Bitcoin L2s will take off in 2025 | Charlie Hu of BitLayer

Transcript

I think the whole orinal really brought a lot of new users and interesting trading volume an interesting energy of let's made another attempt to build things on bitcoin but the community of Bitcoin ecosystem is so huge and so diverse there's going to be an another one or two years back and forth to discuss and Define this problem statement should we have this exessive Bitcoin programmability and which route we should take it's a competition of Technology but more importantly it's a competition of E system in terms of TV unchain transactions you use cases and also the you know all the composability [Music] I'm here with Charlie co-founder at bit

lay big Lair is a L2 solution for Bitcoin that achieves turn completeness and uses bit VM hi Charlie how are you hi Sebastian hi thanks for having me yeah thanks for coming on so we met just a couple weeks ago and you were telling me about bit layer and like Bitcoin and Bitcoin l2s is not a topic that we've covered a whole lot on this podcast uh but I'm meeting more and more Bitcoin um L2 Founders and people building in the Bitcoin ecosystem and I want to get you on to get a broad view of bit layer uh the Bitcoin L2 ecosystem as a whole how you see that and um and also bitm which is an important part of your stack so you know before before we get started

here um like your your history and crypto goes back a couple years you were a contributor at at tasos and polygon and polka dot mostly working on I think like marketing and community building and develop operations in Asia um coming from that uh kind of part of crypto you know how did you transition into Bitcoin and working on bit yeah thanks for asking and once again really appreciate to be invited on this podcast um I think back to the to straight to your question uh a very pivotal moment was AOS so for the people who don't know a know it was a protocol came up by the person called Casey who was active Community Builder um you know Bitcoin at Dev um it was because of the bip 430 uh

in 2021 you know Bitcoin had an upgrad with tap assets so it's a new wallet type within Bitcoin which allows people to put data on Bitcoin natively right and then AOS basically is interesting simple protocol that allow people to write Json Json data on on the sets and then basically people start talking about the native Bitcoin nfts which is now just a metadata on ethereum and then you have the ipfs kind of thing with nft stuff on ethereum it gets me excited you know interested because there was the time there was not not too much Innovation going on doing the bare Market obviously you mention about my my my my kind of web Street career I get involved with uh ethereum that's how I

drawing the crypto web fulltime in 2015 and I was very involved with pokka ecosystem building ecosystem Asia for them as investor for almost three years and I getting involved with a polygon and tesos in the last cycle of Bo Market in 2021 it was pretty interesting and learned a lot about nfts I consumer facing application across web stre gaming and metav and so on um but obviously quite a lot of um narrative died down due to many other micro reason obviously 3 FTX really make things pretty bad and Market sentiment was was not good at at the time a lot of ether MTS and assets really was was kind of um become Obsolete and even dying and but this interesting audence protocol really

gets me excited and inspired what we could potentially create a lot of interesting assets natively on bitcoin Network right that was interesting and that it was a pretty big flood of like the whole Bitcoin Divi summer kind of Vibe back so that was early 2023 so my friends was actually using their Bitcoin full node inscribing all allies and then people started talking about okay the indexers the you know ainal assets uh we start educating what is ainal to the Asian Community I was on t space almost like five times a day talking about all those all the Bitcoin primitive like the whole new thing called Bitcoin primitive like bc20 arc2 SRC and then later on bid map resets all these interesting stuff

onchain on bitcoin or what so that's there and there was a lot of utxo being generated some we could argue is like Bitcoin garbage utxo because Bitcoin as a network is it's it's cash toach like P2P Cash System right with with utxo model so whatever utxo you generate it's doesn't really have this burn mechanism so we have like all this crazy gas fee of Bitcoin we're paying to doing some crazy mint obviously was we had a lot of fun meting and I I made some interesting return on that as a Deen as a Trader but the more I've been doing that and also talking to other community Builder and also interacting with Bitcoin deaths the more we realize okay this is not the future of Bitcoin at the end gate we

need scaling Solutions uh you know when we when we talk about okay Bitcoin def5 or Bitcoin def5 Su we can't really do that with the lack of Bitcoin programmability on layer one so that was kind of the gradual evolution in the last in 2023 like from March to September that was kind of gradual Evolution the more we deep in the rapid Hall of AOS and Bitcoin when you know all this interesting stuff the more we feel like we need a scaling Solutions so the second pivi moment for me to really deep dive to really Inspire myself to really deep I'm working on the research about BBM and also B bitco Skilling ins solution and our2 was oral Summit in Singapore so September 12 that's that's

where I met uh Domo and Casey in person they talk about the whole interesting crazy Journey about B 20 and AOS obviously a lot of onchain assets being generated on bitcoin Network and a lot of attention in energies where you know move back from all kind of altcoin ecosystem back to bitcoin which was cool uh but of course a lot of garbage EXO been generated and then and we will start basically have a takeaway after conference like we need scaling solution around Bitcoin we need to let all these crazy social experiments move outside of Bitcoin L1 to other meta protocols side chains or l2s so that was that a main takeway for me and then maybe for other people who attend the events as well and

