This article focuses on discussing BOB's unique hybrid Layer 2 model and how it integrates the advantages of Bitcoin and Ethereum.
On May 28, the hybrid Layer 2 project BOB (Build on Bitcoin) launched the "BOB 101" user education section on its official website and published its first article, "What is a Hybrid Layer2?"—aiming to help more people understand the underlying logic and upper architecture of BOB in a zero-threshold, foolproof manner, as well as how BOB aims to achieve the vision of a "Bitcoin DeFi home."
The following is a compilation and organization based on the original text released on BOB's official website. This article focuses on discussing BOB's unique hybrid Layer 2 model and how it integrates the advantages of Bitcoin and Ethereum, placing Bitcoin at the core of the DeFi world. Enjoy:
A Rare Opportunity in the Crypto Industry
Imagine you have a large bank vault filled with gold coins; it is extremely secure, almost unbreakable. But this vault has a problem: it only allows you to deposit or withdraw gold coins and does not permit any complex financial "Lego" operations to earn interest.
This is the current state of Bitcoin. It is well-known as a great store of value and is the oldest, most recognized, and secure blockchain and asset in the crypto space. Recently, it set a new historical high, breaking the significant psychological barrier of $110,000, continuously refreshing its historical peak.
However, Bitcoin cannot build financial applications like Ethereum through smart contracts, such as Restaking, circular lending, etc. The vast majority of Bitcoin remains idle in wallets without generating returns, resulting in almost zero capital utilization for Bitcoin holders.
As shown in the chart below, Bitcoin's Total Value Locked (TVL) accounts for only 0.2% of Bitcoin's market value, while Ethereum's TVL occupies 35% of Ethereum's market value, with a 150-fold difference in capital utilization between the two in the DeFi space. BOB's goal is to narrow this gap by releasing trillions of dollars of Bitcoin liquidity and bringing it into the DeFi realm.
Bitcoin on the Bitcoin network is very secure, just like gold in a bank vault, but once you move it elsewhere to earn returns, you may face a certain degree of risk. This is because you need to cross-chain Bitcoin from the native Bitcoin network to other public chains to utilize their smart contracts for DeFi operations. During the cross-chain process, you must rely on third-party custodians or multi-signature bridges to exchange wrapped BTC, which poses the risk of centralized entities acting maliciously, potentially leading to your BTC being taken without your knowledge.
If we can allow Bitcoin to be flexibly applied in the DeFi world while maintaining the high security of Bitcoin itself throughout the process—starting from the first layer of Bitcoin, crossing to another public chain, and then deploying in applications to earn returns—then Bitcoin DeFi will erupt like the Ethereum DeFi ecosystem, perhaps even more prosperous than Ethereum's DeFi ecosystem. Building a Bitcoin-native DeFi ecosystem will become one of the hottest emerging sectors in the crypto space by 2025 and represents a rare opportunity in the crypto industry.
Bitcoin is the Core of the DeFi World
BOB's unique hybrid L2 model combines the advantages of two ecosystems—Bitcoin's security and dormant BTC capital, along with Ethereum's DeFi innovation and versatility.
The unparalleled security of Bitcoin combined with all the innovative DeFi functionalities on Ethereum aims to place Bitcoin at the core of the DeFi world, releasing trillions of dollars of liquidity currently idle on the Bitcoin network.
The unique hybrid L2 model makes BOB the best and safest place to earn returns using Bitcoin for the following three reasons:
Bitcoin Security: Last December, BOB announced its integration with the Babylon Secure Network (BSN), creating a more secure, low-threshold, and easy way for users to participate in Bitcoin staking. The security of cross-chain transactions from BTC to DeFi is guaranteed by Babylon's staked assets worth billions of dollars.
Ethereum DeFi: BOB is not only BSN but also an Ethereum rollup within the superchain ecosystem, providing fast, low-cost transactions and access to various innovative DeFi applications such as DEX, lending, NFTs, and blockchain games.
