Venture Capitals Dive into the BTC Public Chain Ecosystem

Forward the Original Title‘一览风投机构纷纷入局的 BTC 相关公链生态｜CryptoSnap’

As the Bitcoin mining reward halving looms, sparking a bull market fueled by BTC ETF tales and bracing for a pullback with the impending halving, the Bitcoin ecosystem has undergone a profound transformation in just half a year. Venture capital firms are now eagerly participating, enriching the ecosystem beyond community-driven meme tokens with a flurry of BTC Layer 2 and re-staking chain projects spearheaded by VCs and exchanges.

In this week’s CryptoSnap, Dr.DODO takes us through five buzzworthy BTC-related public chains and the venture capital backing propelling them forward.

BounceBit

BounceBit distinguishes itself as a pioneering platform that anchors its security on the intrinsic value of BTC, aiming to broaden the horizons of Bitcoin through an innovative Restaking mechanism. The platform recently made headlines with the announcement that its token, $BB, will make its debut on Binance’s Web3 wallet token launchpad, Megadrop. The buzz around BounceBit intensified following a strategic investment from BinanceLab, catapulting it into the spotlight as one of the select new BTC-centric projects featured by Binance, thus drawing an influx of user interest and investment.

Setting itself apart from typical BTC Layer 2 solutions that lean on Bitcoin’s underlying security features, BounceBit ventures into uncharted territories by establishing an independent Proof of Stake (POS) public chain rooted in BTC’s value. Through strategic partnerships with centralized finance (CeFi) asset management entities and leveraging tariff arbitrage, BounceBit offers users the chance to amplify their BTC holdings’ earnings. Stakers receive $BBTC vouchers, which serve as a gateway to operating nodes on the BounceBit Chain or securing $BB token rewards via the LST protocol. Additionally, BounceBit’s Restaking mechanism fosters a supportive environment for auxiliary applications within its ecosystem, such as oracles and cross-chain bridges, by utilizing $BBTC staked in nodes for various verification tasks.

As of now, BounceBit continues to engage its community with a points program, rewarding deposits of wBTC, BTCB, and similar assets with points, with plans to maintain this initiative until the Metadrop launch commences.

Source: https://www.binance.com/zh-CN/research/projects/bouncebit

Merlin Chain

Merlin Chain stands out as the crown jewel among today’s showcased projects, boasting an impressive Total Value Locked (TVL) that has soared past 950 million USD. It proudly holds the title of the first to roll out a mainnet within the BTC EVM Layer 2 space. Coinciding with the Bitcoin halving, its token $MERL has made its debut on leading exchanges, including OKX and Bybit.

Backed by heavyweight investors such as The Sparta Group and OKX Ventures, Merlin Chain introduces a cutting-edge Layer 2 solution atop Bitcoin. It uniquely combines OP-Rollup and ZK-Rollup technologies, dubbing this hybrid “optimistic ZK-Rollup.” A standout feature is its integration of an off-chain decentralized oracle network, serving as the Data Availability Committee (DAC) to tackle data availability dilemmas. In practice, Merlin’s sequencers dispatch transaction data to Oracle and Prover nodes, leveraging lumoz’s Prover as a Service. Oracle nodes shoulder the task of validating ZK Proofs and broadcasting these validations onto the Bitcoin blockchain (ZK-Rollup). Given Bitcoin’s blockchain limitations in fully authenticating ZK Proofs, Merlin Chain cleverly incorporates a fraud proof mechanism. This allows for challenges against the verification process through fraud proofs (OP-Rollup), bolstering the network’s robustness.

Source: https://docs.merlinchain.io/merlin-docs/architecture

The ecosystem surrounding Merlin Chain is a beacon of success within the BTC Layer 2 arena. Key players like the asset management protocol Solv Funds, lending protocol Avalon Finance, and DEX protocol MerlinSwap each have crossed the 100 million TVL landmark. Despite this, the aftermath of $MERL’s token launch poses a question: will the allure for airdrop hunters and the flow of capital shift elsewhere? This remains a focal point for ongoing observation.