coincidentally BVM solution which you want to talk about um they came out as as a white paper in early October last year so the person one of the Bitcoin researcher called Robin Linus he was deeply involved with stock Weare and a few other kind of ZK research and Bitcoin engineering groups so it was more Community kind of a open source kind of approach they have interesting concept ideas so Robin actually put this together as a white paper it got a pretty interesting momentum in the community on Twitter I start reading that as well together with with many other people who get interested so they started the BBM community in telegram so we were kind of early members to join as

a as a reader and I start reaching out to a lot of people I know actually understand this in in a deep level especially ZK growups and so on and that's how I reconnected was Kevin my co-founder and we know each other since 2021 when I was in polygon he was head of engineering HBY building the chain called hecko which was an ecosystem chain for the HBY ecosystem they had a pretty successful run as well so we know each other at that time and we have a very aligned technical Vision about you know how bigcoin ecos should look like you know three parameters basically one is the the trust minimized Bridge which we're working on launching with a BVM approach second is Lay one verification so the key that's a key difference

between Bitcoin side chain which doesn't have the Bitcoin finality and Bitcoin native R up which we're working on how is Bitcoin A1 verification and the third thing is high throughput high performance VM right obviously now with evm it's old technology which been batt tested in the last eight years but we want to scale the you know to or L2 INB to a higher level and so we we working on this virtual like realtime BM which Mega E monad and many other interesting new infrastructure solution providers actually working as well are three things right and obviously there are some other things which is very important as well as to Define as a real Bitcoin L2 such as the data availability on bitcoin and all that so um so Journey the Jour journey of Big

Bill L start last November and we started as a research group and obviously the hype of b os Babylon a few other projects really you know catching up the momentum really inspired us to really start full-time working on Bill lay as well we start fundraising we start talking to a lot lot of investors Builders we get an interesting momentum early this year uh especially after Satoshi round table and East Denver and we get a pretty interesting round on SE it we launch a v V1 M that in early April to get our white paper and yeah so we start the Journey of buauty ecosystem so long tldd about talk about our traction statistics bit later on the V1 mnet we have over 24 million

transactions already over 260 projects deploy our our mainnet and at least like 50 of them are very active a protocols some of them actually have a pretty pretty successful fundraising as well uh a few assets already meant the token assets on our chain and we're getting close tog as well now we are just finishing up the bance wallet campaign we as a chain we're making profit as as we speak last month we made a 650,000 gasv revenue so we're profitable as as as as a business this month we expecting around over six 7 million 700,000 gasby Revenue um well we are very focused on Defi and so it's a Bitcoin defi focused EOS system with

pretty much all kinds of B def5 Primitives but we we general purpose chain we open all kinds of new ideas so recently talking to all kinds of AI agent some interesting NE primitive cool um thank you for that so like you talking about scaling a little bit um you know coming back to this uh this this this shift around the Times the time ordinals uh you know took Center Stage you know I I think looking back at the at the Bitcoin scaling timeline it seems to me maybe with some exceptions of maybe like counterparty and color coins it seems to me that a lot of Bitcoin scaling uh conversations that were happening up

until just a couple years ago like 2022 um were focus on bringing scalability on chain so increasing the block size uh things like segwit uh improving signature schemes Etc to bring scalability on the Bitcoin main chain and there there was a significant shift in bu building scalability offchain with l2s and and reaking what what was the Catalyst do you think for that and um from someone who's kind of like outside of the Bitcoin uh ecosystem you know how is that change being perceived received by like Bitcoin core developers and those who have kind

of been around that previous wave that previous cycle of you know trying to scale Bitcoin like in 2016 and and in our and and even before that 2015 yeah I I think we we it definitely we're not the Bitcoin codf we don't actually maintain the code uh I wouldn't claim I'm even Bitcoin laser eyes or Bitcoin Maxi with my track uh with my kind of humble experience in the web Street space I was more like a East guy I you know you know focus on ethereum you know EVMS environment EV ecosystem you know with ethere L tools like polygon and others but uh I think the whole AAL really brought a lot of new users and interesting trading volume an

interesting energy of let's have made another attempt to build things on bitcoin right when creating assets around Bitcoin Network and obviously a lot of assets were created in 2023 during the AO season so BP 430 of this taper assets really is has I I would say is one of the main catalyst right this happened before that um Bitcoin as native wallet address has not too much things you can actually export and besides lightening has you know this uh cheaper way you know through State Chanel of payments uh not too much things actually happen right you know the the previously was all like just a bunch of Bitcoin side chains um you know with the kind of the multi kind of trust

assumption model of bridging to do things um there was not too much interesting assets you can actually explore um so for us we see a lot of interesting traction happen on ethereum with D5 Su 2020 right and also oft assets so for me when I look at ecosystem because I built ecosystem last eight years it always come from Technology Innovation or some interesting material protocol upgrad which allow asset creation become very easy and actually we have because of the assets creation there's a lot of new narrative play around right people wants to explore the new of token mechanism the new of tokenomics a new of use cases Bitcoin because of the nature of the

utxl model it's being the the most decentralized you know Pro work secure network it's always kind of been Cony with like seven you know 7 TPS it's not you don't you can't really do that much with Bitcoin right so Skilling solution is always there you mentioned about a lot of interesting historical kind of attempt and we actually list that in the website as well um all these a very important attempt in the history but I think OS really become a very important Catalyst and bring actually real users right and real people who actually we need to pay fees some are even premium fees right of their hard earned Bitcoin to that uh for the Bitcoin C in the beginning a lot of people including

especially Luke right the one of the the codev he was very a big Nayer like he want to really Wipe Out the entire or protocol which was a huge debate between the you know ecosystem and you know the Bitcoin call some of them actually was like okay let's be safe let's Wipe Out the whole thing keep Bitcoin lay one clean for people actually had a lot of interesting enjoyment right and I also had a good return with AOS they were really really panicking they were like okay this is not this is crazy and obviously the nature of Bitcoin Community is very decentralized right so it's not just one cor Dev saying something you know the whole Community have to follow him so it has to go through a very rigorous voting system or

