BTC ecological competition in the second half: Who is the optimal solution for value carrying?

2025-08-23 16:22:07

Collection

Observing the different technical paths of the BTC ecosystem, we can see that we are still in a development phase of the BTC ecosystem. The true prosperity of the BTC ecosystem is still far from arriving. Therefore, the competition for the BTC L2 route has just begun.

Author: Evan Lu, Waterdrip Capital

Since the Ordinals protocol gained popularity in 2023, it has sparked a vigorous construction of the BTC ecosystem, which has completed in just a year and a half the evolutionary path that ETH took over many years. By the end of Q1 this year, the BTC ecosystem's 1.0 phase has gradually come to a close. BTC's price has also changed from the usual summer slump, continuously breaking through $110,000 and $120,000 per coin, reaching a new ATH moment; however, the market performance of tokens related to the BTC ecosystem on exchanges has been less than satisfactory. A technology's journey from proposal to development, implementation, and widespread adoption cannot be completed in just one year. Not to mention the practice of new technologies on the largest value storage network, BTC.

By observing the different technological paths of the BTC ecosystem, we can see that we are still in a developmental phase. The true prosperity of the BTC ecosystem is still far from realization. Therefore, the competition for the BTC L2 route has just begun.

BTC Ecosystem 1.0 and 2.0

Since BTC has been widely recognized as "digital gold," why is there still a need to promote the development of the BTC ecosystem? This is because the scripting language of the BTC network itself is extremely simplified, coupled with the PoW consensus mechanism, which ensures a very high level of security and decentralization; however, it also limits Bitcoin's scalability and programmability. As the underlying anchoring asset of the entire crypto industry, BTC still has a lot of value that has not been fully released. Imagine if only 10% of BTC (approximately 2.1 million coins) were used in DeFi, at a price of $100,000 per coin, it would release up to $210 billion in asset liquidity!

From the perspective of ecosystem composition, the BTC ecosystem can be divided into an infrastructure layer (L2) and upper financial protocols (BTCFi); the following text will mainly focus on the interpretation and comparison of the BTC infrastructure technology paths.

In the 1.0 era of the BTC ecosystem, its typical feature is "TVL first" ------ first transferring BTC to the L2 network through asset bridges or custodians, and then deploying DeFi protocols on L2 to activate BTC's liquidity. This is also the early play of ETH sidechains, with Polygon being a well-known representative; this is also very friendly to crypto users coming from the ETH era, as the logic is essentially EVM's L2 ------ only the underlying network is BTC, so this technological path can quickly accumulate funds and user bases; however, the shortcomings are particularly obvious: the security of BTC assets cannot be guaranteed.

The 2.0 era of the BTC ecosystem returns to the essence of technological innovation: how to achieve breakthroughs in security, efficiency, and native compatibility. From the launch of the Lightning Network's mainnet to the active promotion of technologies like ZK Rollup, RGB, and BitVM, we see more and more projects beginning to explore how on-chain native assets can achieve safer, more efficient, and more native yield generation and circulation on L2. For developers, this means a more promising space for innovation; for VCs, this represents an important turning point for the BTC ecosystem from "valuation-driven" to "PMF-driven."

Overview Comparison of BTC L2 Technology Paths

Based on the existing technology stack, several technology paths can be divided as shown in the table below. However, if we delve deeply into each technology path and the projects they represent, we will find that even different technology paths may share the same solutions, and there may be subset relationships between different technologies and stacks.

Comparison of different technology paths of BTC L2, data source: https://worried-eagle-e5b.notion.site/BTC-21b34b2a8d7a80cb83c1d0021e3a5696

Based on six well-known technology paths, this table visualizes and compares the TVL data and the technologies used by 15 BTC L2 projects:

Overview of BTC L2 development, data source: https://worried-eagle-e5b.notion.site/BTC-21b34b2a8d7a80cb83c1d0021e3a5696

It can be seen that the TVL of most L2s has significantly decreased due to market influences. Additionally, although the TVL data of the Lightning Network has increased compared to last year, the amount of BTC locked in the Lightning Network this year has undoubtedly decreased compared to last year's BTC quantity.

