According to BlockBeats, UTXO Stack is set to collaborate with Babylon to introduce the first Bitcoin Layer 2 (L2) expansion solution based on the native UTXO model. The initiative will feature a Proof of Stake (PoS) Data Availability (DA) chain to support the challenge proofs for L2 built on UTXO Stack. Babylon will act as the security provider, supporting both the PoS L2 and PoS DA chain.

This solution employs a UTXO model similar to Bitcoin's, ensuring security through two mechanisms: user-staked RGB++ tokens and Babylon's remote BTC staking. It aims to offer a high-performance, low-transaction-fee environment that supports Turing-complete smart contracts, allowing users to pay fees directly using BTC wallets and BTC.

UTXO Stack plans to launch its testnet in the third quarter of this year, enabling staking and re-staking of assets like BTC and CKB. This collaboration is expected to bring an efficient, low-cost, scalable, and secure native L2 solution to the Bitcoin ecosystem, further enriching Bitcoin's application scenarios.