# Bitlayer

> Bitlayer is a projects-and-protocols that builds a Bitcoin-native Layer 2 and tooling (BitVM/rollup, bridge, and wrapped-BTC products) to enable EVM-compatible smart contracts and Bitcoin DeFi.

- Canonical URL: https://iq.wiki/wiki/bitlayer
- Categories: Projects & Protocols
- Tags: Bitcoin, DeFi, Layer2, Bridge, Infrastructure
- Created: 2026-08-31T16:55:53.447Z
- Last updated: 2026-08-31T17:28:25.419Z
- Source: IQ.wiki — the world's largest blockchain and crypto encyclopedia (https://iq.wiki)

---

**Bitlayer** is a [Bitcoin](https://iq.wiki/wiki/bitcoin) [Layer 2](https://iq.wiki/wiki/layer-2) network designed to extend [Bitcoin’s](https://iq.wiki/wiki/bitcoin) scalability and programmability while retaining its security properties. Its infrastructure includes a [proof-of-stake](https://iq.wiki/wiki/proof-of-stake)-based V1, the [Bitcoin](https://iq.wiki/wiki/bitcoin)-native Bitlayer Rollup (V2), BitVM-based [smart contracts](https://iq.wiki/wiki/smart-contract), and the BitVM Bridge for trust-minimized [BTC](https://iq.wiki/wiki/bitcoin-btc) transfers. [\[10\]](#cite-id-MOJHuqrx9cygqHrB) 

## Overview

Bitlayer is a [Bitcoin](https://iq.wiki/wiki/bitcoin) [Layer 2](https://iq.wiki/wiki/layer-2) network designed to address limitations of the [Bitcoin](https://iq.wiki/wiki/bitcoin) base layer, including transaction throughput, transaction costs, limited programmability, and the lack of a trustless [BTC](https://iq.wiki/wiki/bitcoin-btc) bridge. Its architecture is intended to combine [Bitcoin’s](https://iq.wiki/wiki/bitcoin) security and decentralization with higher transaction capacity and Turing-complete [smart contracts](https://iq.wiki/wiki/smart-contract), while supporting [Ethereum Virtual Machine (EVM)](https://iq.wiki/wiki/ethereum-virtual-machine-evm) compatibility, enabling developers to deploy [Ethereum](https://iq.wiki/wiki/ethereum)-based applications and tooling with minimal modifications. Bitlayer’s architecture has evolved through multiple versions. Bitlayer PoS (V1) launched its [mainnet](https://iq.wiki/wiki/mainnet) in April 2024, while Bitlayer Rollup (V2) is designed as a subsequent architecture based on [rollups](https://iq.wiki/wiki/rollup) and the BitVM paradigm. The project also includes the BitVM Bridge, a trust-minimized mechanism for transferring [BTC](https://iq.wiki/wiki/bitcoin-btc) assets, as well as research on [Bitcoin](https://iq.wiki/wiki/bitcoin) scaling, interoperability, and programmable infrastructure. The broader objective is to provide infrastructure for [Bitcoin](https://iq.wiki/wiki/bitcoin)-based financial applications while retaining a connection to [Bitcoin’s](https://iq.wiki/wiki/bitcoin) base-layer security model. V2 is intended to expand these capabilities through a rollup architecture and a more trust-minimized approach to [BTC](https://iq.wiki/wiki/bitcoin-btc) interoperability. [\[1\]](#cite-id-wi6sppl0tl) 

## Features

### BitVM

BitVM is a framework for implementing [smart-contract](https://iq.wiki/wiki/smart-contract)-like functionality on [Bitcoin](https://iq.wiki/wiki/bitcoin), which does not natively support general-purpose [smart contracts](https://iq.wiki/wiki/smart-contract). It represents contract logic through predefined graphs of [Bitcoin](https://iq.wiki/wiki/bitcoin) transactions that are constructed and pre-signed by participating parties, with mechanisms such as connector outputs, timelocks, and cryptographic commitments used to control state transitions and handle dynamic transaction data. BitVM1 focused on generic computation using a two-party challenge mechanism, while BitVM2 introduced permissionless challenges and was developed through work by the broader BitVM developer and research community, including Bitlayer.