Overview of Different Technical Paths of BTC L2

The Most Traditional L2 Solution for BTC: Lightning Network

It can be said to be one of the earliest L2s on BTC. Its basic mechanism is that users create a 2-of-2 multisig address on-chain, building a bidirectional payment channel, and ensuring that both parties can safely settle to the main chain with the latest state after multiple off-chain interactions through a Hash Time-Locked Contract (HTLC). Throughout the process, only two transactions to open and close the channel need to be written to the main chain, while a large number of intermediate transactions are completed off-chain, significantly saving block space and improving efficiency.

However, the early Lightning Network only supported BTC as a payment currency, greatly limiting the application scenarios. To address this, Lightning Labs specifically launched the Taproot Assets protocol (hereinafter referred to as TA protocol), which supports the issuance of native assets on the BTC network while seamlessly integrating with the Lightning Network. The TA protocol is based on BTC's UTXO model and the Taproot upgrade of 2021, with asset states recorded in a Sparse Merkle Tree (MS-SMT) structure, only writing the root hash of transaction data on-chain, ensuring the cleanliness of data on the Bitcoin main chain. Additionally, TA assets can also be embedded into Lightning Network channels for rapid transfer, realizing the idea of "circulating stablecoins on the Bitcoin network."

Moreover, not only stablecoins but also RWA assets and project tokens can be issued on BTC, and the BTC multi-asset trading network will truly be constructed with the introduction of the TA protocol.

Development Progress

As of June 2025, the Lightning Network has been online for 10 years, running stably with over 16,000 nodes and 41,000 active channels; last year, when BTC broke $100,000 per coin, the total locked capacity had already exceeded 5,000 BTC. It currently maintains around 4,000 BTC.

Overview of Lightning Network data, data source: https://mempool.space/zh/lightning

In Q1 of this year, Tether, the company behind USDT, announced that it would issue USDT into the Lightning Network ecosystem through the TA protocol, indicating Tether's recognition of the Lightning Network.

Lightning Lab (the parent company of the Lightning Network) announces Tether's integration into the Lightning Network, data source: https://x.com/lightning/status/1885083485678805424

Additionally, the ecosystem based on the Lightning Network is gradually taking shape, such as the financial infrastructure protocol Lnfi, which aims to become the preferred platform for BTC and Taproot assets, covering the entire process of asset issuance, fundraising, yield, and trading. The core product LN Exchange has a daily trading volume of $30 million, and LN Node provides over 5% trustless BTC yield. Recently, Lnfi collaborated with Tether and Lightning Labs to discuss the opportunities and challenges of issuing stablecoins on the Lightning Network in X Space.

X Space of USDT ON LIGHTNING, data source: https://x.com/i/spaces/1vOxwXmjVbRKB

Furthermore, "AI Agent + micropayments" is gradually building a new payment system relying on the security of the BTC network, with AIsa being a typical representative. Its principle utilizes the millisecond response characteristics of the Lightning Network and the strong security of the BTC network to solve the massive micropayment problem that traditional systems struggle to support. It provides real-time, efficient, and low-cost payment capabilities for AI service providers and enterprises. AIsa supports operations such as automatic micropayments of only $0.0001 per API call, real-time settlement of DePIN nodes, and intelligent optimization of cross-chain paths, requiring almost no human intervention.

Limitations and Challenges

Although the Lightning Network has matured significantly in recent years, its scalability is still limited by network effects and channel path design, with limited network capacity. While the TA protocol addresses the shortcomings of the asset layer, the requirement for users to build their own nodes to ensure security raises the participation threshold, and the completeness of the product still needs to be resolved.

For instance, BitTap provides users of the TA protocol with the right to self-custody wallets. BitTap focuses on solving the decentralization and usability issues of the Lightning Network and TA ecosystem. They have launched a decentralized browser plugin wallet and are about to launch a stablecoin payment wallet app, allowing users to make stablecoin payments and transfers on both the Lightning Network and TA layers, while also supporting secure and free cross-layer transfers (Bridge) of stablecoins between the Lightning Network and TA layers.

Native Ledger Expansion: Bitcoin Thunderbolt

Just last month, the Bitcoin Thunderbolt network officially launched its mainnet. This was disclosed in an official press release by HSBC. This marks the first time a traditional financial industry authority has shown a positive response and attention to blockchain infrastructure represented by BTC.

