Layer-2 of Bitcoin: launched the testnet of Bitlayer Finality Bridge

Today, the testnet of Bitlayer Finality Bridge is launched, a Bitcoin Layer-2 solution based on the BitVM paradigm, and its trust-minimized BTC bridge aims for integration into DeFi.

The Layer-2 of Bitcoin

The base blockchain of Bitcoin, the one created by Satoshi Nakamoto in 2009 and today called the “Layer 1” of BTC, has very limited functionality and evident limits regarding scalability and versatility. 

For this reason, over the years, several Layer 2 have been created, which are based on Bitcoin’s Layer 1, but at the same time have many other functions and, above all, highly developed transaction speed and cost-effectiveness. 

Even Ethereum now has many Layer 2s, moreover, they are decidedly more used than the Layer 2s of Bitcoin, but perhaps this is due to the fact that the Ethereum network and its Layer 2s are widely used in DeFi, where instead the Layer 1 of Bitcoin is practically not used, and the Layer 2s are used little. 

Bitlayer Finality Bridge

The Finality Bridge by Bitlayer addresses some critical security and trust issues encountered in previous generations of BTC bridges. 

In particular, it leverages the power of smart contracts and BitVM protocols to allow users to mint Yield BTC with minimal trust assumptions, and enjoy integrated returns through staking, liquidity mining, and lending, within the Bitlayer ecosystem and on other blockchains.

The Finality Bridge by Bitlayer promises security with trust-minimized, native yield generation, and cross-chain programmability. 

Security with trust-minimized means that they promise there is no need to trust centralized custodians or distributed groups, as the bridge is based on transparent smart contracts. 

Native yield generation means that Yield BTC offers integrated yield mechanisms, with the goal of transforming Bitcoin into an asset that actively participates in DeFi activities.

Cross-chain programmability allows Yield BTC to integrate with EVM-compatible chains like Ethereum.

Bitlayer: the new layer-2 of Bitcoin

Bitlayer is a Bitcoin Layer 2 solution based on the BitVM paradigm that aims to achieve scalability on Bitcoin without compromising its security.

Aims to offer security equivalent to that of Bitcoin’s Layer 1, with BTC bridging with minimized trust, EVM compatibility, and unlimited throughput. 

In addition to the bridge, he has already created Finality Stack, a dedicated verification layer for Bitcoin, and RtEVM, a high-performance transaction processing engine. 

I bridge BTC 

The Bitlayer Finality Bridge testnet is already available for users to test and experiment with the minting features in a simple environment. 

This initiative is part of the broader context of the evolution of Bitcoin bridging technologies. Over the years, BTC bridges have made significant progress, but they were generally based on centralized custodians, and therefore, while being simple, they involved significant trust-related risks.

The second generation of BTC bridges introduced distributed custody, but the BTC were still locked on addresses controlled by groups of entities, albeit selected randomly. 

The third generation, on the other hand, is precisely based on smart contracts, with a minimal reduction of trust. The BTC are locked in addresses controlled by a BitVM smart contract, eliminating the need for centralized or distributed custodians, and relying on the intrinsic transparency and verifiability of the smart contract. 

The Yield of Bitlayer Finality Bridge

Finality Bridge promises to ensure a strict 1:1 peg between Yield Token BTC and real BTC.

The Yield is based on an integrated market through which Yield BTC provides native returns based on staking, liquidity mining, and lending.

Furthermore, the bridge supports multiple blockchain environments, such as Bitlayer and Ethereum, allowing the token to flow and integrate across different programmable blockchains.

The Yield BTC token is not a liquid staking token (LST).