S so I mean it's also another side effect right anything any fundamental Bitcoin L1 Innovation operation it takes normally couple of years it's very slow it's a lot of back and forth and debate even sometimes talk and whatever but it's also very needed right the whole beauty of decentralization or liberal free market in Bitcoin really by me I re trapped me because unfortunately on ethereum in the last couple of years it's become more and more bureaucracy even decentralized with ethereum Foundation doing a lot of the things in the agenda right e Bitcoin is different so I think there's still a lot of Bitcoin ecosystem Nays sellers the people who just hold Bitcoin in last 10 years doing nothing some of them don't

really even do Bitcoin money anymore so they actually don't get additional um feed rewards right doing the whole ainal uh Renaissance whereas some miners we've been talking a lot of miners like B main B deer an Alpa fer a lot of the mining companies actually they do know oros because they earning additional fees quite a lot last year so they're actually the economically the benefited right so they are kind of estab establishing some interesting efforts and campaigns to things that will on bitcoin right like especially like maratha which is a very major institutional us-based mining Farm which is publica dist right they actually set up like uro which is a Bitcoin scaling Bitcoin side chain

platform so I think the mining Farm is actually now getting ready and educated themselves already to to explore all the things around Bitcoin ecosystem on the other side there's a lot of new type of Builders who are not necessarily Bitcoin ogs including myself I don't even call myself Bitcoin OG although I've been holding Bitcoin for quite some years um the build things in other ecos and they see the frustration and also other ecos but they see them the most important thing they see the huge potential of unlocking or activating a huge amount of liquidity uh with the Bitcoin assets over 1.5 trillion now right uh it's a it's a huge opportunity for them to tap into the Bitcoin

liquidity and to do interesting Bitcoin defi stuff so that's kind of the whole energy for others outside of the indust ecosystem to really entering this party and really make this like small Echo chamber of Bitcoin OG Community bigger and a more diverse I think that's something what happened in the last 18 months and that 18 mon has been a very important and New Movement uh compared to last 10 years yeah yeah looking from the inside like what what is the level of interaction if any um between Bitcoin l2s and the core devs so like when you guys are you know we'll talk about this later but like you guys are building this op VM which

um is reliant on some core some upgrades to bitcoin core you know are are it do Bitcoin l2s have any weight or um is is there any sort of legitimacy to their claims that like Bitcoin needs to upgrade in order for us to do this and like H how does that interaction work with the core devs and the and the L2 ecosystem thanks for the question um in as I mentioned Bitcoin ecosystem has no sort of like quote unquote King there's no vitality an ethereum foundation and one person say whatever doesn't really means the community have to follow him and you know we have a god called katosi but he's disappeared right we don't necessarily have to follow aodf so that's something like that and

obviously Bitcoin L2 are also new none of the Bitcoin out to have over two years kind of their history right most of them started last last year in 2023 including ourself uh but um traction talks like the the the level of liquidity or level of tvl bring some m u move some needle but that don't really I wouldn't say it's enough and sufficient enough to really carry the the weight that we can push any proposal single-handedly by ourself so we are very aware of the fact we have to be humble we have to work together and obviously debate properly discuss properly with all the other Bitcoin ogs Bitcoin CS mining farms and all that

right so bid layers things 2024 and today actually 2025 now right um 2024 we sponsored all the Bitcoin magazine conference Bitcoin magazine utxo management is also our C investor we've been talking to a lot of Bitcoin OG like Nick zabu Adam back Peter Todd a lot of those major Bitcoin OG who have been building things around Bitcoin over 10 years and a lot of Bitcoin mining farm right as I mentioned B May npol and ala bit deer Foundry this goes on we've been talking and you know exploring and also just checking how they think about different things um pretty much was across all the mining pools all these mining pool right actually have huge weight but as at the end of the day

they're also not a they're not like a Pioneer to one to pushing one thing in the agenda so if you asked me the same question six months ago I would say upcat definitely will have a very interesting High chance to get approved maybe this year in 2025 especially after talking to like Capital wizard guys like they have being very very vocal and actively pushing this but the more I've been talking to all the other different type of Bitcoin holders Bitcoin ogs even some Bitcoin CS the more we feel like okay this is something very interesting but it takes time to really have the upgrad so the answer of bit layer actually single-handed moving this proposal I don't think it's it's possible we have to be very humble we are just one humble

contributor who are building up doing our thing try to make some contribution but the community of Bitcoin ecosystem is so huge and so diverse there's going to be another one or two years back and forth to discuss and Define this PR statement should we have this expressive Bitcoin programmability and which route we should take is is this going to be upcat is going to be CTL is be others different people have different opinions they sometimes have a very heated conversation debates online but it's all needed um for us to have this design choices of using BBM you know approach working on this Chun Cent model of ziki stock know verifier is based on the Assumption Bitcoin it takes time for