Strictly speaking, Bitcoin Thunderbolt is not a traditional BTC L2, but a soft-fork compatible native ledger expansion solution based on the BTC mainnet. Its core technology lies in extending the OP_CAT instruction of the BTC scripting language, combined with UTXO Bundling technology, to achieve the execution of high-performance contracts.

Differences and Similarities with the Lightning Network:

Unlike the Lightning Network, which requires payment channels to remain open for off-chain interactions; Bitcoin Thunderbolt adopts a non-interactive asynchronous design, allowing users to complete off-chain UTXO ownership transfers without direct trust or continuous connection. The key lies in introducing a Byzantine Fault Tolerance Committee (BFT Committee) to manage Schnorr signatures, enabling off-chain delegation of asset ownership and on-chain final confirmation. Under the 3f+1 model, this mechanism can tolerate up to f malicious nodes, ensuring that transactions remain secure and consistent under asynchronous network conditions.

Additionally, through UTXO Bundling technology, Bitcoin Thunderbolt can aggregate multiple UTXOs for processing, achieving transaction speeds and efficiencies over 10 times that of the BTC network. In terms of asset protocols, Bitcoin Thunderbolt proposes a unified standard for BTC layer assets called Goldinal, and with its developed BitMM (Bitcoin Message Market) system, it realizes a native on-chain AMM on the BTC network.

In design, Bitcoin Thunderbolt uses verifiable and adjustable signature components to achieve a recursive off-chain UTXO transfer structure, running through Bitcoin Core's native logic. This acceleration mechanism, starting from the main chain architecture layer, not only maintains the security and censorship resistance of BTC but also supports the transfer of BTC native assets, including BRC-20 and Runes.

Development Progress

Bitcoin Thunderbolt is driven by some OG miners, HSBC, and BTC core developers, as well as contributors from the Nubit community, making it one of the few protocols in the current BTC technology stack with formal academic endorsement.

Currently, Bitcoin Thunderbolt is only accessible to users who have obtained a Boosting Code. This code is distributed in limited quantities by core contributors like Nubit through the community and comes with rare BTC native airdrop rewards.

As of mid-June, Bitcoin Thunderbolt's mainnet has nearly 50,000 users, with a total transaction count approaching 4 million:

Overview of Bitcoin Thunderbolt on-chain data, data source: https://data.thunderbolt.lt/?new

Limitations and Challenges

The technology stack of Bitcoin Thunderbolt shows us another possibility for implementing BTC L2. Since the mainnet has not yet launched, its product PMF still needs market validation; on the other hand, while the BFT committee model is superior in security to traditional bridging solutions, whether it can gain widespread acceptance from the extremely decentralized BTC community remains a question mark.

Merged Mining

Merged Mining is a technology that allows miners to mine multiple blockchains simultaneously without adding extra computational resources. Among them, Stacks and Fractal are two representative projects that use merged mining mechanisms, but they adopt different solutions in consensus mechanisms and block validation mechanisms. Stacks uses a unique Proof of Transfer (PoX) consensus mechanism. In this mechanism, Stacks miners send BTC on the BTC mainnet to bid for the right to generate Stacks blocks, and successful miners can obtain block packaging rights and corresponding mining rewards.

Bitflow is a DEX based on the Stacks mainnet, supporting the trading of BTC, Stacks tokens, and various BTC native assets such as BRC-20 and Runes. Additionally, Bitflow launched the first Rune AMM based on Stacks in December 2024, which is the first Rune AMM on BTC L2.

Core has made slight improvements to the consensus mechanism based on merged mining: Core's consensus mechanism is called Satoshi Plus, which combines Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS); the specific implementation principle is that BTC miners delegate their computing power to validators on the Core chain, thereby utilizing BTC's strong mining infrastructure to provide security for the Core chain. This portion of computing power is referred to as "Delegated Proof of Work (DPoW)," executed by Bitcoin miners and mining pools; at the same time, CORE token holders can stake or delegate their tokens to validators, participating in network security maintenance and governance. This portion of rights is referred to as "Delegated Proof of Stake (DPoS)." Through this combination, Core Chain incorporates BTC miners into the security of Turing-complete smart contracts, unlocking these miners' functions and utilities beyond simply maintaining the BTC ledger, and providing them with pure additional income rewards in the form of CORE tokens.

