Welcome to the 3rd edition of our exciting new series, dubbed the ‘X Talks Bitcoin’ series. This is not just another industry discussion. It’s a unique opportunity for the pSTAKE community and Bitcoin enthusiasts to gain exclusive insights into Bitcoin, the emerging BTCfi industry, and potential yield-generating strategies.
Our series will feature expert opinions, providing invaluable insights into the future of Bitcoin and how we can all best position ourselves. These discussions are not just relevant but crucial to all our readers, offering a “not-to-be-missed” and “thought-provoking” perspective on what’s coming next for Bitcoin.
We spoke to Peter (Velar) in the previous edition about Adoption of BTCfi. Today, Hakan Sezikli (Co-Founder at BEVM) shares his candid thoughts on BTC Layer2 solutions in boosting Bitcoin yields.
BEVM is the leading and most secure Bitcoin L2 that focuses on PoW hashrate Real World Asset
Q1. What role do Layer 2 solutions play in enhancing Bitcoin yield opportunities?
Layer 2 solutions for Bitcoin play a significant role in enhancing revenue opportunities, which is precisely what our BEVM project is working on. We believe there are two main growth points for revenue:
Firstly, it provides more DeFi opportunities for long-term BTC holders. Bitcoin holders have been seeking ways to increase their capital efficiency beyond simply following BTC price movements. Layer 2 can introduce BTC into the DeFi ecosystem, allowing investors to participate. For instance, through the BIDO liquid staking project in the BEVM ecosystem, fees are calculated in BTC, and 50% of these fees are distributed to Bitcoin stakers in BIDO, generating additional yield.
Secondly, hashrate RWA (Real World Assets) offers more revenue combinations for miners and investors. We know that traditional miners’ revenues are affected by market fluctuations and mining difficulty adjustments, with relatively high entry barriers. BEVM tokenizes hashrate, allowing users to flexibly configure hashrate tokens on the Layer 2 platform. For example, users can use hashrate tokens as collateral for hedging, futures and spot trading, or collateralized lending to increase returns or reduce risks.
Additionally, we’re in talks with some new public chains and Layer 2 projects to provide BTC TVL (Total Value Locked) to them, thereby generating returns. These returns are actually provided by the chains themselves, potentially creating a virtuous cycle that promotes the development of the entire ecosystem.
Q2. How do Bitcoin Layer 2 solutions enhance scalability and functionality?
The Bitcoin network, due to its original design, is primarily used for peer-to-peer payments and value storage, lacking smart contract functionality. This is why Layer 2 solutions are needed for scaling and enhancing functionality.
BEVM was also built with the concept of extending the Bitcoin network. We’ve constructed the Taproot Consensus architecture using Bitcoin’s native Taproot upgrade technology, mainly integrating Bitcoin’s Schnorr Signatures and MAST technology. Schnorr Signatures allow Bitcoin multi-sig addresses to expand to 1000, while MAST can be understood as a smart contract running on the Bitcoin chain that can process multi-sig payments. Therefore, Schnorr+MAST can achieve a Bitcoin multi-sig network driven by code instructions rather than human signatures, making it more decentralized and secure.
Fundamentally, Layer 2 mainly processes off-chain transactions through an independent execution layer, then submits these transactions to the Bitcoin consensus layer for final settlement. This not only improves Bitcoin’s transaction privacy and efficiency but also reduces transaction storage space and processing time. Of course, currently, almost all Layer 2 solutions on the market can achieve these functions, except for a few. However, the technologies differ, with BEVM being built entirely on Bitcoin’s native technology, making it excellent in terms of security and privacy.
Q3. How do you ensure interoperability and compatibility with existing Bitcoin infrastructure while implementing Layer 2 solutions?
At the asset level, BEVM is compatible with existing BTC innovation asset protocols such as Ordinals and BRC20, and supports native cross-chain transfers of Runes and inscriptions. By supporting these protocols, BEVM ensures seamless integration between new and existing technologies, allowing current Bitcoin assets to be managed and traded on the BEVM platform. Furthermore, BEVM also supports WBTC assets, enabling Bitcoin to be used on blockchains like Ethereum, enhancing Bitcoin’s liquidity and application scope.
We recently partnered with Bitmain, a leading industry player in hashrate, to launch a $10 million hashrate RWA ecosystem support program, dedicated to promoting the development of the hashrate RWA industry. In this process, we introduced another new type of Bitcoin asset class – hashrate tokens. Hashrate tokens are tokenized assets based on computational resources. Through cooperation with multiple project parties and institutions, BEVM can ensure these hashrate tokens have better liquidity and achieve more value circulation.
In terms of cross-chain capabilities, BEVM utilizes native Bitcoin Taproot technology to implement a decentralized cross-chain bridge using Taproot Schnorr Signatures+ Merkle Abstract Syntax Trees + Bitcoin SPV light nodes. This supports native BTC asset cross-chain transfers, thereby achieving cross-chain interoperability between the Bitcoin network and BEVM.
We’ve also launched a new technology stack service – BEVM-Stack, which is compatible with Op Stack-related chains, thus bridging the connection with the Ethereum ecosystem. By providing a development and runtime environment compatible with Op Stack, BEVM-Stack enables seamless connection between the Bitcoin network and the Ethereum ecosystem. This allows developers to build and run Ethereum-compatible applications on the BEVM platform, leveraging Ethereum’s vast ecosystem resources for cross-chain application development and deployment.
Overall, the compatibility design in both asset and cross-chain aspects not only enhances the scalability of the Bitcoin network but also lays a solid foundation for the further development of blockchain technology.
About pSTAKE Finance
pSTAKE Finance is a Bitcoin Yield and Liquid Staking protocol, backed by Binance Labs.
With pSTAKE Finance, users can liquid stake BTC to get rewards from Babylon’s Trustless BTC staking for securing other app chains while maintaining their liquidity.
Accessing Bitcoin yields should not be complex, risky, or unsafe. With four years of liquid staking expertise and expert-curated yield strategies, pSTAKE Finance helps individuals and institutions put their BTC to work in BTCfi.
pSTAKE Finance has partnered with leading blockchain security firms, such as Halborn, Hexens, Oak Security, Immunefi, Forta, and more, to offer a secure liquid staking product suite.
PSTAKE is the governance and incentivization token of the pSTAKE Finance protocol. It has some of the most prominent investors, including Binance Labs, DeFiance Capital, Spartan Group, Coinbase Ventures, and Kraken Ventures.
