BB Series (II): The Transition of Bitcoin Layer2 to Layer1
The changes in the Bitcoin ecosystem have been rapid in recent years, from a plethora of Layer2 solutions to projects like BounceBit starting to shift towards Layer1 thinking. I believe this is a significant trend. Layer2 was originally designed to expand on the Bitcoin main chain, but its limitations are obvious, such as weak smart contracts and fragmented liquidity. The transition of BounceBit starts with an asset-driven PoS Layer1 approach, no longer tightly bound to the main chain, but instead establishing an independent network, using BTC and $BB dual tokens as collateral to enhance security and resilience.
Why make this shift? Because Bitcoin's Layer2 often passively anchors, leaving BTC idle without earning interest. BounceBit directly involves BTC in validation, generating stBTC after staking, which can be reinvested into DeFi or SSC (Shared Security Client), leveraging Bitcoin's security for other chains. This not only addresses the issue of underutilized assets but also bridges the liquidity of multi-chain Wrapped BTC, unifying it into BBTC, thus simplifying cross-chain operations.
Strategically, they draw inspiration from Apple's model to build the BounceClub ecosystem, allowing developers to easily deploy dApps and avoid redundancy. Users can break free from the limitations of Layer2 and engage in CeDeFi in an EVM-compatible environment, earning triple rewards from on-chain ecosystems, PoS incentives, and CeFi interest. Just think about those bankrupt BTC financial platforms in 2022; BounceBit rebuilds trust with transparent CeFi, T+1 reconciliation, end-to-end encryption, and rigorous risk management. In summary, this transition transforms Bitcoin from a 'treasury asset' into an ecological engine, with the independence of Layer1 bringing more space for innovation. $BB, as the native token, is responsible for governance, gas fees, and staking, and the future burn mechanism can also control inflation.