Source: https://defillama.com/chain/Merlin

B² Network

The B² Network emerges as another ambitious BTC EVM Layer2 initiative, enjoying the backing of key players such as Hashkey Capital, OKX Ventures, and Kucoin Lab. Its architectural blueprint bears resemblance to that of Merlin Chain, employing an optimistic approach to ZK-Rollup by parallelly integrating ZK-Rollup with OP-Rollup. In collaboration with Polygon Lab, B² Network ventures into the realm of zkEVM, broadening the scope of Polygon CDK to encompass BTC. This innovative approach facilitates user interaction across both EVM and BTC wallet accounts, seamlessly bridging the gap between the two ecosystems. Addressing the limitation of BTC’s data storage capacity, B² Network has crafted its own DA Layer, the B² Node, with plans to evolve it into the B² Hub. This future hub aims to equip developers with a robust framework for data availability and state verification on the Bitcoin network, encouraging the creation of bespoke Bitcoin Rollups with Polygon CDK and B² Hub.

What sets B² Network apart from its BTC Layer2 counterparts is not just its technological prowess but its visionary scope. It aspires to transcend the conventional boundaries of a BTC Layer2, aiming for a stature akin to that of Cosmos Hub or Op Stack. By positioning B² Hub as a pivotal entity, it intends to redefine the BTC Layer2 landscape.

Source: https://docs.bsquared.network/architecture

In alignment with the recent Bitcoin halving, B² Network has propelled its mainnet into operation. Following the conclusion of its initial lock-up airdrop phase, it has embarked on a second phase featuring random airdrops. Participants who bridge their BTC to the B² Network mainnet stand a chance to partake in the airdrop upon the release of the protocol token. The end date for this phase remains open-ended, with official communications suggesting it could conclude without prior notice.

BOB

BOB (Build On Bitcoin) stands as a pioneering BTC EVM Layer2 endeavor, backed by notable entities like Castle Island and Coinbase Ventures, successfully securing $10 million in its initial funding round.

BOB’s development journey is charted across three distinct phases in its roadmap. The venture kicks off with the first phase, where BOD L2 embraces OP Stack and rolls out its mainnet utilizing the Ethereum OP Rollup model. This setup conducts settlements on Ethereum while monitoring Bitcoin’s status through light nodes, verifying block headers, and facilitating trustless cross-chain transactions with inclusive proof.

Source: https://docs.gobob.xyz/docs/learn/bob-stack/roadmap

The narrative evolves in the second phase with the integration of Bitcoin’s Proof of Work (PoW) security via the innovative OptiMine protocol, decoupling block generation from PoW. Here, BOB’s sequencers manage transaction and block processing, subject to validation by Bitcoin miners against BOB Rollup states. This phase ensures that only accurate state transitions prompt miners to embed the commitment within PoW, effectively reducing reliance on sequencers. The culmination of this phase sees sequencers dispatching PoW commitment-encompassed data to Ethereum, leveraging it as a Data Availability (DA) Layer for verifying data accessibility.

Source: https://docs.gobob.xyz/docs/learn/bob-stack/roadmap

The journey culminates in the third phase, where Bitcoin is envisioned to serve as the foundational settlement layer. This ambitious phase, currently under exploration, contemplates employing ZK compression as a component of the fraud-proofing mechanism, in collaboration with ZK infrastructure providers. It also involves crafting BOB light clients, establishing two-way bridges, and enhancing BitVM programs, all aimed at validating BOB Rollup states effectively.

This phased approach outlines BOB’s progression from an optimistic Ethereum Rollup foundation, through enhancing security with Bitcoin’s PoW, to envisaging Bitcoin as the ultimate settlement layer. This strategic, phased evolution underscores BOB’s mission to merge Bitcoin’s robust security with Ethereum’s flexibility, offering a trailblazing Layer-2 solution to energize the Bitcoin DeFi landscape.

