Top Bitcoin Layer 2 Projects

Among Bitcoin Layer 2 projects, Lightning Network is a famous name to all traders. Operating on the Bitcoin blockchain, the Lightning Network (LN) is a crucial “layer 2” payment mechanism. LN aims to make transactions quick and inexpensive. It seeks to address the scalability problems with the core Bitcoin network by enabling transactions to take place off the main blockchain. All these steps would speed up processing and cut expenses. To accomplish this, the LN sets up payment channels between users, allowing them to exchange money indefinitely without recording each transaction on the blockchain. Transaction efficiency is significantly increased because the Bitcoin blockchain only records these channels’ opening and closing balances. 

The Lightning Network has grown and developed significantly since its founding. Notable developments include introducing technologies like Wumbo Channels and Keysend in 2020. It greatly enhances the network’s capacity for larger transaction sizes. The LN ecosystem currently spans several sectors, including gaming, payments, wallets, node management, and infrastructure. At the same time, it includes a vast array of products, initiatives, and solutions. 

The network’s potential throughput of up to 1 million transactions per second (TPS) is theoretically higher than Bitcoin’s main blockchain (7–10 TPS). This highlights the network’s significant growth potential and its role in facilitating Bitcoin’s improved functioning as a peer-to-peer electronic cash system.

The top name on our Bitcoin Layer 2 projects list is MAP Protocol. MAP is a peer-to-peer, layer-2, omni-chain infrastructure for Bitcoin (BTC) based on ZK technology. Using the Bitcoin network’s security mechanism, the MAP Protocol fortifies network security and functions as a Bitcoin layer-2 blockchain.

The cross-chain network of MAP Protocol operates peer-to-peer without using an intermediate. Developers may create personalized Bitcoin L2 solutions easily. They should integrate different Bitcoin L2 components over the MAP Protocol. Thanks to this, users now have total control over their assets and data throughout the blockchain ecosystem.

The Bitcoin network provides security for RSK (Rootstock), a platform for global smart contracts. All Ethereum apps are now interoperable with the Bitcoin blockchain. The reason is the migration of its smart contracts from Ethereum to RSK. RSK produces new blocks considerably faster than Bitcoin, which takes 10 minutes at around 33 seconds. Additionally, RSK processes 10–20 transactions per second on average. This is quicker than the five transactions per second that Bitcoin can handle. The mining method used to obtain these RSK blocks is “merged mining.”  

Through merge mining, RSK can validate transactions, create blocks, and submit them to Bitcoin. Thanks to this mining technique, users may be confident that RSK’s smart contracts profit from Bitcoin blocks.

Dovi is an EVM-integrable, community-driven, and one of the top Bitcoin Layer 2 projects. It offers a scalable, effective, and safe innovative contract platform. Tokens like ARC20 and BRC20 are only two of the many asset kinds that Dovi supports. Moreover, it permits the implementation of Ethereum-created intelligent contracts on the Bitcoin network.

Like the Lightning Network, it functions as a layer on top of Bitcoin. STX aims to protect user privacy, maintain internet security, and lessen data breaches. The STX token, the native coin of the Stacks blockchain, is used for transaction processing and smart contract execution.

Stacks uses the Clarity programming language, which improves smart contract security and transparency. The protocol uses micro blocks for independent validation. Also, it ensures security using the Bitcoin blockchain. Through token-locking mechanisms, STX tokenomics are intimately associated with Bitcoin. These mechanisms facilitate network consensus and security and reward participants with Bitcoin

Since its inception, significant advancements have been made to Stacks. For instance, the Nakamoto release aims to strengthen the network’s connection with Bitcoin. This connection will allow Stacks users to write directly to the blockchain.

The CKB coin offers significant investment opportunities. It is utilized for resource management, transaction fees, and network governance. Promoting CKB as a Bitcoin L2 solution can significantly boost its usefulness and demand. It will particularly help applications that want to take advantage of Bitcoin’s security. The primary function of the CKB token is to facilitate cross-chain asset transfers. The coin also seeks to function as a value store inside the Nervos ecosystem and operate as a stake in the consensus process of the network.

Another name on the list of Bitcoin Layer 2 projects is Liquid Network. A layer-2 solution for Bitcoin designed to increase transaction speed and anonymity is called the Liquid Network. It facilitates quicker and more private transactions by functioning as a sidechain. The usage of Liquid Bitcoin (L-BTC), which is pegged 1:1 with Bitcoin (BTC), is one of the main characteristics of the Liquid Network. Faster transactions within the Liquid Network are made possible by L-BTC. It lets users use the network’s improved features, like atomic swaps and confidential transactions.

As one of the Bitcoin Layer 2 initiatives, Merlin Chain integrates the ZK-Rollup network, decentralized oracle network, and on-chain BTC fraud proof modules. Through its Layer 2 network, Merlin Chain is committed to improving the native assets, protocols, and products on Layer 1.

With a market valuation of more than $500 million, Bitmap Tech is among the leading independent game creators. Its Merlin Chain product line is a subsidiary. One of the most sought after collections on Ordinals is the Bitmap Tech BRC-420 “Blue Box” line.

