When Bitcoin's market capitalization remains at $1.3 trillion but is trapped in a 'financial function gap', Bitlayer, with its 'BitVM technology + YBTC asset' dual engine, has opened a gap for Bitcoin to transition from 'digital gold' to 'global financial infrastructure'. This is not simply a function overlay, but rather a technological reconstruction of trust and asset activation of liquidity, allowing Bitcoin's financialization to move from 'concept' to 'quantifiable value network'. The core logic is to activate Bitcoin's trillion-dollar hidden value with minimized trust costs, and this innovation is rewriting the underlying rules of crypto finance.
1. BitVM: Breaking the 'trust deadlock' of Bitcoin financialization
The long-term opposition between Bitcoin's security advantages (SHA-256 hash power) and financial functions (complex contracts, cross-chain) is compromised by traditional solutions (such as WBTC) relying on centralized intermediaries, while BitVM resolves this deadlock from a mathematical perspective with an architecture of 'off-chain computation + on-chain verification'. The core breakthroughs are reflected in two points:
1. Trust costs reduced to 'mathematical level'
Traditional cross-chain solutions rely on 21 multi-signature nodes (such as WBTC), where the trust cost is equivalent to 'institutional collective integrity', historically exposing $320 million in risks due to node vulnerabilities. BitVM's 'challenge-response mechanism' anchors trust to the Bitcoin mainnet: Users lock BTC into the mainnet UTXO contract, and when generating YBTC, nodes must submit cryptographic proof; any abnormal transactions can be challenged by the entire network, and within 24 hours, an algorithm will determine the outcome, with the malicious node's BTR stake (100,000 per node) being destroyed.
Data validation: The attack cost of BitVM bridging reaches $230 million, 11 times that of WBTC; by Q3 2025, YBTC's cross-chain success rate is 100%, with zero security incidents, reducing trust costs by 90% compared to traditional solutions.
2. The 'compromise balance' of performance and security
The Bitcoin mainnet has a TPS of only 7, with transaction fees as high as $10 each, making it unable to support financial scenarios. Bitlayer's Rollup architecture is deeply adapted to Bitcoin: transactions are first executed on Layer 2 (TPS exceeding 3000+), with a 'state snapshot' generated every 10 minutes submitted to the mainnet via SPV, enjoying the security of Bitcoin's hash power while reducing transaction fees to 0.001 BTC each (1/50 of the mainnet).
Key iteration: BitVM 2.0 tests the 'zero-knowledge proof acceleration module', reducing cross-chain verification time from 15 minutes to 90 seconds, while also introducing quantum-resistant algorithms, leading competitors by at least 18 months in technology.
2. YBTC: The 'nerve center' activating Bitcoin liquidity
Bitcoin's liquidity has long been dispersed across various chains (mainnet, Ethereum, Solana), making it impossible to form a collective force. YBTC, as the core asset of Bitlayer, is not merely a 'cross-chain clone', but establishes a value closed loop of 'multi-chain liquidity aggregation - institutional scenario penetration - miner interest binding', with three core functions:
1. The 'aggregation effect' of cross-chain liquidity
YBTC has become the first Bitcoin asset to bridge multiple chains through native integration with ecosystems like Base, Sui, and Cardano. In the Base ecosystem, YBTC accounts for 68% of Bitcoin DeFi trading volume (far exceeding WBTC's 22%), with a YBTC staking pool on Aave yielding an annualized rate of 5.2%, attracting 8,000 BTC deposits (15% of Base's total TVL); in the Sui ecosystem, the trading volume for YBTC against stablecoin exchange pools broke $12 million in 24 hours, driving a 40% growth in Sui institutional users.
Data highlights: The total cross-chain volume of YBTC has surpassed 20,000 BTC, accounting for 41% of the total flow in Bitcoin DeFi, with liquidity depth being 3-5 times that of competitors, creating a network effect of 'the more users, the deeper the liquidity, the wider the applications'.
2. The 'compliance interface' for institutional entry
Franklin Templeton's $25 million investment is essentially a position of traditional capital in 'compliant Bitcoin financialization'. Bitlayer has customized three major tools for this purpose: an on-chain audit tracking system (to meet SEC anti-money laundering requirements), GAAP standard financial interfaces, and miner hash power securitization tools (Antpool tokenizing 1000 PH/s hash power, subscribed by pension funds).
Case study: A European family office participated in a 'staking + government bond yield' composite product through YBTC, with a minimum initial investment of 100 BTC, and the first tranche sold out within 72 hours, validating the urgent demand from traditional capital.
3. The 'interest binding' of miner cooperation
Bitcoin miners have transformed from 'bystanders' to 'ecosystem co-builders': Mining pools such as Antpool and F2Pool operate Bitlayer verification nodes and can earn BTR rewards in addition to Bitcoin rewards (currently accounting for 7% of mining pool income). Currently, 12% of Bitcoin hash power is connected to Bitlayer, forming a positive cycle of 'hash power growth → network security enhancement → financial application expansion'.
3. Value reassessment: Transitioning from 'market capitalization' to 'infrastructure value'
Bitlayer's dual engine is expanding Bitcoin's value dimension from 'single market capitalization' to 'financial infrastructure value', with its long-term potential measurable through two dimensions:
1. Short-term: Activating Bitcoin DeFi penetration rate
Currently, only 6% of Bitcoin addresses participate in DeFi. If Bitlayer increases the penetration rate to 20%, this would correspond to a YBTC scale of $260 billion, and Bitlayer's annual transaction fee income could reach $2.6 billion. BTR, as the ecological hub, could conservatively be valued at $10 billion (referencing the ratio of Ethereum gas fees to token market value).
2. Long-term: Connecting to the global financial system
When Bitcoin achieves interoperability with RWA (real estate, government bonds) and traditional payment systems through Bitlayer, its valuation will be linked to the 'global asset circulation scale'. With just 1% of the global $130 trillion bond market being tokenized through YBTC, this could yield a value increment of $1.3 trillion, and Bitlayer, as the core infrastructure, will see its value grow exponentially with this process.
Conclusion: The financialization of Bitcoin driven by dual engines is irreversible
Bitlayer's innovation is not about adding 'interest-bearing functions' to Bitcoin, but rather using BitVM to reconstruct the underlying trust and activating the liquidity network with YBTC, allowing the $1.3 trillion Bitcoin to genuinely possess the genes of 'global financial infrastructure'. As traditional capital enters through YBTC, miners contribute hash power to the ecosystem, and users freely transfer value across multiple chains, this dual-engine-driven revolution has far surpassed the scope of a single project — it is reshaping the value logic of Bitcoin and rewriting the infrastructure landscape of global finance.
