The Bitcoin Layer2 project Bitlayer recently completed a $25 million financing round at a $300 million valuation, led by Polychain Capital, with follow-on investments from Franklin Templeton, OKX Ventures, and other institutions. The core logic behind this high valuation stems from the expansion narrative of Bitcoin DeFi (BTCFi) and Bitlayer's differentiated technological advantages.

1. Financing Journey and Institutional Bets

Bitlayer's financing is divided into three stages:

  • Seed Round (March 2024): $5 million, led by Framework Ventures and ABCDE, focused on technical validation.

  • Series A (July 2024): $11 million, co-led by Franklin Templeton to promote the launch of Mainnet V1.

  • Series A+ (October 2024): $9 million, led by Polychain, achieving a valuation of $300 million, with funds allocated for OpVM technology research and ecosystem expansion.

Institutions are optimistic about Bitlayer's BitVM+OpVM architecture, which resolves the security and compatibility contradictions of Bitcoin Layer2 through trustless verification on the Bitcoin mainnet (BitVM) and efficient smart contract execution (OpVM).

2. High Valuation Logic: BTCFi Narrative and Market Potential

  • The urgent need for expansion in the Bitcoin ecosystem: The popularity of Ordinals and Runes protocols has led to congestion on the Bitcoin network, making Layer2 crucial for releasing trillions in liquidity. Bitlayer is EVM-compatible and supports DeFi, NFTs, and other applications, filling the 'programmability gap' in the Bitcoin ecosystem.

  • Benchmarking against Ethereum Layer2: The leading Ethereum Layer2 project Arbitrum has a market cap exceeding $10 billion, while the overall TVL of Bitcoin Layer2 is only $1.45 billion. If Bitlayer captures 10% of the market share, its valuation still has more than threefold growth potential.

3. Challenges and Risks

Although the Bitlayer ecosystem has deployed 280 DApps (with a TVL exceeding $1 billion), it still faces pressure for technological implementation (such as OpVM verification efficiency) and fierce competition in the Bitcoin Layer2 space (like Core and Stacks).

Conclusion

Bitlayer's high valuation reflects long-term optimism from capital towards Bitcoin DeFi, but whether it can replicate Arbitrum's success depends on breakthroughs in both technology implementation and ecosystem growth.@BitlayerLabs #Bitlayer