Fractal adopts an expansion solution, with its technical principle being to use a recursive expansion structure to create multiple independently operating extension layers on the BTC mainnet, forming a tree structure to improve transaction processing capacity and speed. At the same time, Fractal retains the PoW mechanism while introducing a hybrid mining mechanism called "Cadence Mining," where for every three blocks produced, two are generated through permissionless mining, and the remaining one uses BTC's merged mining.

Additionally, Fractal Bitcoin has re-enabled the OPCAT opcode, which existed in early versions of BTC but was long disabled. The function of OPCAT is to concatenate two strings into one. Theoretically, a script using OPCAT can expand 1 byte of data into over 1 TB of content. Without strict limitations, this infinite expansion characteristic could be maliciously exploited for DoS attacks, potentially overwhelming nodes or causing network congestion. For this reason, OPCAT was disabled by the community in its early days. Now, the "purified" OPCAT adopted by Fractal provides developers with a more flexible way to handle scripts, especially showing potential in on-chain large integer calculations and smart contract functions. Despite the improved technical mechanism, the reactivation of OPCAT may still pose security risks in extreme scenarios.

Current Development Status:

Fractal Bitcoin is currently taking shape, with a market capitalization of approximately $20.12 million, a daily trading volume of 1.43 million FB, and over 1.76 million active addresses. Its merged mining computing power reaches 648.13 EH/s, with a mining difficulty of 0.01 t, still in the early stages.

Overview of Fractal on-chain data, data source: https://www.oklink.com/fractal-bitcoin

RGB & RGB++

On August 7, 2025, the long-awaited BTC expansion solution RGB protocol finally went live on the BTC mainnet.

RGB originates from a technical architecture proposed by the LP/BNP association, which is an off-chain asset issuance and smart contract protocol based on the UTXO model of the BTC network. One of the most praised technical points of RGB is that the data running on RGB will be compressed and encapsulated into each UTXO on the BTC network. Through "Single-use Seals" and "Client-side Validation" mechanisms, it achieves private changes and validations of asset states. Each asset state is bound to a specific BTC UTXO, and when that UTXO is spent, the asset state is updated accordingly. This design enhances privacy by allowing asset ownership and state changes to occur without being publicly disclosed on-chain. The RGB protocol is also compatible with the Lightning Network and has the capability to build DeFi logic.

RGB version 0.12 launched, data source: https://x.com/lnp_bp/status/1943318227854950809

Bitlight Labs: The First Wallet Supporting RGB Assets, Official Member of the RGB Association

Bitlight Labs is committed to leading the original BTC Fi by developing native smart contract infrastructure for BTC and the Lightning Network. Not only is it a board member of the RGB protocol standard-setting association INP/BP, but it is also a core contributor to the development of the RGB protocol, making it an indispensable core product of the RGB ecosystem.

The product under Labs ------ Bitlight Wallet is a wallet specifically designed for the Lightning Network and RGB protocol. Recently, it launched the first minting event for the asset token "RGB" based on the RGB mainnet alongside the official launch of the RGB mainnet.

BitMask Wallet:

Bitmask is the first wallet to support NFT assets on the RGB protocol. The team behind Bitmask is also one of the earliest contributors to the RGB protocol, focusing on privacy and user asset control in product development. Recently, BitMask is advancing the full interoperability of RGB and RGB++, and is currently preparing for the mainnet version launch to truly achieve a combination of privacy, programmability, and usability on the BTC network.

From RGB to RGB++:

Nervos (CKB) is a popular project that uses RGB logic to achieve BTC L2 and has proposed the concept of RGB++. RGB++ introduces "homomorphic binding" technology, mapping BTC's UTXO to Nervos CKB's Cell, utilizing CKB's Turing-complete smart contract capabilities and on-chain verification mechanisms to enhance the efficiency and security of asset state management. In RGB++, asset state changes are recorded not only on the BTC chain but also have corresponding transactions and state verifications on the CKB chain, achieving collaborative verification on-chain and off-chain.

Although RGB++ realizes asset mapping between BTC and CKB; the cross-chain interaction based on the characteristics of the RGB protocol is still not simple enough when handling certain specific transactions, posing security risks.

Following the ETH L2 Approach: ZK-Rollup

The core of Rollup lies in packaging a large number of off-chain transactions to generate cryptographic proofs (Proof) and submitting them to the main chain for verification using ZK technology.

