Top Bitcoin Layer 2 Projects to Check Out in 2024

As Bitcoin grew in popularity over the past 15 years, its network faced scalability and transaction speed challenges which remain a problem for its widespread adoption. To counter these challenges, Bitcoin Layer 2 projects emerged to enhance the efficiency and scalability of Bitcoin. 

In this comprehensive guide, we’ll dig into the top Bitcoin Layer 2 projects, explaining what they are and highlighting their key features and benefits.

To address Bitcoin’s scaling challenges, there’s a burgeoning and growing ecosystem of L2s that offer more cost-effective and faster transactions while retaining the security of the Bitcoin blockchain and introducing new functionalities.

Bitcoin L2s are designed to lessen the burden on the mainchain by utilizing sidechains and other scaling solutions to process transactions off-chain, ergo, easing congestion and making transactions cheaper. 

Bitcoin off-chain protocols are created to offer faster verification speeds and higher throughput compared to on-chain transactions. These solutions utilize cryptographic techniques and smart-contract functionalities to provide trustlessness and security while enabling a more efficient and scalable Bitcoin ecosystem. 

In general, L2 solutions play an important role in addressing and improving the scalability and usability challenges the Bitcoin blockchain faces.

Besides making Bitcoin scalable and lowering transaction fees, some other benefits offered by Layer 2 solutions include improved user experience, instant payments, micropayments, and new functionalities.

Here’s a look at some of the most promising Layer 2 Bitcoin projects working on scaling Bitcoin. 

BitcoinOS

What Is BitcoinOS?

BitcoinOS is a network of rollups secured by Bitcoin with near-trustless rails. Being built as a decentralized modular system, BitcoinOS aims to improve the interoperability, programmability, and scalability of the Bitcoin blockchain. 

As a scalable smart-contract layer designed for Bitcoin, BitcoinOS leverages rollups to allow developers to build interoperable decentralized applications (dapps), bringing decentralized finance (DeFi), privacy, and scalability to the Bitcoin network. 

Moreover, BitcoinOS utilizes near-trustless bridging rails to transform Bitcoin layers and enable anyone to scrutinize the correctness of validity proofs. 

Key Features

• Data security rollups: Although transactions on BitcoinOS take place off-chain, they all benefit directly from Bitcoin’s security. 
• EVM (Ethereum Virtual Machine) compatibility: Besides the EVM, rollups on BitcoinOS feature an execution environment that can use any virtual machine (VM) or programming language. 

Benefits of BitcoinOS

• Composable and interoperable
• Features near-trustless BTC rails
• Improved security
• Has a layered, modular architecture

Bison Network

What Is Bison Network?

Bison Network, developed by Bison Labs is a Layer 2 project that seeks to improve the efficiency and transaction speed of the Bitcoin blockchain using ZK-STARK (Zero Knowledge-Scalable Transparent Argument of Knowledge) rollups. 

In addition, Bison Labs also expands Bitcoin’s utility by allowing smart-contract functionality. This enables developers to create a wide array of applications on the Bison network while benefiting from the security of the Bitcoin protocol.

This L2 project uses Ordinals as its data layer to secure and make its token system efficient. Consequently, network statuses and rollup proofs are inscribed on the Bitcoin network, which makes them publicly accessible and immutable. 

Key Features

• Bison OS: As the central framework of Bison Network, Bison OS comprises sequencers and token contracts. The sequencer nodes on the network are designed to pick up any transactions and process them in the order in which they were received. Token contracts record all token balances, validate transactions, and generate proofs for verification.
• ZK-STARK rollup: Bison Network uses a ZK-STARK rollup to batch transactions into compressed bundles and processes them off-chain. The L2 project then uses a single ZK proof to verify the validity of each bundled transaction on-chain. 
• Prover and verifier: Bison Networks’ rollup utilizes a prover and verifier. The prover essentially generates ZK proofs from raw proofs, while the verifier allows users to confirm the network's security level. 

Benefits of Bison Labs

• Users are said to be able to quickly verify an entire chain of proofs

Botanix Labs

What Is Botanix Labs?