Bitcoin I want to have any upgradation we might see no upgr of soft for at all in the last in the next two years even four years so with that assumption what we could do to just slightly move this ahead right so BBM the beauty of BVM is that it doesn't really depended on any upgrad on bitcoin it using the it's basically using this the existing Bitcoin up code to create this kind of a largic gateway to do the D trust minimize bridge to do the verification that's the very important piece of the piece of element I think it's really interesting which is very permissionless we don't actually get any approval by anybody right but obviously

that's like kind of community consensus we try to get from you know cultivating the culture educating the community and so on so up to this moment BBM uh biller we also one of the official BBM Alliance member recognized in the website in the BBM or um together with a few other respected competitor who are doing different approach um yeah we are still kind of in the progress launching our V2 which is one two months away from actual code get getting open source the test is already launched uh last month uh last week so far so good we're just opening for all kinds of code AIT you know you know internal test and so on and unboarding new protocols to use

our V2 mainnet um but yeah I think it's all work in progress I don't think there's a very clear conclusion this is the past everybody will follow and it's also very kind of leing by doing kind of community The more I've been talking to all these Builders the more I feel like okay it's a very interesting Dynamic it's always kind of competitor PL plus friends as well yeah yeah um so can you explain how a bit layer enhances Bitcoin scaling and um just looking at it from a high level and like how is it different from the competitors you mentioned some of these uh competitors and and I think you know

I would include in that other Bitcoin l2s uh and and also Bitcoin reaking I think you competes with bit lay at least for liquidity maybe on the approach and the vision look different but um yeah how does Bitcoin hardest bit layer enhance Bitcoin scaling yeah so I will start from the tech P technical side and then maybe Deep dive on other other elements as well on the technical side I think the whole Vision ability is trying to build native Bitcoin L2 not just side chain so this actually the the the the definition of pcoin L2 become quite bit broader after the whole Renaissance of like AAL and so on right especially the crazy hype early q1 last year so lot of side chain actually start calling themselves

also L2 as well so biler with the BV approach we've been very focused on achieving the native Bitcoin L2 with Bitcoin settlement Bitcoin finality and then TR minimize Bridge these are the key components right so the three things we three Solution on the infrastructure we're working on one is the trust Mass bridge to lower down the trust assumption from the majority honest of NPC solution to one out of TR Assumption of BB and Bridge kind of model that's that's the part of we are launching uh the test version already launched last last uh last Friday and we're getting to towards open source code launching the V the V2 meain Elation the second part is very important which is Bitcoin settlement right the Bitcoin verification so

Bitcoin verification the the key difference our approach compared to a few other Bitcoin L2 is we are doing the ZK stock appro uh Z stock verifier and the reason we choose ziki stock from by over ziki SN is stock stock proof is more C uh the cost is more stable it doesn't really Vol volatile I know we have this new innovation called a chunker which we am we able to lower down the cost of the ziki stock proof to 10 times smaller to divide to smaller pieces and eventually it can be settled in the the tap tree model it's almost like a recursive inscription so that's the way we without actually sacrifice the security level of

proof we're able to achieve the you know the verification was 10 times cheaper on on on the cost we all know Bitcoin space Bitcoin blocks is pretty expensive and you know have the same level security but a low much lower on the cost is very important that's kind of the another part of how we unique our approach um I mean the third part is Da right data availability I think some interesting research reports being written by Galaxy Ventures or Galaxy research they mentioned about you know da right there a Bitcoin L1 SDA obviously it's more secure but of course very expensive B te we don't believe it's very long-term sustainable to just put all everything single that

availability on d da stuff on bitcoin1 so we have this like a hybrid model you know for people who mon whales they want to have a high level security they can still choose to the bitcoin1 Asda but we also work with CES and a few other kind of Bitcoin align da at the third parties for more smaller transactions so we always try to be practical to use you know be aware of other the limitation but achieving practical engineering sound kind of approach and also make sure it's lower cost so for other competitors uh I think for the side chains big bill is more is native Bitcoin L2 we not just side chain compared to other Bitcoin l2s and like native l2s we have a more kind of lower

cost approach compared to their approach uh that's so these are kind of this you know the kind of technical um you know differentiation right on the non technical side I think the strategy we take was also very interesting so we started from V1 model right uh which is uh a pro St side chain to booster ecosystem and actually with that we have we've been actively finding our product Market fit by working and cultivating a lot of interesting use cases together right compared to many other our2 competitor we have many much more and protocols buil on our chain with users actually you know when a unique wet addresses actually doing interesting things in the use case on our ecosystem

so this community and ecosystem has been a very important intangible assets which is very valuable so while we are launching our V2 we have the uption some our competitor will has way less smaller community and use use base than us and at the end of day I think it's it's a competition of Technology but more important it's a competition of ecosystem in terms of TVR on transactions in use cases and also you know whole all the composability I think that's the part BL has been doing pretty well being one of the fastest growing Bitcoin layout 2 ecosystem um yeah I think we want to keep growing and keep educating the community what what does it look like right all the Bitcoin Defi and also

