Summary
Bitcoin is being criticized for falling behind in innovation compared to the broader web3 ecosystem. However, several projects are working on Bitcoin’s Layer 2 networks that are compatible with Ethereum Virtual Machine (EVM) smart contracts, expanding the utility of Bitcoin beyond payments. Conflux, Bitfinity, and Botanix are some of the projects developing EVM-compatible Bitcoin Layer 2 solutions. Meanwhile, there is controversy surrounding SatoshiVM, a Layer 2 Bitcoin rollup project, due to allegations of offloading tokens from a developer-controlled wallet. Despite the hype, there are already projects like Rootstock and Stacks that have brought smart contract functionality to Bitcoin.
Key Points
1. Bitcoin’s Layer 2 networks are being developed to enhance the functionality and utility of Bitcoin beyond payments. These Layer 2 networks are compatible with Ethereum Virtual Machine (EVM) smart contracts, allowing for the creation of decentralized applications (DApps) and expanding the scope of cross-chain functionality.
2. Conflux, Bitfinity, and Botanix are some of the projects working on EVM-compatible Bitcoin Layer 2 networks. Conflux plans to launch its Bitcoin Layer 2 in May, while Bitfinity aims to create a Bitcoin-secured DeFi ecosystem. Botanix has already launched its EVM-equivalent Bitcoin Layer 2 on testnet and is organizing a hackathon to encourage developers to build EVM-based applications on Bitcoin.
3. However, not all projects in the Bitcoin EVM Layer 2 ecosystem have been without controversy. SatoshiVM, a Layer 2 Bitcoin rollup, faced criticism for allegedly offloading a significant amount of tokens from a developer-controlled wallet. Concerns were raised about the distribution of tokens and the potential for exit liquidity manipulation. It is essential for investors to exercise caution and conduct due diligence when participating in such projects.