In the second half of the BTC ecosystem, what other projects are worth paying attention to?

Author: Evie Source: X, @0xEvieYang 

"The extremely high TVL can no longer arouse the excitement of users, but instead makes people discouraged. I look forward to seeing more innovations in BTC's native technology or new ways of issuing assets."

"Thinking back to the days when group friends stayed up late to play inscriptions and rush for IDO at the end of last year, it was quite lively and interesting."

Since the inscription craze last year, BTC has become one of the engines of this bull market. BTC has entered the Web3 multi-chain ecosystem through scenarios such as BTC L2 and BTCFi, and has even become the main component asset of some Ethereum L2 and protocols, which has revitalized the long-standing BTC on-chain assets worth hundreds of billions of dollars.

Compared with the extreme nesting dolls and involution of ETH,BTC holders have lower requirements for expected returns and new users are more enthusiastic about participating, so BTC has become a rare new flow in the on-chain ecosystem.

In addition, the innovative assets of the Bitcoin mainnet, such as inscriptions and runes, have a huge community base due to the characteristics of fair launch, becoming another choice for secondary market users compared to VC coins.

However, starting from April 2024, the BTC ecosystem has entered a period of silence. As far as the data dashboard of GeniiData is concerned, the transaction volume of Ordinals in May 2024 was only half of that in April.

Even though the market is quiet, many BTC-related projects are still being built. As of August 12, there are more than 300 BTC ecological projects listed on @RootDataLabs. I hope that the BTC ecosystem in the second half will be revitalized:

1. BTC L2: Let BTC and BTC innovative assets have more landing scenarios and open up more gameplay under the premise of security;

2. BTC Staking/Restaking: I hope to see more technological innovations, so that BTC can play the advantages of large scale and low cost with a market value of hundreds of billions, and empower scenarios that require Staking/Restaking security;

3. BTCFi: Based on the broad consensus and brand awareness of BTC, CeFi and DeFi will be better connected, providing DeFi users with stable and considerable returns, and bringing open, transparent and permissionless freedom to CeFi users.

So before the new round of BTC ecological heat wave comes, which projects are worth paying attention to? Share my watchlist with you.

BTC expansion and innovation in the chain ecosystem

Previously, @weihaoming mentioned that the BTC ecosystem can be roughly divided into two factions: native technology faction and user-oriented faction. The native technology faction mainly explores the potential of Bitcoin based on its unique UTXO and scripting language and attempts to develop projects; the user-oriented faction uses existing conditions to quickly develop new products based on the needs of market users.

In the role of the chain, the difference between the two factions is particularly obvious. Even though BTC L2 has had a wave of popularity before, there is still BTC L2 with millions of dollars in financing that is dormant, and BTC L2s, which started last year, is also continuing to build.

For example, @BSquaredNetwork has two main products: one is B² Rollup, a Bitcoin rollup based on proof of commitment; the other is B² Hub, the DA layer of the Bitcoin ecosystem. The project has received investments from funds such as HashKey Capital, OKX Ventures, and IDG.

B² Network recently launched the Buzz Farming event, where users can stake BTC to obtain B² tokens and potential airdrops for related LST projects. According to the official website data, its current staked amount is $159.95M.

Buzz Farming has currently launched 6 strategies. One of the strategies is to obtain Babylon's income through Bedrock, and another strategy is to obtain @UniRouterBTC's U points and $APT through staking.

I should be considered to have come into contact with the B² team at the end of last year, and we have communicated and cooperated many times during this period. I look forward to B² Network bringing more innovative gameplay and mechanisms in the future to release the long-accumulated energy!

The "native technology" BTC expansion solution I have recently paid attention to is @fractal_bitcoin produced by the UniSat team. After the Fractal test network was officially launched yesterday, $PIZZA also rose by about 20% yesterday.

In addition, @NervosNetwork of the same faction is also preparing ecological projects.

BTC liquidity pledge and re-pledge opportunities

BTC liquidity pledge/re-pledge @babylonlabs_io is undoubtedly the protagonist of the next BTC ecological recovery. Its latest round of financing is valued at US$800 million, with a financing amount of US$70 million, led by Paradigm. Previously, Binance Labs also participated in the investment.

OKX Wallet's Discover page has opened a Babylon zone. Friends who want to explore the Babylon ecosystem can directly access it through @okxweb3, which is safe and convenient.

There are several projects that pledge BTC liquidity, including @Lombard_Finance, @LorenzoProtocol, @Bedrock_DeFi, and @SolvProtocol. The first three have received investment support from Babylon/Babylon co-founder, and are currently mainly focused on Babylon:

1. Lombard: After users stake their BTC to Lombard, they will stake it to Babylon to earn income, and at the same time, BTC will be minted into LBTC at a 1:1 ratio. The first phase of LBTC will be issued on Ethereum and can be used in DeFi applications. You can now join the waitlist on the official website.

2. Lorenzo: After users stake BTC to Lorenzo's multi-signature wallet, they will receive stBTC. This part of BTC will also be staked to Babylon. In addition, Lorenzo also combines the separation of principal and interest to issue the income accumulation token YAT and the proof of stake token SPT. Currently, Lorenzo has launched pre-launch staking and staking agent beta mainnet.

3. Bedrock: This project was initially developed around the Eigenlayer ecosystem, but recently began to participate in the Babylon ecosystem, aiming to support Ethereum's wBTC staking on Babylon. Users can obtain UniBTC after staking wBTC. Now the relevant staking is open.

4. Solv: This project has been under construction since 2021, and received investment from Binance Labs in 2022. Since Solv took advantage of BTC's momentum in April this year, its TVL has grown significantly. Currently, SolvBTC has reached 900 million US dollars, supporting 7 chains including ETH, BNB, Mantle, Merlin, etc. I look forward to Slov's next success!

Exploration and innovation of applications and infrastructure

Applications and infrastructureAlmost every chain has its own DeFi three-piece set, and other ecological applications are changing very quickly. Applications around BTC, such as @unisat_wallet, @MagicEden, @uxuycom, etc., are very familiar to everyone, so I won’t go into details here.

Recently, I communicated with the @BefiLabs team and learned that as a trading terminal for BRC20, Runes and Ordinals, they are also continuously optimizing and upgrading their products, and establishing connections with partners in each ecosystem, hoping to provide BTC layer 1 asset trading users with a smoother trading experience.

Regarding infrastructure, I pay more attention to @nubit_org, which aims to build a scalable Bitcoin native DA. The project announced a seed round of financing of 8 million US dollars in June this year, led by Polychain, and some active overseas funds also participated.

Based on the BTC ecosystem-related projects I have sorted out before, I found that most of them are related to staking. In my opinion, the pure TVL gameplay has weakened its appeal to users after the issuance of Manta, Merlin, Blast and other coins. The extremely high TVL can no longer arouse the excitement of users, but instead makes people discouraged.

In contrast, I still hope that there will be more innovations in BTC native technology, or new ways of issuing assets.

Thinking of the days when group friends stayed up late to play inscriptions and rush IDO at the end of last year, it was still quite lively and interesting.