Every day in plain language, helping you understand a project: Bitlayer is building an ambitious tech stack on Bitcoin's native security architecture, aiming to significantly expand Bitcoin's functionality and build a complete DeFi ecosystem. Its core innovations lie in the following three pillars and their synergy:

Trust-minimized BitVM bridging:

Goal: Address the core issue of trust in cross-chain asset transfers between Bitcoin and other blockchains (especially Layer 2).

Technology: Utilizing the concept of BitVM (Bitcoin Virtual Machine). BitVM aims to perform complex computations and validations off-chain while leveraging Bitcoin's strong consensus mechanism (through challenge-response mechanisms or fraud proofs) to ensure the correctness of these off-chain computations.

Advantage: Compared to traditional multi-signature bridges or consortium bridges, the BitVM bridge theoretically achieves higher trustlessness or trust minimization. Users do not need to trust a small group of custodians but rely on the economic security and cryptographic guarantees of the Bitcoin network itself to ensure the safety of cross-chain assets. This is the cornerstone of building a secure and reliable DeFi infrastructure.

Earning asset YBTC:

Goal: Unlock the productive capacity of Bitcoin capital and solve the issue of the lack of yield in Bitcoin's native ecosystem.

Form: YBTC is likely a packaged asset or yield certificate representing Bitcoin issued on the Bitlayer Rollup. 1 YBTC ≈ 1 BTC (value pegged).

Source of income: Users holding YBTC can earn income. These earnings may come from:

Usage of DeFi protocols (lending, liquidity mining, staking) on Bitlayer.

Generate income from underlying BTC through secure mechanisms (such as remortgaging or yield strategies supported by the BitVM bridge) in off-chain or cross-chain protocols.

Fee distribution captured by the protocol.

Significance: Provides Bitcoin holders with a way to earn passive income within the Bitcoin ecosystem, activating a large amount of idle Bitcoin capital, which is a key driving force for DeFi's prosperity.

High throughput Bitcoin Rollup:

Goal: Break through the performance bottleneck of the Bitcoin mainnet (low TPS, high latency, high cost).

Technology: Utilizing Rollup technology (most likely Optimistic Rollup or ZK-Rollup, combined with BitVM, leaning more towards the fraud proof mechanism of Optimistic). The core idea is to move the computation and state storage of a large number of transactions off-chain (Layer 2), submitting only the critical transaction data (Calldata) and state commitments in batches (Rollup) to the Bitcoin mainnet for final settlement.

Advantages:

High throughput (TPS): Processes thousands or even tens of thousands of transactions per second.

Low transaction fees: Costs of mainnet settlement are shared.

Fast confirmation: Achieves quick transaction confirmations internally within Layer 2.

Scalability: Providing an operating environment for complex DeFi applications.

Relationship with Bitcoin: Relies on the Bitcoin mainnet for ultimate security, data availability (if data is stored on Bitcoin effectively), and censorship resistance. Essentially, it is an extension solution using Bitcoin as a 'settlement layer' and 'data layer'.

Synergy of the three: Building a complete Bitcoin DeFi infrastructure

Bitlayer's vision is to tightly integrate these three core components to form a self-consistent and powerful ecosystem:

Secure entry (BitVM bridge): Users can securely deposit BTC into Bitlayer Rollup through the highly secure BitVM bridge and receive corresponding Layer 2 assets (such as wBTC or directly YBTC).

High performance engine (Rollup): In the low-cost, high-speed environment of Bitlayer Rollup, users can seamlessly perform various DeFi operations: trading, lending, providing liquidity, participating in derivatives, etc.

Capital efficiency core (YBTC): YBTC, as the core earning asset, is integrated into various DeFi protocols on the Rollup. Users holding YBTC can automatically or use it within protocols to earn income, greatly enhancing the utilization efficiency of Bitcoin capital.

Composability: The Rollup environment naturally supports smart contracts (if Bitlayer achieves compatibility with EVM or other VMs) or complex scripts, allowing different DeFi protocols (DEX, Lending, Yield Aggregator, Derivatives) to be combined and invoked like LEGO blocks, creating more complex and innovative financial products and services.

Closed loop and exit: Users can safely withdraw assets (including earnings) from Rollup back to the Bitcoin mainnet via the BitVM bridge.

ps: This post is for educational sharing only and does not constitute any investment advice～thx all