What exactly are Bitcoin Layer 2 tokens?

The current Bitcoin is different from when it was first launched. The network has undergone various upgrades over the years, bringing greater functionality, security and performance. In order for Bitcoin to expand and function as a real currency rather than just a store of value, many people believe that the answer can be found in Layer 2 solutions, so the market is also paying close attention to the development of Bitcoin Layer 2. For investors, what are the Bitcoin Layer 2 tokens that are more concerned about? It is worth investing. For now, the main ones are ELA, MAPProtocol, x.TAI, Dovi and DFS. The editor below will tell you in detail.

What exactly are Bitcoin Layer 2 tokens?

The main Bitcoin Layer 2 tokens are ELA, MAP Protocol, x.TAI, Dovi and DFS coins. The following is a detailed introduction to these currencies:

1, ELA

Elastos plans to launch Bitcoin Layer 2 Network BeL2, designed to attract staking tools in Bitcoin transactions. After the news was announced, Elastos’ native token ELA rose by 56.2% within 24 hours.

BeL2 integrates the Elastos Smart Chain (ESC) with Bitcoin, allowing for more complex transactions than the base Bitcoin blockchain, including smart contracts and irreversible digital agreements that run without the need for third-party intermediaries .

2. MAP Protocol

MAP Protocol is a Bitcoin Layer 2 network for point-to-point cross-chain interoperation. On December 7, 2024, MAP Protocol announced that it had received strategic investment from Waterdrip Capital. By leveraging Bitcoin's security mechanism, MAPProtocol allows assets and users of other public chains to seamlessly interact with the Bitcoin network, enhancing network security and achieving BRC-20 cross-chain capabilities.

MAPProtocol enables BRC-20 and ORC-20 assets on the Bitcoin network to interact with tokens on other public chains through its BRC-201 cross-chain extension protocol. Its native tokens are MAP and MAPO, and different codes are used to distinguish the chains where they are located.

3. x.TAI

x.TAINetwork is a second-layer extension network of Bitcoin based on AI encryption algorithm. It combines technological innovations such as AI, DeInfra and Layer2, aiming to establish a development environment and ecology suitable for the development of Inscription.

On December 8, 2024, x.TAI showed a real-life demonstration of the XRC20 protocol encryption process. x.TAI achieves a layer 2 network environment with high privacy and low interaction cost through witness compression technology. It is the first protocol to introduce GRU and Lorentz hyperchaotic encryption system into the Bitcoin layer 2 extended network.

4. Dovi

Dovi is a Bitcoin Layer 2 network compatible with EVM smart contracts, designed to enhance scalability, reduce fees and promote a safer, decentralized financial ecosystem.

Dovi’s application scenarios include high-speed transaction functions, suitable for daily shopping and online services; developers can design and deploy complex smart contracts on the network; enterprises can carry out large-scale asset transfer and management; educational institutions and researchers can explore New applications of Bitcoin and blockchain technology in different fields.

5. DFS

DFS Network is a Bitcoin Layer 2 project under construction. After it goes online, inscriptions issued on the Bitcoin network can be traded on the DFS Network, and DeFi, games and other applications can be built on it.

According to official information, the mainnet token of DFSNetwork is DFS, with a total amount of 10 million. 1 million DFSN were distributed fairly on the BTC chain, 2.5 million DFS were distributed on the EOS chain, and 1:1 mapping was airdropped to DFSNetwork, and the remaining 6.5 million were fairly released through liquidity mining.

What is Bitcoin Layer2?

Bitcoin Layer2 is a second-layer protocol or solution built on the Bitcoin blockchain, designed to increase Bitcoin’s transaction processing speed and reduce transaction fees. There are currently many Layer 2 solutions based on the Bitcoin network, and the technical architectures are also diverse. The following is a detailed introduction:

1. Rollup:

transfers the calculation process from the main chain to the "Rollup chain". After executing the transaction on the Rollup chain, the data is aggregated and transmitted to the main chain for verification, and the main chain's Consensus security.

2. State channel:

For example, the Lightning Network opens a "green channel" outside the Bitcoin network to conduct a large number of high-frequency small-amount transactions outside the chain, and the final settlement data is placed on the chain.

3. Side chain:

Create another chain on top of the Bitcoin network to execute more smart contracts or other operations. The side chain verifies the Bitcoin main chain information before proceeding with subsequent operations.

4. Client verification:

Similar to the state channel, but there is no need for all state transition processes to be verified on the main chain node, only the main chain is used to ensure the security of the commitment.

The above is the detailed content of What exactly are Bitcoin Layer 2 tokens?. For more information, please follow other related articles on the PHP Chinese website!