Trustless Bitcoin Deposits: Using BOB's BitVM bridge, users can send Bitcoin directly from the Bitcoin main network to BOB without trusting third-party institutions. All of this is secured by Bitcoin's own security, making it safer and more decentralized than other Bitcoin bridges that require third-party custody.
In summary: All DeFi operations on the BOB network will be secured by the Bitcoin network itself, rather than relying on any third-party institutions, which is something other Layer 2 solutions do not offer.
Hybrid L2 is the Best Place to Use Bitcoin in DeFi
Thanks to the hybrid L2 model, BOB is the best platform for using Bitcoin and Bitcoin liquidity staking tokens (LST) in DeFi. With the Bitcoin security provided by Bitcoin LST, there is a strong self-reinforcing flywheel effect.
The more LST staked and used in DeFi on BOB, the more transaction fees generated by the BOB network, some of which will be returned to stakers in the form of earnings. The more LST on BOB, the higher the returns for stakers, which will attract more LST staking, further increasing returns… and so on.
Using the BitVM Bridge for Safer Bitcoin Cross-Chain Transactions
It is well-known that existing Bitcoin cross-chain bridges often rely on centralized entities, such as Wrapped Bitcoin (wBTC). The security of these cross-chain bridges depends on the honesty of these centralized entities and the cost of malicious actions, posing a certain risk of centralized single points. If they run away, you will lose all your assets. The BitVM bridge introduces a superior security mechanism: as long as BTC L1 is secure and there is at least one honest node in the network capable of executing on-chain disputes, users can safely access BTC. Users do not need to trust any company or organization to protect their asset security.
Eliminating the need for third-party cross-chain bridges in BTC DeFi applications is an important step in unlocking Bitcoin's trillion-dollar potential in the DeFi market. The BitVM bridge also successfully solidifies BOB's position as a Bitcoin DeFi home, providing the safest and most trust-minimized way for Bitcoin DeFi and Bitcoin yield business.
Making Bitcoin DeFi More Convenient
BOB can provide users with first-class cross-chain services between the BOB network, Bitcoin network, and Ethereum network, making it easier for users to access Bitcoin DeFi on BOB. Additionally, BOB Earn allows users to deploy to Bitcoin liquidity staking tokens (LST), Uniswap, and many top DeFi applications with one click.
Looking ahead, any blockchain network that can read the Bitcoin network—such as Solana, Tron, Sui, Polkadot, etc.—will be able to connect to the BOB network through the BitVM bridge. This means fewer detours, simpler cross-chain transactions, and of course, security guaranteed by the underlying Bitcoin network.
What Does BOB's Hybrid L2 Model Mean for You?
BTC Holders: Users can transfer idle BTC to BOB's hybrid L2 layer and easily earn returns in Bitcoin DeFi through BOB's "One-Click Bitcoin DeFi" feature.
DeFi Enthusiasts: For those who are often active in the Ethereum DeFi space, they can easily cross-chain ETH and stablecoins to the BOB network and quickly exchange them for Bitcoin derivative assets. The BitVM bridge launched by BOB has Bitcoin's finality, significantly enhancing the security and decentralization of Bitcoin cross-chain transactions. Users can also directly access new liquidity from the vast BTC pool, which means larger trading volumes and new earning opportunities.
Developers: In the BOB network, developers can use the same tools as those on the Ethereum network while also leveraging Bitcoin's vast audience. Developers can utilize Ethereum's best development infrastructure to quickly launch DApps, and if they want to access other chains, BOB's hybrid L2 model can easily connect BOB with other public chain networks—while operating under the security of the Bitcoin network.
BOB's hybrid Layer 2 aims to build a DeFi ecosystem fully secured by Bitcoin's underlying security, helping to unlock the trillions of dollars of "dormant" BTC liquidity that are waiting for the right opportunity to earn returns. For Bitcoin holders, whether they are small retail investors or large institutional investors, achieving this goal requires the security of the Bitcoin network itself, all thanks to BOB's hybrid Layer 2 model.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
