What is Bitlayer (BTR)?

Deep Dive

1. Purpose & Value Proposition

Bitlayer aims to unlock Bitcoin’s potential beyond being a store of value. By implementing BitVM—a trust-minimized bridge and optimistic rollup architecture—it enables Bitcoin to support DeFi, NFTs, and cross-chain applications. This addresses Bitcoin’s historical limitations in programmability while retaining its security model.

2. Technology & Architecture

Bitlayer combines Bitcoin’s proof-of-work security with an Ethereum-like smart contract engine. Key components:
- BitVM Bridge: Converts BTC into YBTC (a yield-bearing, Bitcoin-backed asset) for use in DeFi.
- Optimistic rollups: Processes transactions off-chain and settles proofs on Bitcoin, reducing congestion.
- Miner partnerships: Collaborates with pools controlling ~36% of Bitcoin’s hashrate to validate non-standard transactions critical for BitVM.

3. Tokenomics & Governance

• Total supply: 1 billion BTR, with 26.16% initially circulating.
• Utilities:
  
  • Governance: Voting on protocol upgrades and fee allocations.
  • Staking: Secure the network and earn rewards via node delegation.
  • Fee switch: Redirects protocol revenue to stakers or buybacks when activated.
• Distribution: 40% to ecosystem incentives, 20.25% to investors/advisors (vested), and 12% to the core team (4-year vesting).

Conclusion

Bitlayer positions itself as Bitcoin’s answer to scalable DeFi, blending Bitcoin’s security with smart contract flexibility through BitVM. With strategic mining pool alliances and cross-chain integrations, it aims to transform BTC into a productive asset.

Open question: Can Bitlayer’s technical innovations attract enough developers and users to rival Ethereum’s Layer 2 dominance?