@BitlayerLabs is a project that brings trust-minimized smart contract capabilities to Bitcoin through the BitVM framework. It operates a bridge and plans to build Bitcoin-anchored rollup infrastructure, enabling BTC to be used natively in DeFi without relying on centralized custodians.
Why Bitlayer Exists
While Bitcoin is highly secure and battle-tested, it lacks support for complex on-chain applications. Bitlayer’s mission is to merge Bitcoin’s security with the programmability found in modern blockchains. This allows users to move BTC into DeFi, use BTC as collateral, pay gas fees with BTC derivatives, and run fast Layer 2 applications anchored on Bitcoin’s finality. Bitlayer accomplishes this with two interconnected layers: (1) the BitVM Bridge for trust-minimized BTC movement into DeFi, and (2) the Bitlayer Network (rollup) for scaling and execution.
How the BitVM Bridge Works
1. Peg-in: Users lock their BTC into BitVM smart contracts on the Bitcoin blockchain.
2. Mint: The protocol mints an equivalent token (YBTC or variant) on the target chain so BTC can be used in DeFi.
3. Peg-out: To redeem BTC, users burn their YBTC tokens on the rollup or target chain, triggering the bridge to release the original BTC (or a broker manages this with an optimistic reclaim process).
4. Challenge/Resolve: The bridge uses an optimistic model where anyone can challenge incorrect states by submitting proof, penalizing bad actors. This trust-minimized setup avoids custodial risk.
The YBTC Token Family
Bitlayer treats BTC on Layer 2 as a family of assets rather than a single wrapped token:
Native Bitlayer BTC: The system currency pegged to BTC used at the protocol level, similar to ETH on Ethereum.
YBTC.B and Variants: Wrapped tokens designed for cross-chain use, compatible with EVM and non-EVM chains, optimized for liquidity, DEXs, and cross-chain swaps.
Addressing the “NST” Problem with Miner Partnerships
BitVM requires Bitcoin to accept certain non-standard transactions (NSTs) for dispute resolution. Historically, these weren’t reliably processed by miners. Bitlayer partnered with major mining pools (Antpool, F2Pool, SpiderPool) representing about 36% of hash power to ensure NSTs are accepted, enabling practical, secure deployment of the BitVM bridge on Bitcoin mainnet.
Mainnet and Milestones
Bitlayer launched the BitVM Bridge Mainnet Beta in July 2025, the first live BitVM application. This was accompanied by developer documentation, user guides, and ongoing reports on adoption. The team is now rolling out coordinated campaigns, token events, and new chain integrations.
Multichain Integrations
YBTC liquidity flows across many integrated blockchains and Layer 2s including Base, Arbitrum, Sui, Starknet, Sonic, Plume Network, Cardano, Sundial, and more. This multichain design enables minting YBTC on one chain and using it across multiple ecosystems, reducing friction for BTC liquidity.
Bitlayer Network Architecture (V2 and V3)
V2 Rollup: Bitcoin-native rollup batching Layer 2 transactions and posting proofs on Bitcoin for settlement. It uses a hybrid of fraud proofs and zk techniques to maintain high throughput while anchoring trust to Bitcoin. V2 also includes a PoS-based sequencer for fast block proposals.
V3 Performance Stage: Future plans for parallel execution, ultra-low latency, and horizontal scalability, aiming for exchange-level throughput while preserving decentralization.
Security and Audits
#Bitlayer prioritizes security with independent audits, bug bounties, community beta testing, open source releases, and a dedicated security committee overseeing protocol changes and network health.
Funding and Investors
The project has raised around $25 million to date, including a Series A extension led by Polychain Capital and Franklin Templeton. This institutional backing supports development and ecosystem incentives, signaling growing interest in programmable Bitcoin.
Token Mechanics and Distribution
Booster Campaign: In partnership with Binance Wallet, Bitlayer distributes 30 million BTR tokens as task rewards, about 3% of total supply, through phased campaigns.
Pre-TGE and Token Sales: Conducted via CoinList and partners with published allocation, vesting, and lockup details.
How Users Mint and Use YBTC
1. Acquire a BTC wallet and some BTC.
2. Use the BitVM Bridge interface to lock BTC on Bitcoin mainnet (with confirmation and challenge periods).
3. Mint YBTC or YBTC.B tokens on the chosen target chain.
4. Use YBTC in DeFi protocols like DEXes, lending, or liquidity pools.
5. When ready, burn YBTC to redeem the original BTC through the peg-out process.