really just helping all these Builders of Bitcoin defi protocols because at the end of the day their their success is our success Why by having some successful sound Innovative Bitcoin defi protocol our ecosystem that can justify uh our our success and value of our ecosystem yeah how does spitler TBL compared to some of the other uh Bitcoin l2s I think right now you guys are sitting at somewhere like 300 million um and you know in the so yeah so so we were number one on defama and so the data including all the reaking all the other kind of programmable Bitcoin together at this moment we are over 718 million tvl um on the website you can see it um then on

defama there's on the on the chart there's like different kind of column you can you can click uh with this the second biggest where second biggest one on the TV ranking on defa Lama this this the first biggest one is codal obviously codal is respected competitor they launch a token 20123 obviously by having a token on major exchanges it's helpful for them to incentive ify some liqu provider which we might consider to do something similar but uh we want to be careful with our dilution after tge um so yeah during this summer we were number one on Def def Lama now we're number two um yeah I think at the end of the day tvl

is a very important metrix but it's not the only metrix actually matters um there's three type of TVR we also be emphasizing this across different panels and spaces as well there are real TVR organic TVR being actually used on real use cases on the on the protocols on ecosystem that's the ones we want to go for right you know from the TVR from the retail the TVR from the users and and all that right the gr providers the second type of TVR which is called a real tvl but actually Idol made by you know just basically putting the sticking in some kind of a multi vault in some in some chains Z the TV are kind of just not doing that much so it's kind of a waste of capital in a bit right

obviously they are the third type of TVR which we call this like semi fake TVR so a few other some other l2s kind of do some kind of their self- created kind of Bitcoin assets they claim as a TBR as well obviously that's not like native Bitcoin or other kind of real assets being real social adopted and recognized in the in the community so we don't consider that as a real TVR the TV actually matters at the TV are being used on ecosystem on use cases so bil going to keep focus on that another the second most important metrix is unchain transactions for that part I think we've been growing pretty fast uh we have each day on average over 150,000 to almost 300,000 transaction per day so we want

to really cultivate a an important Community who wants to use our chain for whatever various type of use cases and creating this kind of trading on trading Community uh and know for staking for Lending for per deck for option trading all that kind of things I think that is actually is very important to have sustain sustainable and real organic yield for the Bitcoin holders yeah okay great I want to talk about bit VM a little bit and because I you that's a very important part of your stack and so uh you know I'm I'm not super familiar with like how bit DM works and how it compares to say the evm so you know could you explain this um how how

does it work with um how does it work within the the bitler stack um because bitler also has compatibility for the evm and potentially other VMS um what's it how is it different from from the evm and like what are the advantage of using BVM got it got it so uh one thing to clarify first um before I deep dive on some details BVM uh is Bitcoin verification H it's not Bitcoin virtual machine and so it's not like as like a Bitcoin version evm it's actually not it doesn't really does it doesn't do the same thing as like ethereum virtual machine so let me even I will zoom zoom back even further ethereum virtual machine was created by one of the major

car builder etherian Community called Gavin wood right who was a CT of ethereum he he built that in a V1 version was 2015 it basically is the kind of a setting Stone in pretty much over 99% of the you smart contract in ethereum ecosystem between ethereum L1 and l2s are all using the same framework kind ethereum ethereum virtual machine so we are even compatible the reason to be even compatible is the beauty of that is we by we can unboard a lot of defi existing Builders and protocols across all the ethere ecosystem on biler without asking them to rebuild from stretch they don't have to recode we are compartible to all the

existing web stre wallets which evm like metamask like okx wallet bance wallet all these we are intuiting similarly with the right so that's very important to onboarding new users and Builders from other ecosystem to us otherwise it's going to be a very big hurdle right some people will basically get turn off they didn't want to learn a new language new framework but bvn is the key module which set us different compared to other Bitcoin side chains so as I said Bitcoin sidechain doesn't have the Bitcoin settlement they don't have the Bitcoin finality meaning all the transaction ction is not settled back on bitcoin L1 so they don't actually contributing the security budget back to bitcoin L1 and Bitcoin miners whereas us we want to achieve the Bitcoin native layer too

right we need actually contributing the fees paying back to the miners through the whole verification process right so the whole verification is built by the bvn approach we started focusing on the trust minimized Bridge first so BVM to and also there's two things also to for people to know bvn as being a very important solution came up last October right so there's two version now the BVM 1 and the bbm2 BVM 1 was more general purpose and there's some problems they you know the community realize and then we have there's like news concept called bbm2 which came out last December and so far the whole community of BBM Builders

including us bil a team has been focused on B bbm2 and uh you know achieving the Bitcoin trust minimized Bridge so the key difference between the BVM Bridge which is more trust trust minimized compared to the NPC solution is the MPC multi Bridge require the majority of the sist no matter it's two out of three three out of five you know five or seven what what not needs to be honest if this the majority of signers are not honest it's let just minority then the assets go went through this bridging is not safe so let's say we have over half of the signers actually become malicious they get a compromised by hackers or whatnot

your assets actually can will be stolen through the traditional multi Bridge Approach so obviously for the people who want to bridge big liquidity from Bitcoin L1 to the l2s they don't feel comfortable right you know with multi approach in order to let them get them more comfortable and you know to to to increase the level of trust L the BVM bridge is the way to lower down the trust assumption to from majority Hest to one out out of own model so it's very important um we only need to assume during during this bridging process only one signer in the bridging process is honest then the bridging process is

