I took a look at Binance Research's new updated research report on BTC L2. The basic plate and basic schemes used by BTC L2 are comprehensively introduced. Recommended reading

šŸ“For friends who are too lazy to read the original text, I will translate this article into Chinese later. This time it is a full translation

Summarize the reportšŸ‘‡šŸ»

(1) The latest developments in Bitcoin, including inscriptions, BRC-20 tokens and runes, have pushed the discussion of Bitcoin's expansion plan to a new height. Bitcoin's average transaction fee has risen from $1.5 in 2022 to $4.2 in 2023, and so far in 2024, it is $9.5.

(2) Ethereum's market value is about $450 billion, while the total TVL of various L2 solutions is about $45 billion, that is, the entire L2 sector accounts for about 10% of Ethereum's total market value. Bitcoin's market value is $1.4 trillion, and its L2 TVL is only about $2 billion, accounting for only about 0.13% of Bitcoin's overall market value.

(3) Key considerations when analyzing Bitcoin scalability solutions include:

- How they solve the trustless bidirectional bridge problem

- Relationship and consistency with the Bitcoin base layer

- Whether there is any requirement for forking

- What level of incentives do they have between users, developers, and new users

(4) The development of Taproot and BitVM solutions at the infrastructure level has expanded the possibilities for building protocols on Bitcoin. Although some of these implementations are still in their infancy, this has not prevented innovative solutions to Bitcoin's scalability problem from being provided.

(5) "Bitcoin native" protocols such as the Lightning Network and the RGB protocol both aim to improve Bitcoin's P2P transaction capabilities and introduce smart contract functionality to the original chain while retaining Bitcoin's integrity. So far, the launch of the Lightning Network has been relatively successful, while RGB is still in the development stage.

$BTC