Author: Kevin Source: X, @kevinliub
If the demand for BTC to earn interest is real, then where does this "interest" come from? In particular, many people hope to obtain native BTC income.
Before answering this question, please follow my train of thought and accept the following assumptions:
Bitcoin L2 can achieve native security. Currently, we use the BitVM2 solution. There may be other feasible solutions in the future, but these solutions can achieve Bitcoin's native security at the L2 level.
Bitcoin L2 transactions are verifiable on the main network. When a challenge occurs on L2 and succeeds (that is, malicious behavior is discovered), withdrawals from L2 to the Bitcoin main network will not be executed. This means that the security mechanism can effectively prevent malicious actors from doing evil.
1 of N Assume that the Sequencer nodes of Bitcoin L2 are sufficiently decentralized and sufficient in number, and there is always at least 1 honest node. This ensures that your BTC can be safely withdrawn from L2 at any time.
(Pay attention, these are all test points!)
Based on the above three assumptions, Bitcoin L2 will have the same security as the Bitcoin mainnet. This means that BTC on L2 is equivalent to BTC on the mainnet and can enter and exit L2 safely and freely.
Before proposing the native income method, let's review the existing sources of BTC income.
Currently, BTC native income mainly comes from the funding rate of centralized exchanges. In essence, this income comes from putting your BTC into a centralized exchange and obtaining income through the trading process. Of course, not everyone is willing to put BTC into a centralized exchange.
When Bitcoin L2, which has the same security as the Bitcoin mainnet, is born, users can participate in the economic activities of Bitcoin L2 through self-custody. It is natural that:
Since the security of Bitcoin L2 depends on the Bitcoin mainnet, L2 should use BTC as the gas fee.
Bitcoin L2 has rich programmability and can support various BTCFi applications, so that BTC can truly circulate.
Bitcoin L2 should adopt a decentralized sequencer and introduce nodes that compete and cooperate with each other to avoid the risk of single point failure or "trust me, I won't do evil".
At this time, Bitcoin L2 has become a plug-in system that inherits the orange blood and genes of Bitcoin, absorbing BTC from the Bitcoin mainnet through the secure ZK Rollup bridge, and using BTC as gas fees.
Specific model of native income:
Users holding BTC can pledge BTC to the decentralized Sequencer on L2 through self-custody, enhance L2 security, and increase the probability weight of block generation. The control of BTC on Layer 2 is also in the hands of users, and they can unstake at any time.
The decentralized Sequencer returns income to the pledger through transaction fees, MEV and other income, forming native BTC income.
BTC holders who do not participate in staking can also obtain income through BTCFi products, such as liquidity mining, lending and options, according to their risk preferences.
It is not complicated to obtain BTC native income. The key is to build a plug-in system that can allow BTC to circulate.
The more economic activities in the system, the higher the income of BTC as gas.
This income is based on real economic activities, rather than simply relying on inflationary tokens or speculative mining.
As long as such a decentralized, secure and economically active Bitcoin L2 can be created, the problem of BTC native income will be solved.