BitVM contracts can support applications including verifiable computation, cross-chain bridges, and [Bitcoin](https://iq.wiki/wiki/bitcoin) [Layer 2](https://iq.wiki/wiki/layer-2) systems. Because [Bitcoin](https://iq.wiki/wiki/bitcoin) transactions are largely static once signed, BitVM uses techniques such as commit-and-reveal for unknown witness data and flexible sighash flags or application-level mechanisms for unknown recipient addresses. A contract is generally created by defining its transaction graph, having an attesting committee review and pre-sign the transactions, and publishing the finalized graph; the security model depends on the implementation and can range from trusted or honest-majority assumptions to an “honest one” model in which security requires at least one honest participant. [\[4\]](#cite-id-e9pi10swcx) 

### Bitlayer Rollup

Bitlayer Rollup (V2) is an upgrade to Bitlayer’s existing [Layer 2](https://iq.wiki/wiki/layer-2) infrastructure, replacing its sidechain architecture with a [Bitcoin](https://iq.wiki/wiki/bitcoin)-native [rollup](https://iq.wiki/wiki/rollup). It aggregates [Layer 2](https://iq.wiki/wiki/layer-2) transactions and state transitions before submitting updated state roots and cryptographic proofs to [Bitcoin](https://iq.wiki/wiki/bitcoin) [Layer 1](https://iq.wiki/wiki/layer-1), with finality tied to [Bitcoin](https://iq.wiki/wiki/bitcoin) confirmations. V2 is designed to increase transaction throughput and reduce costs while supporting Turing-complete [smart contracts](https://iq.wiki/wiki/smart-contract) and maintaining [EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) compatibility with applications developed for Bitlayer V1 and [Ethereum](https://iq.wiki/wiki/ethereum).

Bitlayer Rollup uses a hybrid proving system based on BitVM2 that combines [zero-knowledge](https://iq.wiki/wiki/zero-knowledge-proofs-zkps) validity proofs with optimistic fraud proofs. State roots are treated as valid unless challenged during a seven-day dispute period, during which participants can post a deposit to dispute an invalid state root or proof; the losing party’s deposit is awarded to the winner. The architecture also incorporates the BitVM Bridge for trust-minimized [BTC](https://iq.wiki/wiki/bitcoin-btc) transfers, Bitcoin [Layer 1](https://iq.wiki/wiki/layer-1) verification of [EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) state transitions, and flexible data-availability options that can use [Bitcoin](https://iq.wiki/wiki/bitcoin)-native or third-party infrastructure. Security depends on at least one honest and active participant monitoring the [rollup](https://iq.wiki/wiki/rollup) and initiating challenges when fraudulent activity is detected.  [\[5\]](#cite-id-ai7cp0i7rz) 

![](https://ipfs.everipedia.org/ipfs/QmZueHTEioT76yc8F54SA2oeMWXEfsWhdfkxBzk1v4owAp)

### BitVM Bridge

BitVM Bridge is a [BTC](https://iq.wiki/wiki/bitcoin-btc) bridging system developed by Bitlayer that uses BitVM smart contracts and fraud proofs to transfer [Bitcoin](https://iq.wiki/wiki/bitcoin) into the Bitlayer ecosystem and other supported networks. It is designed as a trust-minimized alternative to bridges that rely on centralized or distributed custodians, with a security model that requires at least one honest participant rather than an honest majority. The bridge initially supports Bitlayer Rollup and [Ethereum](https://iq.wiki/wiki/ethereum), with the architecture intended to extend to additional [EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) and non-[EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) networks. The bridge issues YBTC as a representation of [Bitcoin](https://iq.wiki/wiki/bitcoin) on supported networks. Users receive YBTC by locking [BTC](https://iq.wiki/wiki/bitcoin-btc) in a BitVM [smart contract](https://iq.wiki/wiki/smart-contract), with the token designed to maintain a 1:1 backing by the locked [Bitcoin](https://iq.wiki/wiki/bitcoin). YBTC is not a [liquid staking](https://iq.wiki/wiki/liquid-staking) token because the underlying [BTC](https://iq.wiki/wiki/bitcoin-btc) remains locked and is not used elsewhere, with the bridge’s security instead relying on the BitVM contract and its associated verification and dispute mechanisms. [\[6\]](#cite-id-gt2ubvrjdy) 

### YBTC

YBTC is a [Bitcoin](https://iq.wiki/wiki/bitcoin)-pegged token designed to represent [BTC](https://iq.wiki/wiki/bitcoin-btc) across multiple [blockchain](https://iq.wiki/wiki/blockchain) networks using the Bitlayer BitVM Bridge. It can only be [minted](https://iq.wiki/wiki/minting) through the official bridge, which uses the BitVM2 paradigm and a pre-signed transaction graph to control the movement of the underlying [Bitcoin](https://iq.wiki/wiki/bitcoin). The [BTC](https://iq.wiki/wiki/bitcoin-btc) backing YBTC is held in a BitVM-style [smart contract](https://iq.wiki/wiki/smart-contract) on [Bitcoin](https://iq.wiki/wiki/bitcoin), with an attester-based security model that requires at least one honest attester to prevent unauthorized withdrawals. YBTC is designed to maintain a 1:1 [peg](https://iq.wiki/wiki/currency-peg) with [BTC](https://iq.wiki/wiki/bitcoin-btc), with [BTC](https://iq.wiki/wiki/bitcoin-btc) withdrawals requiring the corresponding YBTC to be burned on the relevant chain.