secure so that's the transtion meaning our Bridge we don't claim it's 100% trust this we still have a trust assumption but compared to the multis bridge which is majority honest our assumption needs to be only one out of them so when we create this bridging process you know is a randomized kind of signer platform as long as we assume there one signer which is honest not every single siners have been compromised or malicious then our bridging process is secure that's a very very important kind of difference between the existing solution of6 so biler um you know the whole TR minimize Bridge we launching uh you know V vb2 very soon right and then the key

another components is Bitcoin verification which have been emphasized many times so that's the key difference between side chains on L2 sidechain has no Bitcoin settlement Bitcoin finality which they don't actually generating fees back to bitcoin L1 l2s is going to achieve the Bitcoin finality we need to pay the fees through our transaction fees back to bitcoin L1 through this verification model um the challenge of building this is Bitcoin L1 has no smart contract it's not built in right it's not ethereum and ethereum L1 there's like a row up a contract so doing this verification with the Bitcoin op code is quite an engineering

challenge so we're working on that with BVM approach which we're going to we we want to launch that uh the the difference obviously the challenge there everybody can we facing the same challenge so our approach which we are differentiating for others is our approach with our BBN our implementation we have this chunker model which we lower down the cost from one megabytes of ziki stock proof to 128 megabytes so which is like almost 10 times smaller so that's a very important thing to lower down the cost without sacrificing the security level um yeah that's kind of uh how we working on we using the BVM framework yeah so in natur the trust

minimized bridge and the Bitcoin verification okay so so BDM allows you to do a fraud proof uh where you have this like trust assumption that if if one signer is honest then you can you can assume that the transaction uh is valid and but you guys are working on I I sort of heard in your response there that you wanted do ability proof and so this is this op VM uh project you guys are working on but that is dependent on uh Bitcoin core adding some new features which is this this opcat um for those who are not familiar and I include myself in this group uh

what is opat uh and and what does it enable really it's a good question so opcat is not a it's not a new technology it's a it's it's not a new thing it's been in the community for almost like 12 years and from the very beginning this is one of those OP codes that Satoshi had disabled right and then people now want to reenable it he he initiated that and uh they just they stopped it it due to various kind of security assumption and all all kind of you know debates within the community um clearly after bip 430 you know the temporal assets more and more people start talking about the you know the upside of having up code to have

more expressive smart contract capability and programmability on bitcoin L1 and so the reason we have this like it's B by the way the op op VM is a mod feature is like a key feature or technical components it's not a separate project it's still part of the solution with think BB B we the reason we want to do that is we know later down the road the no upcat will potentially get approved we don't know when but it's a very high likelihood this going to be a you the community go to certain point we w't have more programmability on bitcoin L1 natively as well there's a lot of interesting vocal teams has been crazily

interestingly activating the community right and educating that we're not the most vocal ones but we obviously try aware of other Dynamics uh so we want to be future proof so op OPM is more like a hybrid model we combine the existing BVM approach together with the opcat and future approach so we're doing research about that assuming so could could you like explain sorry could could you explain how op like what what does opcat do exactly I think it stands for op concatenation it's like the concatenation yeah so it allows you to concatenate basically combine different pieces of script how does that enable validity

proofs so so the the one major C uh limitation of Bitcoin is Bitcoin actually doesn't really even have the multiplication and division right you know on the on on the mathematical level so we in order to achieve Bitcoin ziky you know validity kind of you know verification you need have the multiplication features and functions it doesn't really have that in the existing Bitcoin code so we need that to have that feature right otherwise doesn't really compile all those code doesn't really compile so Bitcoin Network cannot really recognize what it is this like ZK proofs and so on so we can't really have the with the existing

architect we can't really have real native ziky proofs on bitcoin so upcat the whole CET or the whole upgradation is trying to have that feature which is a very simple capability you know which is kind of builting on all the other DT technology or ethereum and so on but doesn't really have that in Bitcoin what once we have that we can achieve a relatively more native ZK proofs right so that's very important to open up that and obviously on the downside people have been discussing there's security vulnerabilities potential security vulnerabilities um once we enable that

that's the part we kind of have to say we don't know what we don't know until this actually get done and people just kind of now will play around with it uh even actually hack it so because of the fact it's just so much money and so much Stak on the on the plate uh the community has been kind of back and forth quite a bit um so it's a very important technology uh which is not that complicated to get upgraded but the the imple implementation and impact after that is pretty huge that's why we're still kind of in the process we maybe get that in within next one year or two maybe not yeah okay and you what uh Bitcoin OA they they did a uh uh a ZK

proof on bitcoin not so they're using a different um method to do this right like they're they're using tap rout or like is it is it like a less native way to do a ZK proof yeah they have they have a tap they have a index model and they use ziki St proof for that from what I what I understand they their approach is still following the BVM one version which is quite different from bbm2 um no we are kind of still waiting for their code to be open source so right now we can't really we we don't really understand and know what exactly their model um work um because it's not open source uh they claimed it's

