What is Bitlayer (BTR)?

Deep Dive

1. Purpose & Value Proposition

Bitlayer aims to unlock Bitcoin’s potential beyond simple transactions by enabling decentralized applications (dApps), DeFi, and cross-chain interoperability. It addresses Bitcoin’s lack of native smart contract functionality through its BitVM-based architecture (Bitlayer Blog). By partnering with mining pools controlling ~36% of Bitcoin’s hashrate, Bitlayer ensures secure transaction validation and miner incentives (CoinMarketCap News).

2. Technology & Architecture

Bitlayer uses BitVM, a framework allowing Turing-complete smart contracts on Bitcoin without modifying its base protocol. Key components:
- BitVM Bridge: Converts BTC into YBTC (a yield-bearing asset) for use in DeFi.
- Optimistic Rollup: Processes transactions off-chain, settling finality on Bitcoin for scalability.
- Miner Collaboration: Mining pools like Antpool validate non-standard transactions critical for BitVM’s challenge-response mechanism (Cointelegraph).

3. Tokenomics & Governance

The $BTR token (1 billion total supply) serves three core functions:
- Governance: Voting on protocol upgrades and fee allocation.
- Staking: Secures the network via node incentives (7.75% of supply).
- Fee Switch: Redirects protocol revenue to stakers or buybacks when activated (Bitlayer Blog).

Conclusion

Bitlayer is a Bitcoin-centric Layer 2 merging Bitcoin’s security with smart contract flexibility, powered by $BTR for decentralized governance. How will its integration with chains like Sui and Arbitrum shape Bitcoin’s role in multi-chain ecosystems?