralization with the Polkadot framework, and at this time, Bitcoin rust SPV light nodes were realized.

During the period from 2018 to 2020, Bitcoin SPV light nodes were integrated into Substrate’s Auto + Grandpa BFT consensus, and Polkadot’s governance module was used by BTC SPV light nodes. At that time, ChainX had achieved more than 100,000 BTC cross-chains, but the industry’s hot spots and narratives at the time had not yet focused on BTC, and ChainX did not achieve the expected development.

In 2021, the BTC network experienced the biggest upgrade since Segregated Witness (SegWit) in 2017—Taproot. The main features of this update are the introduction of Schnorr signature algorithm + MAST contract + the latest BTC script technology, each of which increases the privacy, scalability and composability of the blockchain.

BEVM has sensed the future of the BTC ecosystem, successfully registered and obtained the patent for BTC Taproot around 2022, and shaped BEVM's Taproot Consensus Layer2 technology through native Taproot technology. By this time, BEVM has laid a solid technical foundation for BTC's scalability and decentralization.

Since 2023, with the outbreak of BTC protocols such as Ordinals and Inscriptions, BEVM has seen the opportunities and needs of the BTC ecosystem and officially promoted it under the brand of BEVM. Its mainnet has been launched to provide services for 100+ BTC ecological projects.

2. Innovation of Taproot Consensus

Taproot Consensus technology seems to be an underlying technology created by the BEVM project, and currently only they are using it. This is a set of technologies based on the Substrate framework, which brings together the three major BTC native Taproot technologies: Schnorr signature, MAST contract and SPV light node network.

Specifically, Schnorr signature provides a more efficient and private Bitcoin signature algorithm, which can expand Bitcoin multi-signature addresses to 1,000 and realize the decentralization of multi-signature addresses; MAST contract realizes multi-signature management through coding, which can improve network security and privacy; and SPV light node allows users to verify payments more conveniently.

Therefore, Taproot Consensus not only helps to improve the scalability and privacy of BTC, but the BEVM network can also ensure the security of on-chain transaction assets. In addition, BEVM also has a unique positioning in technological innovation, such as combining the privacy communication protocol Signal.

3. BEVM Stack: One-stop solution

As a new technology stack service, BEVM Stack provides a one-stop solution for the deployment of BTC Layer2. By integrating innovative languages ​​such as EVM, WASM, Cario, and Move, BEVM Stack enables BTC to be linked to various blockchain technologies, bringing a safer and more efficient solution to the ecological construction of BTC. As mentioned in the BEVM white paper: BEVM Stack aims to deploy BTC Layer2 for developers and projects in an easy and low-cost manner, so that more projects can fully enjoy the security of Bitcoin network consensus and the convenience of EVM deployment applications.

In addition, BEVM Stack can also integrate multi-chain blockchain technologies such as Zkstark scalability, XCMP, and full-chain message protocols such as LayerZero and Wormhole, achieving seamless integration of BTC with other blockchain technologies. The launch of this one-click solution is exactly the same as OP Stack, and BEVM will mainly promote its Taproot solution to lay the foundation for the subsequent widespread application and construction of BTC.

4. Make BTC a "full-chain asset"

BEVM technology provides a new solution for the full-chain circulation of BTC's decentralized assets. Through the transit of BEVM, BTC can achieve full-chain circulation to any blockchain innovation platform.

Currently, BEVM has been able to achieve low-cost and fast BTC cross-chain through its ecological application OmniBTC, which supports many underlying protocols such as LayerZero, Connext and other arbitrary cross-chains. BEVM can integrate various full-chain aggregation liquidity protocols, as well as full-chain interoperable message protocols using LayerZero and Wormhole at the bottom layer, providing users with a wider range of asset application scenarios.

Although the technical logic behind it seems complicated, BEVM allows users to understand that they only need to use BTC as Gas to complete any interoperability experience with major innovative chains, such as ETH, SUI, Starknet, OP, BSC, etc. Analogous to the World Wide Web on the Internet, users only need to enter a domain name to access any network connected to www. Tens of thousands of chains are interconnected, and all blockchain technologies and BTC, a decentralized currency, are integrated.

BTC Layer2 is surging

Looking at the development history of BTC Layer2, many projects have shown extremely rich technical details and unique market observations, but the author believes that the emergence of Merlin and BEVM is just the beginning.

Back to the original intention of Crypto, looking back at BTC, the first and most famous cryptocurrency, has completely changed the landscape of traditional finance since its launch in 2009. With the first approval of BTC ETFs by the US SEC last year and Hong Kong's approval of BTC ETFs last month, terms such as decentralization, DeFi, GameFi, and cross-chain have become less niche.

As developers and the wider community continue to innovate and adopt new solutions, BTC Layer2 solutions will play a key role in creating explosive applications in the future.

We are standing at the cusp of a new era, like a ship setting sail. With the promotion of technology and the excitement of the community, we will witness more innovations and breakthroughs in BTC and Crypto in the future.