What is Bitlayer? Here's Everything You Need to Know
Bitlayer is a project designed to bring trust-minimized smart contract capabilities to Bitcoin using a technology called BitVM. Its goal is to let users put their BTC to work in DeFi — without relying on centralized custodians — by running a bridge and eventually a Bitcoin-native rollup that allows BTC to move across chains and be used like ETH in smart contracts.
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🚀 Why Bitlayer Exists
Bitcoin is secure and time-tested but limited when it comes to complex applications. Bitlayer aims to change that by combining Bitcoin’s security with the programmability of other blockchains. This lets users:
Use BTC in DeFi
Collateralize with BTC
Pay gas with BTC-pegged assets
Interact with fast L2 apps that still settle to Bitcoin
Bitlayer operates on two core layers:
1. BitVM Bridge – Enables trust-minimized BTC transfers into DeFi ecosystems.
2. Bitlayer Network (Rollup) – A long-term execution layer that scales Bitcoin-based smart contracts.
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🔗 How the BitVM Bridge Works (Simplified)
1. Peg-in – Lock BTC on Bitcoin in a BitVM smart contract.
2. Mint – Receive a wrapped version of BTC (e.g., YBTC) on a target chain.
3. Peg-out – Burn YBTC to unlock original BTC on Bitcoin.
4. Challenge Mechanism – Anyone can dispute invalid states; slashing punishes dishonest behavior. This makes the bridge non-custodial and decentralized.
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🪙 YBTC & Token Variants
Bitlayer treats BTC on L2 as a family of tokens:
Native Bitlayer BTC – The core BTC-pegged currency used within the Bitlayer protocol.
YBTC.B and Others – Wrapped versions of BTC for cross-chain usage. These tokens are optimized for different use cases like gas payments, DEX liquidity, and interoperability across EVM and non-EVM chains.
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⚒️ NSTs & Mining Pool Support
BitVM needs Bitcoin to process non-standard transactions (NSTs) like assertions and challenges. These used to be a problem — but Bitlayer has partnered with major mining pools (Antpool, F2Pool, SpiderPool), who now support these NSTs, making real trust-minimized bridges on Bitcoin feasible. These pools together represent ~36% of Bitcoin’s hash power.
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🌐 Mainnet Status & Launch
BitVM Bridge Mainnet Beta went live in July 2025, marking the first real application using BitVM.
The launch included documentation, usage guides, and early adoption reports.
Bitlayer is also running ecosystem campaigns and expanding integrations.
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🔁 Multichain Integrations
Bitlayer is designed to be multichain from day one. You can use YBTC across:
Base
Starknet
Plume
Sundial
…and more. This lets BTC liquidity flow freely into multiple DeFi ecosystems.
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🧱 Bitlayer Network Architecture (V2 & V3)
V2 (Current): A Bitcoin-native rollup that batches transactions, anchors finality to Bitcoin, and uses a combination of fraud proofs and zk elements. It features a fast Proof-of-Stake sequencer for speed.
V3 (In Development): A future upgrade focusing on scalability, parallel execution, and latency — aiming to match centralized exchange speed while staying decentralized.
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🛡️ Security & Audits
Bitlayer emphasizes secure deployment:
External audits and bug bounties
Open-sourcing protocol code
Community testing
Governance oversight via a security committee
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💰 Funding & Backers
Bitlayer raised around $25M in total funding, with backing from Polychain Capital and Franklin Templeton. Institutional support suggests confidence in Bitcoin’s evolving role in programmable finance.
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🪙 Token Launch & Distribution (BTR Token)
Booster Campaign: 30M BTR tokens (3% of supply) distributed via Binance Wallet tasks (as of July 2025).
Pre-TGE and Public Sales: Conducted via CoinList and other platforms. Allocation, vesting, and participation rules are in Bitlayer's token documentation.
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👥 How a New User Can Get Started with YBTC
1. Set up a BTC wallet and acquire BTC.
2. Use the BitVM Bridge UI to lock BTC into the protocol.
3. Mint YBTC on your chosen chain.
4. Use YBTC in DeFi apps (DEXes, lending, LPs, etc.).
5. When ready, burn YBTC to retrieve your original BTC.
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Bitlayer is pioneering a path where BTC can truly become programmable — unlocking liquidity, speed, and utility without compromising Bitcoin’s core values.