achieved um so we also need to understand how much fees they pay you know to achieve that right you know is this actually economically practical to do that in a sustainable way so I think there's multiple team even like f and a few other team kind of claim they achieved that but I think there's always kind of pros and cons as well um to be honest we are kind of respected competitor we all learning from each other on the approaches as well yeah cool okay yeah thanks for clarifying that so there's you know some some trade-offs perhaps in terms of the cost in terms of the like different technologies that you're using and you guys are really trying to do a you know native uh proof on bitcoin uh at a cost that would make it economically feasible

for other l2s and you know and the ecosystem basically to benefit more broadly by having uh very secure very robust bridging between an L2 and Bitcoin yeah uh and while while having a solid Community right and also use cases of course yeah so talking about the the the community and the use cases uh yeah let's let's talk a little bit about defi on biter so what does that ecosystem look like right now and what are some of the things that you're excited about sure um defi is definitely one of our major Focus we're been talking at edting the community about Bitcoin defi for quite a while pretty much from the very beginning we when we launched the

B1 mainnet uh over 280 projects already deploy our chain uh we have a ecosystem leaderboards you can easily find in the bid layer .org website and so we sorted out the other protocols and the ecos project across top tvl top transactions and a top popularities that's kind of the three parameters we look at and to let people know how big it's Community how those protocols doing well right and we have different categories across Mo pretty much all the Bitcoin primitive across like stable coin dexes prep taxes option trading protocol reaking and obviously a lot of new like what assets protocols now try talk us as well uh we also we are open general purpose chain

so we are also openminded supporting nft Solutions some of the new Solution on AI agent dping as well but obviously they're kind of still a very early stage we have quite a lot of gaming projects they trying to explore mainting their gaming assets on bitcoin you know that kind of stuff but on Bild ler to make it cheaper um but at the end of the day our major Main strategic focus on use cases is defi We Believe Bitcoin defi has a huge potential with institution adoption of Bitcoin ETF right uh we are one of the first Bitcoin project invested by Frank Temperon the ETF issuer we're talking actively to all institution like cisana we also invested by them the major Market maker and trading

groups guys like Galaxy for S group laser digital qu institution has been tipping their toes having like Bitcoin exposure and actually doing doing Bitcoin staking and stuff some are still doing the CI model some are doing like cify like semi centralized model some are actually are doing pure D5 kind of way so Billy trying to be the go-to Bitcoin D5 ecosystem for them to tap into right when they actually want to get a like onchain native defi kind of yield um talk about defi yield there's like interesting amount of protocols we're trying to really really support there's there's quite a lot of interesting def yield protocol that uh I

have been growing pretty good big momentum uh one of them I should I should definitely mention is while number one TVR protocol kind of decent they have an interesting kind of cd5 model approach and also kind of a yield products they're offering all kinds of Bitcoin holders they grow to over 1.3 billion TV all together already cross chain you in biler chain we they have over 350 million TV so like a lot of interesting protocols I see good momentum a good traction um you mentioned about recking right recking of Bitcoin is definitely one of the most typed narrative so far with soft protocol just announced that they are going to list it on bance soon I think

later this month we're going to see uh a a wave of Bitcoin ecosystem project including ourself to get it in a listed all the exchanges and dexes in upcoming Mones so we will'll see interesting assets being being created a lot of programable Bitcoin will be tapping to all kinds of liquidity pools and you know start actually using people can trading and doing early yield around that yeah I wanted to talk a little bit about the the uh the Franklin Templeton investment and you broader institutional uh interest um you know what are the implications of of uh you know broad institutional adoptions of Bitcoin and do you think that there's a risk that

become that Bitcoin becomes too institutionalized you is is there a risk of institutional capture by Bitcoin um Bitcoin institutional capture um does that somehow place the core values and sort of fundamentals of Bitcoin at risk um yeah you curious to get your thoughts on that it's a good question um it's always certain things happen always have the pros and cons right you know Bitcoin ETF really being the major driver and a catalyst right when we to have all this bind pressure from the traditional institution tradify companies right that's basically arguably the the main driver why Bitcoin pumped from 20K to 100K within a year right um so obviously

it's good for the Bitcoin holders we have been Hing in the last so many years the new 100 billion P bu pressure and purchasing power from ETF has being a very important Catalyst while we talk about Bitcoin defi or Bitcoin ecosystem they people want to see bitcoin price chart kind of going up to together with onchain transactions going up it's somehow kind of correlated as well um some a lot of institution haven't really very active on defa yet but because of all these like interesting protocols invested by some of the institutions well you know I think the more and more are actually tapping into the space right we all know cd5 CI is not trusted

like it needs to be trusted it's not like trustless right the the sad things happen with celsus serero FTX Luna like let goes on right people don't want to repeat that right um so like that's there a lot of institutional entering the space with a with a awareness fully C5 model is not going to be something they only want to do they want to have a semi centralized kind always that very institutional grid custody such as crime-based Prime Anchorage and so on to manage some of assets in a centralized model but have kind of an onchain def5 protocols to sourcing yield you know actually doing trading as well which is self- custody so having institution to

entering the def5 spaces also is very interesting I think that's there's way more upside to having those institutional player to entering the space then downside by actually bridging new liquidity having bring new users to the space right the downside of risks as you mentioned it might be the case that uh the regulation you know especially the SEC right will actually start regulating and start actually requesting a lot of kyc KYB uh a lot of the decentralized def5 protocols that might be something which is concerning for a lot of the you know more like first first principle privacy driven Bitcoin holders right who don't want to go for pyc right they don't want the defi

