2024 has seen massive growth of the Bitcoin ecosystem, with tokens coming up as new use cases and even the network’s native cryptocurrency, bitcoin, recording its highest price since its inception. Some of these technological advancements on the network have been facilitated by Layer 2 protocols.
In this article, we look at what Bitcoin layers are, why they are important, and highlight the top five bitcoin layers that made waves this year.
What Are Bitcoin Layer 2s?
Bitcoin Layer 2s are protocols or frameworks built on the Bitcoin blockchain (Layer 1). They aim to enhance the functionality of the Bitcoin network by addressing its inherent limitations, such as low throughput and high transaction fees.
Instead of processing every transaction on the main Bitcoin blockchain, Layer 2 solutions allow transactions to occur off-chain or in parallel systems, settling the final state on the Bitcoin blockchain.
Some key characteristics of Bitcoin Layer 2s include scalability, where they offload transactions from the Bitcoin mainnet, Layer 2s can process thousands—or even millions—of transactions per second.
Bitcoin Layer 2s also lower costs, reducing the need for every transaction to be confirmed on-chain, drastically cut transaction fees, and enhance functionality by enabling new use cases like smart contracts, micropayments, and decentralized applications (dApps).
Lastly, by keeping most transaction data off the main blockchain, Layer 2s preserve Bitcoin’s decentralization and security while enhancing its utility.
5 New Bitcoin Layer 2s You Should (Probably) Know About
Let’s take a look at some of the newest Bitcoin Layers that have been making waves in 2024.
BitcoinOS
BitcoinOS introduces a groundbreaking approach to Bitcoin Layer 2s by transforming Bitcoin into a developer-friendly operating system. It provides the tools and infrastructure needed to build decentralized applications (dApps), significantly expanding the Bitcoin network’s functionality.
BitcoinOS operates through a modular framework that enables developers to create smart contracts, decentralized finance (DeFi) protocols, and tokenized assets.
With zk-SNARK technology and the integration of Bitcoin zero-knowledge proofs, BitcoinOS enhances privacy for transactions and dApps, making it a leader in secure smart contract development.
B2 Squared Network
B2 Squared Network, often abbreviated as B2², is tailored for enterprises and financial institutions. Its primary focus is on high-speed payments and settlements that integrate seamlessly into traditional finance systems.
Designed with enterprises in mind, B2² can process up to 100,000 transactions per second, enabling large-scale adoption without compromising compliance.
Its built-in tools for KYC/AML and regulatory reporting make it one of the few Bitcoin Layer 2 solutions explicitly designed for institutional use. By leveraging a parallel network architecture, it ensures both speed and reliability while maintaining compatibility with Bitcoin.
Build on Bitcoin (BoB)
Build on Bitcoin (BoB) is a creative and community-oriented Layer 2 protocol. It focuses on empowering creators, communities, and developers to leverage Bitcoin for programmable NFTs, social tokens, and decentralized content platforms.
BoB introduces programmable NFTs with dynamic properties, allowing creators to update metadata and content over time. It also enables the issuance of social tokens that reward community engagement, providing an ecosystem where users and creators share value. The platform is user-friendly, making it accessible to developers and non-developers alike.
By enabling NFT marketplaces, decentralized social media platforms, and crowdfunding campaigns, BoB is expanding Bitcoin’s appeal beyond finance. It’s a key player in Bitcoin’s foray into the creator economy, allowing artists, influencers, and developers to build innovative applications and communities.
Mezo
Mezo brings proof-of-stake (PoS) functionality to Bitcoin without altering the base layer’s proof-of-work (PoW) consensus. This Layer 2 solution combines staking-based incentives with cross-chain compatibility, enabling interoperability between Bitcoin and other blockchains.
The layer allows users to participate in staking, earning rewards for securing the Layer 2 network. Its design incorporates energy-efficient principles while maintaining compatibility with Bitcoin’s security model. Additionally, Mezo supports cross-chain DeFi applications, facilitating interaction between Bitcoin and Ethereum ecosystems.
Mezo is gaining traction as a green alternative for DeFi enthusiasts and institutions. Its energy-efficient staking model and cross-chain capabilities make it an ideal solution for decentralized exchanges, interoperable financial applications, and environmentally conscious Bitcoin initiatives.
Merlin Chain
Merlin Chain is a Bitcoin Layer 2 designed specifically for gaming and the metaverse. By prioritizing scalability and speed, it delivers the infrastructure needed to support real-time, immersive virtual experiences.
Merlin Chain leverages low-latency transaction processing and Bitcoin-based NFTs to power gaming economies and virtual worlds. It supports millions of users simultaneously, making it ideal for blockchain games, digital collectibles, and metaverse applications.
As gaming and the metaverse grow in popularity, Merlin Chain is positioning Bitcoin as a major player in these industries. Its integration of NFTs and virtual economies is drawing developers and players seeking secure, scalable platforms for creating and trading in-game assets.
Wrapping Up
Bitcoin Layer 2 solutions are redefining what’s possible with the world’s first cryptocurrency network.
By addressing Bitcoin’s scalability and functionality limitations, protocols like BitcoinOS, B2 Squared Network, Build on Bitcoin, Mezo, and Merlin Chain are unlocking new opportunities for developers, businesses, and users alike.