Botanix Labs has developed a Layer 2 protocol known as Spiderchain to support a DeFi framework operating on the Bitcoin blockchain. 

The Spiderchain EVM utilizes Bitcoin as its settlement layer and for transaction gas, meaning everything operates on Bitcoin. 

Key Features

• Fair launch: Botanix Labs’ Spiderchain assures a fair launch by using BTC as its native token. 
• “Decentralized multisig”: The chain uses so-called "decentralized multisigs" which are secured by a randomized subset of participants.
• Proof of Stake on Proof of Work: The system uses Bitcoin’s Proof of Work for security while using Proof of Stake (PoS) for operations. PoS uses bitcoin locked in multisig wallets within the Spiderchain network.

Benefits of Botanix’s Spiderchain

• Inherits its finality from Bitcoin given its use of the proof-of-work (PoW) consensus mechanism

Build on Bitcoin (BoB)

What Is Build on Bitcoin?

Build on Bitcoin, also known as BOB, is a hybrid Layer 2 network that combines Bitcoin’s security with Ethereum’s versatility. 

BOB offers a way for developers and users to get exposure to the Bitcoin ecosystem and access to Ethereum’s DeFi projects. 

Key Features

• Bitcoin alignment: BOB inherits Bitcoin’s security and contributes to the protocol's economy by offering a platform for developers without needing hard forks. 
• EVM-compatible: By utilizing the Ethereum blockchain, BOB enables developers who are conversant with EVM to start creating on Bitcoin. 

Benefits of BoB

• As a hybrid network of both Bitcoin and Ethereum, BOB gets its liquidity, users, functionalities, and more from the two biggest blockchain ecosystems 

Citrea

Citrea is building a ZK rollup that seeks to scale the Bitcoin blockspace. As a Layer 2 protocol, Citrea assumes Bitcoin’s security and bundles transactions with an inscribed validity proof that should be verified with BitVM, a yet-to-be-developed solution for smart contracts on Bitcoin. This L2 project utilizes a two-way peg technique between Bitcoin and itself, is EVM compatible, and aims to enable Bitcoin to process smart contracts off-chain.

Key Features

• EVM compatible: It should allow EVM developers to build on Bitcoin.
• ZK rollups: Citrea utilizes ZK rollups to batch multiple transactions and execute them while also still validating them on-chain. 

Benefits of Citrea

• Aims to use Bitcoin both as a data availability and settlement layer

Lightning Network

The Lightning Network (LN) is the most popular and established Bitcoin Layer 2. LN is a network of payment channels that enables near-instant BTC transactions at almost zero cost. 

LN addresses the limitations of the Bitcoin network including transaction costs and speed. The Lightning Network utilizes payment channels that work like roadways while transactions get settled on the Bitcoin network once a payment channel closes. 

Key Features

• Payment channels: A payment channel is created once users lock up a specific amount of BTC in a multi-signature transaction. Users can then make payments once a channel is open without involving the Bitcoin mainchain. Once the parties no longer require the channel, they proceed to close it and broadcast the final transaction to the blockchain.

Benefits of the Lightning Network

• Transactions are fast and cheap
• Offers increased scalability 
• Micropayments

Liquid Network

What Is Liquid Network?

The Liquid Network is a Layer 2 project developed by Blockstream that functions as a sidechain for the Bitcoin blockchain. 

This solution aims to improve privacy and transaction speeds on Bitcoin. The Liquid Network has built-in features that hide certain aspects of a Bitcoin transaction such as the transaction amount. 

Key Features

• Sidechain architecture: The Liquid Network functions as an autonomous blockchain even though it’s pegged to the Bitcoin protocol. Liquid bitcoin (L-BTC)⸺a native token for the Liquid Network⸺is backed by BTC. 
• Federated consensus mechanism: The Liquid Network uses a federated consensus mechanism. This means that a group of permissioned entities verifies transactions, allowing for faster transaction processing and block speeds. 

Benefits of Liquid Network

• Default obscured transactions
• Two minutes for final settlement 

Merlin Chain

What Is Merlin Chain?

Merlin Chain aims to improve Bitcoin’s efficiency and scalability via ZK rollup technology. 

