Bitcoin ecosystem rises, Layer 2 projects become the new focus

Recently, the Bitcoin ecosystem has experienced a wave of Layer2 enthusiasm. With the vigorous development of inscription projects, the Bitcoin network is facing issues such as congestion and high transaction fees. Against this backdrop, Layer2 solutions have emerged, which not only alleviate network pressure but also bring more possibilities to the Bitcoin ecosystem.

The rise of inscription transactions has brought unprecedented pressure to the Bitcoin network. According to statistics, since February of this year, inscriptions have been the main consumers of Bitcoin block space. This has led to the Bitcoin mempool being consistently at full capacity, with a large number of small transactions unable to be processed in a timely manner. Some analyses indicate that these small transactions may never be packaged onto the chain, resulting in a waste of network resources.

In the face of this dilemma, Bitcoin Layer 2 projects show great potential. They can not only solve network congestion issues but also introduce smart contract capabilities to the Bitcoin ecosystem, opening up application scenarios such as DeFi and NFTs. Currently, multiple noteworthy projects have emerged in the Bitcoin Layer 2 space.

Stacks, as a second-layer solution for Bitcoin, introduces smart contract functionalities similar to Ethereum. It runs in sync with the Bitcoin network through an independent chain, compiler, and programming language. However, Stacks implements cross-chain functionality through a centralized mapping method, which poses certain risks. At the same time, its network gas uses the mainnet token STX instead of BTC, which may affect the enthusiasm of miners' participation.

RSK is a general smart contract platform based on Bitcoin. It supports the migration of Ethereum applications and uses a merged mining mechanism to enhance miners' profitability. However, RSK uses smartBTC for bridging, which still faces smart contract security risks.

BitVM, as an emerging project, aims to achieve Turing-complete Bitcoin contracts. It introduces state in an innovative way, achieves verifiability, and maintains the lightweight characteristics of the Bitcoin network. However, BitVM is still in the conceptual stage, and its practical application prospects remain to be verified.

BEVM proposes a fully decentralized Bitcoin L2 solution. It uses BTC as Gas, is EVM compatible, and enables various decentralized applications. BEVM ensures the security and decentralization of assets through an innovative cross-chain mechanism.

MAP Protocol focuses on peer-to-peer cross-chain interoperability. It utilizes Bitcoin's security mechanism to achieve cross-chain capabilities for BRC20 and provides a low-cost trading experience.

As more investors recognize the importance of Layer2 solutions for the future of Bitcoin, this sector is ushering in new development opportunities. Similar to the development trajectory of Ethereum Layer2, Bitcoin Layer2 projects are expected to incubate leading projects worth billions of dollars. Currently, this field is still in the blue ocean stage, containing enormous investment potential.