Bittime - Bitlayer is emerging as a rising star in the Bitcoin ecosystem with its unique BitVM implementation and ability to attract user liquidity despite volatile Bitcoin prices. What is Bitlayer and its complete explanation? Read this article until the end!
What is Bitlayer?
Source: Techflowpst.com
Bitlayer is a second layer (L2) protocol in the Bitcoin network developed with the aim of improving the scalability and efficiency of Bitcoin transactions. Using the BitVM implementation, Bitlayer enables the execution of smart contracts and decentralized applications (dApps) on the Bitcoin network.
This protocol is designed to attract user liquidity with low gas fees and a streamlined user experience. Bitlayer has demonstrated rapid growth and succeeded in attracting the attention of various projects and investors in the blockchain ecosystem.
The Bitlayer team recently participated in GM Vietnam Blockchain Week and will be presenting at the EthCC conference next month.
It aims to actively promote their work and the BitVM philosophy. Bitlayer's median gas fee is currently quoted at $0.4 (around Rp. 6,400), and the protocol's total value locked (TVL) has almost tripled to around $354 million (around Rp. 5.66 trillion).
As a result, Bitlayer is ranked second in the Bitcoin network TVL ranking, only behind Merlin Chain. Interestingly, Merlin Chain's TVL more than doubled in one day last month. The Bitlayer ecosystem has grown to more than 100 decentralized applications (dApps).
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Bitlayer Rapid Growth
Bitlayer has only been active for a few weeks and is already showing incredible growth. The network has surpassed 1 million transactions, with activity peaking alongside the rise in Bitcoin prices.
In our last report, we briefly covered the Ready Player One airdrop, a $50 million (around Rp. 800 billion) event for developers and protocol teams, with $20 million (around Rp. 320 billion) allocated for the leaderboard competition.
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Since then, Bitlayer has implemented a new $23 million (around IDR 368 billion) event called the Mining Gala, which just ended this week.
In this article, we will detail some of the key partner projects participating in this event, which account for the majority of Bitlayer's TVL, user base, and activity.
Avalon Finance
Avalon claims to be the first “CeDeFi” lending marketplace. The protocol has a TVL of over $120 million (around IDR 1.92 trillion) on Bitlayer, and its native tokens AVAF and esAVAF can be staked to receive protocol revenue and esAVAF rewards.
The main product of this modular protocol is an overcollateralized lending marketplace, where users can deposit funds into separate pools to use as collateral for loans.
Both major and minor tokens can be deposited, but currently only Bitcoin can be used as collateral for loans.
Source: Techflowpst.com
Currently, nearly $86 million (around IDR 1.376 trillion) of WBTC has been lent, with total deposits of around $180 million (around IDR 2.88 trillion). Deposits earn 2x points, while loans earn 6x points. As a result, the loan limit
The maximum 1,300 WBTC is almost full, with a utilization rate of around 43%. Borrowers can use up to 60% loan-to-value (LTV), 85% liquidation ratio, and 10% liquidation penalty. Users can track their accumulated points on the project's integrated leaderboard.
Pell Network
Pell Network has a TVL of around $95 million (around IDR 1.52 trillion) on Bitlayer. Pell Network provides a variety of services for the growing Bitcoin L2 market, including network security features, blockchain operations infrastructure, and yield enhancement.
Pell Network also participates in Bitcoin re-staking, aiming to diversify L2 Bitcoin returns and improve the security of this network.
Source: Techflowpst.com
On Bitlayer, users can “re-stake” various assets to receive Pell point rewards of 15%. In addition to WBTC, users can also deposit various Bitcoin LSDs into the protocol, with stBTC accounting for the majority of Bitlayer's TVL.
Users can receive additional point rewards for first use of the protocol and extended deposit times, in addition to earning points through some basic social interaction tasks.
On the backend side, Pell Network essentially pools the returns of native Bitcoin staking and the returns from LSD, creating a network where stakers can vote to validate new modules built in the ecosystem.
Also read How to Buy Crypto How to Buy BTC
BitCow
BitCow is the third largest protocol on Bitlayer with a TVL of around $35 million (around IDR 560 billion). BitCow acts as an automated market maker (AMM) providing centralized liquidity and stablecoin exchange services. This protocol is specifically designed to serve the growing Bitcoin L2 ecosystem.
In version v1, BitCow provides stable exchange services for stablecoins and LSD assets while keeping gas fees minimal and maximizing capital efficiency.
The equilibrium price is also adjusted over time to account for the gradually increasing value of the LSD asset.
Also Read: Hashdex Bitcoin ETF: Adding to the Line of Spot Bitcoin ETFs in the United States
BitCow's V2 version focuses on centralized liquidity for swaps on volatile currency pairs. Features include automatic pricing, 0 IL, and transparent P&L information. Automatic pricing is achieved through the use of external oracles, allowing centralized liquidity without the need to manage price ranges.
All liquidity for a particular asset is automatically concentrated around the price determined by the oracle. This compromise approach results in higher returns for LPs without the need for LP management protocols and complex trade-offs regarding centralized liquidity.
Source: Source: Techflowpst.com
In version v2, BitCow also adopted a dual-token LP solution, where one pair represents the volatile asset in the pair and the other represents the stablecoin. This allows LP holders of volatile tokens to have rights over their assets when the asset value changes.
While stablecoin LP holders remain market neutral and collect trading income from the pair. Additionally, the protocol's Trumeme feature allows users to create their own memecoins on the testnet and provides initial liquidity.
Conclusion
With this development, Bitlayer not only solidifies its position as an important player in the Bitcoin ecosystem, but also shows great potential for the future.
With ever-growing innovation and active participation in global blockchain events, Bitlayer is poised to continue growing and attracting more liquidity and users. Protocols such as Avalon Finance, Pell Network, and BitCow demonstrate that Bitlayer has a dynamic and diverse ecosystem, ready to support a wide range of user needs in the growing Bitcoin L2 market.
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How to Buy Crypto on Bittime
You can buy and sell crypto assets in an easy and safe way through Bittime. Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet.
For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn Complete Guide How to Buy Crypto on Bittime.
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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