BVM Network tackles the scalability and smart contract issues with Bitcoin, putting it at the forefront of blockchain innovation among different Bitcoin Layer 2 projects. BVM makes it possible to create smart contracts, decentralized apps (DApps), and an endless growth of Bitcoin L2 blockchains via its Layer 2 meta-protocol. With the help of this project, Bitcoin can become a flexible blockchain environment that can support a wide range of uses, including gaming and DeFi.

The BVM coin plays a crucial role in the network by participating in governance, offering rewards for liquidity, and enabling different types of transactions inside the BVM ecosystem. Its deliberate vesting timeline and distribution guarantee long-term congruence with community interests and network expansion.

Using zk-Rollups, SatoshiVM is a decentralized Layer 2 scaling solution constructed on top of Bitcoin. In essence, it establishes an Ethereum Virtual Machine (EVM)-compatible sidechain that enables programmers to implement well-known Ethereum smart contracts on Bitcoin.

zk-Rollups provide a potent blend of security and scalability for Bitcoin Layer 2 projects. By processing transactions off-chain, these cryptographic proofs drastically cut down on gas costs and transaction delays on the main Bitcoin network. Simultaneously, zk-Rollups uphold cryptographic proofs that ensure that off-chain transactions are legitimate, so promoting security and confidence.

Terms like Layer 1 and Layer 2 aid in differentiating between several networks that are part of a single blockchain ecosystem. The core of a blockchain is a Layer-1 network, often known as a “parent chain” or “mainnet,” depending on the situation. In contrast, secondary networks constructed on top of Layer 1’s design comprise Layer 2 solutions.

A Layer 2 solution aims to lessen the strain on Layer 1 by utilizing its advantages over technological constraints. Hence, Bitcoin Layer 2 networks operate on top of the primary blockchain, mainly to boost transaction processing speed.

Layer 2 of Bitcoin holds great promise for the future as the ecosystem develops and becomes more inventive. The year 2023 has been historic for the Bitcoin ecosystem. The full implications are yet unknown despite how swiftly it’s all unfolding.

The potential for expanding Bitcoin has opened up incredible opportunities in the cryptocurrency. But the philosophical arguments will probably go on just as long as the experimentation does. 

Bitcoin is firmly establishing itself as the original blockchain technology with each new use case that arises. Soon, whole ecosystems, subcommunities, and platforms will run entirely on Bitcoin.

Since the much-awaited mining incentive halving on the Bitcoin network went into effect in April 2024, tokens linked to Bitcoin layer 2 solutions have done better than Bitcoin (BTC). For instance, according to data source CoinGecko, STX, the native token of the top Bitcoin layer 2 network Stacks, has increased by over 20% to $2.70 after the quadrennial halving decreased the per block currency issuance to 3.125 BTC from 6.25 BTC. After the halving, other layer 2 currencies like BVM and Merlin Chain have increased by 11% and 5%, accordingly.

The market is highly bullish and crypto enthusiasts are waiting for a long bull run in next months. 20 24 will be an outstanding chance for every trader to make money with crypto. Almost, no expert thinks a bearish run will happen and even all experts believe that the bullish run will be highly robust and long-ter. Some experts believe Bitcoin Will reach $100K.

Safely connecting Bitcoin with its L2 networks: Bridges are used by Bitcoin L2 networks, such as sidechains, to provide a resource-sharing channel between their network and the Bitcoin network. The conventional method by which these bridges function is through the use of smart contracts on the source and destination chains, which direct the locking of assets on the Bitcoin network and the sidechain minting of an equivalent. 

Nevertheless, there are recognized security and usability problems with this architecture. This type of bridge has been hacked, costing users billions of dollars in lost revenue. Although sophisticated bridge protocols are moving away from this strategy and investigating more safe ways to establish inter-chain links, the lock and mint setup is still vulnerable to a number of security issues. However, as of this writing, Bitcoin L2 initiatives continue to rely on such setups, raising possible security issues. 

The Bitcoin network’s proof-settling velocity and fees: A state channel or rollup isn’t finished until the main network has reached its ultimate resolution. For the L2 network, settlement speed and cost are important factors. Although Bitcoin scaling networks have shown to be successful, more advancements in this field are still anticipated. Notable efforts are being made to significantly increase the speed and affordability of L2 networks with the Dencun upgrade, as demonstrated on Ethereum. Developers of Bitcoin will need to put in a comparable amount of work if L2 networks are to improve over time.

Supported blockchains: The majority of modern blockchain applications, including DeFi, NFTs, and others, are supported by the Ethereum blockchain but not by the Bitcoin blockchain. Identical tactics are used in both networks’ Layer 2 solutions. After computing transactions on a distinct execution layer, each Layer 2 network delivers the result to the central network for settlement either instantly or after a certain amount of time.

The purpose of the blockchains: The goal of these Layer 2 initiatives is the primary distinction. The primary goal of Ethereum Layer 2 initiatives is to increase the network’s efficiency. This is only one of the two main goals for Bitcoin Layer 2 projects. Projects focused on Bitcoin Layer 2 aim to grow applications as well as the network’s throughput. 

Although the Bitcoin L2 projects are creating execution layers that run virtual machines—some of which are comparable to the Ethereum blockchain’s EVM—the Bitcoin blockchain does not yet operate a virtual machine as the Ethereum blockchain does. This gives the Bitcoin network the potential to function as an indirect virtual computer, enabling it to execute smart contracts and other applications that are characteristic of blockchains of the new generation.