YBTC is an [ERC-20](https://iq.wiki/wiki/erc-20) token that can be used in [DeFi](https://iq.wiki/wiki/defi) applications, including lending, [decentralized exchanges](https://iq.wiki/wiki/decentralized-exchange), and [staking](https://iq.wiki/wiki/staking) protocols. It is designed as a multi-chain asset, with initial support for [Ethereum](https://iq.wiki/wiki/ethereum) and Bitlayer and planned expansion to additional [Layer 1](https://iq.wiki/wiki/layer-1) and [Layer 2](https://iq.wiki/wiki/layer-2) networks. For applications, YBTC provides access to [BTC](https://iq.wiki/wiki/bitcoin-btc) liquidity across multiple chains without relying on a centralized custodian, allowing protocols to integrate a common [BTC](https://iq.wiki/wiki/bitcoin-btc)-backed asset across different [blockchain](https://iq.wiki/wiki/blockchain) environments. [\[11\]](#cite-id-wTt4DQS7Px0ipd7p) 

![](https://ipfs.everipedia.org/ipfs/QmWcTTa4NSt6jT211oYxpgySBNLBZ539rP7mZf99MTiyJz)

#### YBTC.B

YBTC.B is a wrapped version of Bitlayer Native [BTC](https://iq.wiki/wiki/bitcoin-btc) designed to provide a standardized representation of [Bitcoin](https://iq.wiki/wiki/bitcoin) across [EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) and non-[EVM](https://iq.wiki/wiki/ethereum-virtual-machine-evm) [blockchain](https://iq.wiki/wiki/blockchain) networks. It is intended to make [BTC](https://iq.wiki/wiki/bitcoin-btc) usable within [DeFi](https://iq.wiki/wiki/defi) applications such as lending markets, [automated market makers](https://iq.wiki/wiki/automated-market-maker), [staking](https://iq.wiki/wiki/staking) systems, and yield-generating vaults, while maintaining a 1:1 value relationship with Bitlayer Native [BTC](https://iq.wiki/wiki/bitcoin-btc). YBTC.B originates on Bitlayer and can be bridged to other networks, with deployed versions on external chains primarily using [Chainlink](https://iq.wiki/wiki/chainlink) CCIP for cross-chain transfers.

YBTC.B is backed 1:1 by Bitlayer Native [BTC](https://iq.wiki/wiki/bitcoin-btc) and can be minted through verified [smart contracts](https://iq.wiki/wiki/smart-contract) by depositing the underlying asset. Its V2 contract implements the [ERC-4626](https://iq.wiki/wiki/erc-4626) standard, supports deposits of Bitlayer Native [BTC](https://iq.wiki/wiki/bitcoin-btc) or Bitlayer [WBTC](https://iq.wiki/wiki/wrapped-bitcoin-wbtc), and provides functions to query the underlying assets and total supply. YBTC.B uses eight decimals compared with 18 for Bitlayer Native [BTC](https://iq.wiki/wiki/bitcoin-btc), with a fixed conversion ratio of 1e10 units; deposits are restricted to multiples of 1e10 to prevent precision loss. Users can acquire YBTC.B by bridging [BTC](https://iq.wiki/wiki/bitcoin-btc) via Bitlayer’s infrastructure, purchasing it via supported [DEX](https://iq.wiki/wiki/decentralized-exchange) [liquidity pools](https://iq.wiki/wiki/liquidity-pool), or using it as [collateral](https://iq.wiki/wiki/collateral) or as a borrowable asset on compatible lending platforms. [\[7\]](#cite-id-rr0bvgus7s) 

## BTR

BTR is the [governance token](https://iq.wiki/wiki/governance-tokens) of the Bitlayer ecosystem, with a total supply of 1 billion tokens. It is primarily used for ecosystem incentives and governance, with tokens distributed to participants such as developers, users, and partners as part of the ecosystem’s incentive mechanisms. BTR also provides holders with governance rights, allowing them to participate in decisions that affect the Bitlayer ecosystem, including voting on proposals and on adjustments to protocol or ecosystem parameters. [\[8\]](#cite-id-r7v26loru4)  [\[9\]](#cite-id-irkgeci0oy) 

## Partnerships

* [Sui](https://iq.wiki/wiki/sui)
* [Ethereum](https://iq.wiki/wiki/ethereum)
* Transporter
* [BNB Chain](https://iq.wiki/wiki/binance-smart-chain)
* [Plume Network](https://iq.wiki/wiki/plume)
* [PancakeSwap](https://iq.wiki/wiki/pancakeswap)
* [Cetus](https://iq.wiki/wiki/cetus-protocol)
* Pell
* [Wormhole](https://iq.wiki/wiki/wormhole)
* [Momentum Finance](https://iq.wiki/wiki/momentum)
* LFJ
* GitBook