How should we define BTC Layer2?

2024-01-22 15:00

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The original author: Jademont, founder of Waterdrop Capital

Editor's note: As the mainstream narrative of the current era, the BTC ecosystem is flourishing. In order to increase capacity and reduce costs, BTC's Layer2 is blooming. Regarding the definition of BTC L2, Jademont, founder of Waterdrop Capital, expressed his views on X, and BlockBeats has compiled the full text as follows:

The broad definition of BTC Layer2:

As long as BTC is used as gas and BTC is used as the underlying asset, it can be used as a dapp platform with far better performance than BTC layer 1. This includes but is not limited to application platforms based on Indexer, EVM rollup, EVM crosschain, sidechains, Lightning Network, RGB, and so on. Ultimately, the competition is still based on TVL, which is how much BTC trusts your Layer2. This is similar to the L2 wars of Ethereum, where the debate over who is orthodox is meaningless. The one with the highest market value and TVL has the right to define the interpretation.

Bitcoin Layer2 in a narrow sense:

At least two of the following conditions must be met simultaneously:

1. Does it share security with BTC? If BTC goes down, can your L2 survive on its own? The most that can survive on its own is called a sidechain.

2. Whether it is resistant to censorship. Are your L2 nodes or cross-chain multi-signatures decentralized enough, not like multichain, which are all in the hands of a few relatives, and once users are caught, their assets are also lost.

符合以太坊社区标准的 BTC Layer2：

Compliant BTC Layer2 with Ethereum Community Standards:

In addition to the definition of narrow L2, two more criteria need to be added: whether a layer can verify transactions on the second layer, and whether assets on the first layer can escape smoothly when the second layer collapses.

Personally, I think that discussions based on definitions are the most meaningless, because Satoshi Nakamoto will not come out and tell everyone what his ideal BTC L2 looks like, and no organization has the right to define this orthodoxy.

The Bitcoin ecosystem seems chaotic, just like when there were a bunch of messy forked chains in 2013, but it is precisely in this chaotic community atmosphere that Vitalik attempted to create smart contracts on BTC and founded Ethereum, and various new technologies were discussed, laying the foundation for the prosperity of the public chain era. However, ten years later, things are different. BTC has its own taproot upgrade, programmability, scalability, and privacy have been greatly improved. The technological progress that has been precipitated by this prosperity can be fully implemented within the BTC ecosystem.

Encryption KOL @DrJinglee ◉‿◉ asks: If Arc20 tokens such as $sophon are used as gas, does that count as Layer2?

Jademont: Yes, it can be calculated because the cross-chain part must consume BTC.