protocols they actually need a key YC that wallets right being monitored by CH analysis and so on to do things which is a major turn off for a lot of the Bitcoin holders right especially OG users so there's a it's like a two- wave of things kind of handling right like wrestling as well there the institution Regulators try do more to do more like a CI model but they bring liquidity in the users right they they they do things in a way which they need a license they need a qyc qyb but they do their kind of mechanism which which certain institutional grade Protocols are doing that there's the other side which is more like d DJ or native users they don't like this they they they they

worship that privacy over many many other stuff right so for these people they might argue we don't need those institution to come right we don't want regular go after us because we don't want report to whatever authorities about certain transaction which is just a normal transaction right it's like reporting every single Transaction what you do on trading is just so troublesome and sometimes even make concerns that so I think there's a pros and cons but I think sometimes the industry have been involved to this level we are much more M mainstream adopted compared to like last two cycle having Institution New liquidity on body is definitely very valuable and

very interesting and then there's another perspective I want to bring as well like when people talk about a lot of Bitcoin ogs no don't want to do anything with Bitcoin the only thing they want to do just Bitcoin Hing Hing in their code wallet whereas a lot of new users and new buyers including those institution and Bitcoin you know each each ETF buyers these are the new Bitcoin holders right they want access to yield they want to tap to kind of use cases they don't want just sitting on their Bitcoin what they hold and doing nothing in the last in the next 10 years so it's a new type of users who might have different you know demand so those people actually want to access to yield and you know all kind of yield

opportunity no matter it's C5 model cd5 model or pure D5 model so we have the ecosystem focus on web stre native we want to provide all these use cases for those new users for the OG's on who have been neller they might don't want that right like they they they just for some reason don't want actually any they want to be a digital gold with no interest no yield at all it's okay but for the new users a lot of them have been asking okay I want I don't want to sell my Bitcoin how to get a yield and with some other trust assumption they they they want to sign up for right so I think that's the mission we want to provide as an ecosystem for those new users yeah interesting thank you um so yeah let's talk a little bit about uh some of the

traction and things that are coming up in the next uh little little while in 2025 so you guys um recently announced a partnership with Finance wallet and that has been pretty successful um where do you see adoption coming from from the retail side and how important are these uh are these Partnerships with um with you know the likes of binance okx Etc yeah thanks for asking um obviously everybody in the crypto space pretty much know what is binance right if they are wild largest Exchange in the space access to hundreds of countries it's most it's one of the biggest retail

adopted Exchange a lot of exchange users are centralized exchange users they trade you know they buy and sell Bitcoin all the other altcoins as well it's not a centralized way uh binance wallet whereas it's a separate web stre wallet they create by themselves with the uid model they actually have the Li and a kyc so we know what are those users because they're the binance users so the campaign really is a very important kind of education Catalyst to as a promotion c as well for anybody who participa in The Campaign which we have another four weeks to go to tap into all use cases to do trading to do all kinds of like onchain tasks they are able to get some rewards the token rewards from BTR our own B BTR token together other another

11 ecosystem project within bit within Bill layer to give those rewards so has it's make maybe not a most accurate anal analog but it's a it's imagine bil is building a big shopping mall it's like let's say a Dubai Mall like we all ecosystem project like a vendors within the mall right so we just open up the mall with all the vendors trying to sell the you know promote their their their products the services right now this binance campaign is like a special holiday season kind of Christmas season kind of campaign as a promotion we want to bring users let them educate them let them have a give them some rewards as a first mover and you know first you know adopter or the adopter some people will

stay some people might leave after the campaign finish but I think it's very important to really as a catalyst to bring more users to the Bitcoin space because we would argue Bitcoin L2 space is very very small it's it's being a small Echo chamber we need the more users we need the more Builders right so that's kind of the campaign we've been actively doing with major app web wets so we were the first Bitcoin EOS project we did it with okx wet on the cryptopedia that was 6 months ago that they brought over half many users to us half many wets uh with binance we launched the campaign two weeks ago so far we have over 600 users participants already hopefully we will achieve over 1 milon user in the next four weeks uh

yeah that will give us a very interesting traction and to attract more Builders as well at the end of day the builders who build defi user cases they want a user base they want to find product Market fit for their products as well right so we want to support them uh as ecosystem um obviously 2025 one of the major goal people all care about and they keep keep asking the community is tge right so we're going to launch our governance token BTR token which people can put into sticking become validator to access of gas fee Revenue sharing as a main mechanism of utility of the token um we are launching upcoming Mones obviously the exact date and the exact exchanges all decentral exchange we haven't confirmed yet but it's going to

be interesting to reward all the early adopters and also some of the key ecosystem Builders um because we been you know building the ecosystem since early since last April it's getting close to one year so I think it's time for us to launch the token to have a successful interesting ecos incentive programs and know into to keep growing the ecos system yeah cool well Charlie thanks so much for coming on the podcast it's been great uh learning more about bit Lair and understanding a little bit of the uh the technical implications and really diving into uh to bitcoin as a solution for securing loss of liquidity and bringing even more liquidity into

defi uh so thank you so much thank you very much the best yeah it was a great time [Music] [Music]