This project should enable users to bundle transaction data making it cheaper and faster in comparison to Bitcoin’s mainchain. 

Key Features

• EVM-compatibility: Merlin Chain is EVM-compatible which makes it easier for Ethereum-based applications to move to the platform.

Benefits of Merlin Chain

• Promises to support multiple Bitcoin protocols, including Bitmap, Ordinals, BRC-20, BRC-420, Atomicals, and more

Mezo’s Thesis

What Is Mezo’s Thesis?

Mezo is an EVM-compatible protocol built by Thesis, a Bitcoin-first venture studio, which provides an “Economic L2” solution that focuses on BTC long-term holders and users. 

As an economic layer, Mezo enables users to earn BTC in exchange for securing the network and validating transactions. 

Key Features

• Proof of HODL: This consensus mechanism allows users to secure the Mezo network by locking up their BTC and MEZO tokens and earning rewards.

Benefits of Mezo

• Being built on tBTC, a Bitcoin bridge for BTC deposits, operational since 2020
• Deposited BTC-backed stablecoins can be used to generate yield

Rootstock

What Is Rootstock?

Rootstock, the longest-running Bitcoin sidechain, offers an EVM-compatible network that’s affordable and faster than Bitcoin and Ethereum. 

Rootstock utilizes merged mining for its security, meaning that miners can use the same infrastructure and work to secure Bitcoin and Rootstock chains and receive additional revenue. The sidechain uses RBTC, a bridge token pegged 1:1 with BTC, and secures the bridged tokens using Powpeg, a PoW consensus mechanism.

Key Features

• Censorship-resistant: Rootstock doesn’t rely on intermediaries which makes it censorship-resistant.
• Merged mining: Bitcoin miners can secure additional revenue, which supports bitcoin security.

Benefits of RSK

• Already operational with strong track record

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RGB

What Is RGB?

RGB, an acronym for Really Good Bitcoin, is a smart contracts system operating as a separate layer of Bitcoin that also works with the Lightning Network. 

RGB enables users to build and execute smart contracts designed to their specific needs, such as issuing both fungible and non-fungible digital assets and creating digital identity, voting solutions, and more.

Key Features

• Lightning Network integration: RGB uses the Lightning Network for cheaper and faster transactions while leveraging the Bitcoin blockchain and assuming its censorship-resistance and security.
• Private: Has privacy-focused solutions such as zero-knowledge, Mimblewimble, and Liquid.

Benefits of RGB

• Allows issuance of both fungible and non-fungible assets
• Possible development of voting and digital identity solutions

Stacks 

What Is Stacks?

Stacks is another off-chain solution created to bring dapps and smart-contract functionality to Bitcoin. 

Stacks helps to address the limitations of the Bitcoin network such as its inability to operate complex programs on the mainchain. Stacks uses its native token, STX, to fuel its protocol.

Key Features

• Native token: Stacks has an incentive mechanism where “stackers” lock up STX to earn Bitcoin rewards as part of the network’s proof-of-transfer consensus protocol.

Benefits of Stacks

• Nakamoto upgrade should increase transaction throughput and 100% Bitcoin finality
• Uses proof-of-transfer validation consensus

Taproot Assets

What Is Taproot Assets?

Taproot Assets is a Taproot-powered protocol for issuing digital assets on the Bitcoin blockchain that can be transferred using the Lightning Network for faster speeds and low costs. 

Taproot Assets utilizes Bitcoin’s security and stability and the Lightning Network’s low fees, scalability, and security to transfer assets. 

Key Features

• Trustless swapping: Assets issued with this protocol can be swapped for BTC and other assets via trustless swaps.

Benefits of Taproot Assets

• Leverages both the Bitcoin blockchain and Lightning Network

BitcoinOS is being designed as a decentralized modular system to improve Bitcoin’s interoperability, programmability, and scalability. It’s everything a developer desires in a protocol when looking to create Bitcoin dapps given its near-trustless security and functionality. 

BitcoinOS will disrupt the Bitcoin Layer 2 ecosystem by allowing developers to build on Bitcoin as it eliminates the restrictions of innovating on Bitcoin and solves some of the shortcomings of other scaling solutions. 

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