After 23 years of development, Ordinals, BRC20, BRC420, Atomics and other inscription protocols have emerged in the Bitcoin ecosystem, redefining the connotation of the Bitcoin ecosystem.
As of January 24, the Bitcoin ecosystem has evolved into a prosperous and lively new field of the encryption industry.
The market has two basic expectations for Bitcoin Layer 2: OrdFi (Inscription DeFi) and unlocking Bitcoin liquidity.
Taking the Map protocol as an example, users can cross-chain BRC20 inscriptions to the Map Relayer network through Map's ZK light node cross-chain bridge. Different from common Relayer, the Map Relayer network adopts PoS consensus mechanism and supports and is compatible with EVM. Once BRC20 assets are cross-chained to the Map Relayer network, users can trade BRC20 assets just like trading ERC20 tokens on DEX.
Another expectation is to unlock Bitcoin liquidity. Currently, Bitcoin’s outflow value accounts for only 1.08% of Bitcoin’s total market value, while Ethereum’s outflow value accounts for 1.8% of the total market value. The hope is that Bitcoin Layer 2 will unlock more Bitcoin liquidity in a more decentralized, verifiable and transparent way, at least to the level of Ethereum’s outflow value ratio.
Regarding the method of implementing Bitcoin Layer 2, the industry consensus is basically the same, but there are many options for actual implementation. Traditional solutions include state channels, client verification, side chains, and OmniLayer, while new solutions include ZK light nodes, oracles + light nodes, Rollup + DA, and MPC multi-signature mechanisms
Overall, the mission of Bitcoin Layer 2 is to carry OrdFi and unlock Bitcoin liquidity, but how to implement Bitcoin Layer 2 has become a new topic facing the encryption industry. Due to the high degree of isomorphism between cross-chain bridges and Layer 2, new Bitcoin Layer 2 like the Map protocol based on the cross-chain bridge solution may become an important direction for the industry to explore.