Source: Source: https://docs.gobob.xyz/docs/learn/bob-stack/roadmap

BOB is presently in the midst of its inaugural quarterly points campaign, rewarding deposits of tBTC, WBTC, stablecoins, and ETH LST tokens with points. Following the Bitcoin halving, the official declaration has set the mainnet launch for 4/24, marking the cessation of the first quarter’s activities and the onset of the second quarter’s campaign, with further specifics pending release.

Mezo

Mezo, a new Bitcoin blockchain initiative developed by the Thesis team—famed for their work on the BTC wrapped asset tBTC—has recently raised $21 million in a financing round led by Pantera Capital, with significant contributions from leading venture capital firms such as Multicoin and Hack VC. Positioning itself as Bitcoin’s “economic layer,” Mezo is dedicated to fostering an application ecosystem tailored to meet the economic demands of its users. Its efforts are concentrated on broadening the scope of BTC’s application in various scenarios, introducing a unique consensus mechanism dubbed Proof of HODL. This approach requires users to lock their BTC and MEZO tokens and engage in CometBFT consensus to authenticate transactions, ensuring the network’s security.

Moreover, Mezo is rolling out a HODL points program, inviting participants to deposit native BTC, WBTC, or tBTC in exchange for points. As of now, Mezo has revealed limited technical specifics. The platform secures all user deposits in a locking contract, overseen by the team’s multi-signature control, pending the activation of Mezo’s mainnet when these funds will be bridged.

Source: https://info.mezo.org/proof-of-hodl

Author’s Insight

Public blockchain narratives consistently command the spotlight in the blockchain world, boasting the grandest stories, highest valuations, and substantial funding. This allure has institutions on the edge of their seats, eager to capitalize on the Bitcoin-driven market surge by rolling out a variety of public blockchain projects tethered to the Bitcoin theme. But one might wonder, does Bitcoin genuinely benefit from these Layer 2 enhancements, or more broadly, do crypto enthusiasts really prioritize whether the foundational technology of their preferred networks is rooted in BTC or EVM?

From my vantage point, the success of these BTC-centric blockchain ventures hinges less on the intricacies of their technological underpinnings and more on the strength and support of the resources behind them. It’s essentially a battleground for institutional capital, presenting retail investors with yet another speculative avenue, whether it be through MEME tokens, decentralized exchanges (DEXs), or lending and mining schemes.

Hence, a practical approach for individuals like myself involves gauging the financial backing and potential of each project, aiming to get involved early through airdrops, token lock-ups, and point-earning activities to snag some free tokens. Beyond this, it pays to keep an eye out for any leading Memecoins or officially endorsed memes following the launch of the mainnet.

Disclaimer:

1. This article is forwarded from [DODO Research], Original title: “A glance at the BTC-related public chain ecology that venture capital institutions have entered | CryptoSnap”，Copyright belongs to the original author [dt, if you have any objections to the reprint, please contact the Gate Learn team (gatelearn@gate.io), and the team will handle it as soon as possible according to relevant procedures.

2. Disclaimer: The views and opinions expressed in this article represent only the author’s personal views and do not constitute any investment advice.

3. Other language versions of the article are translated by the Gate Learn team. Without referencing Gate.io), copying, distributing, or plagiarizing the translated articles is prohibited.

Disclaimer：

1. This article is reprinted from [DODO Research]. Forward the Original Title‘一览风投机构纷纷入局的 BTC 相关公链生态｜CryptoSnap’. All copyrights belong to the original author [dt]. If there are objections to this reprint, please contact the Gate Learn team, and they will handle it promptly.
2. Liability Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. Translations of the article into other languages are done by the Gate Learn team. Unless mentioned, copying, distributing, or plagiarizing the translated articles is prohibited.