One of the Hottest BTC L2s

Merlin is a BTC L2 network that continues this idea and is also an EVM-compatible BTC L2. Merlin adopts a multi-party computation (MPC) wallet solution, jointly managing user assets with Cobo (a cryptocurrency custody institution in HK). Additionally, in terms of verification technology, Merlin still uses ZK-Rollup technology, compressing a large amount of transaction data and submitting it to the BTC mainnet to ensure data integrity and security.

Since its launch on the mainnet, Merlin has become one of the most watched Layer 2 projects in the BTC ecosystem. Reports indicate that its total locked value (TVL) reached $3.5 billion within 30 days of launch, attracting over 200 projects to deploy and operate on its platform. Merlin Chain supports various BTC layer native assets, such as BRC-20, BRC-420, etc., and expands its ecosystem's breadth by being compatible with ETH.

Enhancing the Security of BTC Bridging

B² differs from traditional monolithic Rollups by adopting a "1.5 layer architecture": the Rollup layer is responsible for transaction execution and state updates, while the Data Availability (DA) layer operates independently and is responsible for storing raw transaction data. These data are periodically submitted to the Bitcoin mainnet after undergoing off-chain labeling and organization, achieving confirmation of finality.

The DA layer of B² Network ------ B² Hub ------ belongs to Layer 1.5, where batch data is first processed with Reed-Solomon + KZG encoding slicing, and then the zero-knowledge proof submitted by Layer 2 is aggregated into a Taproot commitment submitted to the Bitcoin mainnet, inheriting the finality and immutability of the Bitcoin network.

B² Network employs a decentralized blob storage and light node sampling mechanism, allowing any validator to randomly sample a very small proportion of block slices to detect data completeness with high probability, significantly reducing synchronization and verification costs.

In terms of consensus, B² Hub only needs to submit short commitments and validity proofs, with the mainnet no longer bearing the burden of large-volume data, while the Rollup batch publisher is responsible for availability, forming a modular architecture of "validity outsourcing + availability guarantee." By decoupling DA from the execution layer, B² Rollup can scale in parallel and update shards, while the security boundary remains anchored to the Bitcoin chain, balancing high throughput, low cost, and L1-level security.

This approach has two benefits: one is that the modular design allows for unlimited horizontal scaling without making any modifications or upgrades to the BTC network; the other is that through the DA layer of B² Network ------ B² Hub, it can aggregate storage proofs and state transformation proofs to submit to the Bitcoin network, integrating the security of the Bitcoin network.

However, since the final confirmation of L2 transactions requires prior confirmation and aggregation through B² Hub, followed by on-chain confirmation by the BTC network, and is considered passive confirmation on the BTC network, it belongs to an optimistic model; additionally, the zero-knowledge proof aggregated into a Taproot commitment for optimistic verification on the BTC network is still in the POC stage and has not yet been fully realized.

Project Progress: From Technical Implementation to User Ecosystem

As of now, BSquare's total locked value (TVL) has surpassed $600 million, with peak daily on-chain trading volume reaching $900 million and 500,000 active users on the platform. The platform ecosystem covers over 100 DApps, encompassing DeFi, lending, AI Agent applications, and more.

Overview of BSquare on-chain data, data source: https://www.bsquared.network/

Meanwhile, BSquare has also launched the first BTC yield mining pool "Mining Square," which is a "balance treasure" prepared for miners, providing a solution with native BTC yield for miners. Currently, this mining pool has already accounted for 1% of the total network computing power and ranks among the top 10 in terms of mining pool computing power.

Implementing a Turing Machine with BTC Script? Decoding BitVM

BitVM is an extension protocol built on the BTC mainnet, with the core goal of supporting any verifiable computation in a universal virtual machine environment without changing the consensus mechanism. Its principle draws on the idea of optimistic rollup: most computations are completed off-chain, and only in the event of a dispute are the relevant computation processes submitted on-chain for verification in the form of "fraud proofs." Similar to Ethereum's Arbitrum, BitVM uses off-chain computation + on-chain verification mechanisms, but its uniqueness lies in utilizing Bitcoin's scripting system (Bitcoin Script) to construct "logic gate circuits," thereby simulating a Turing-complete virtual machine (similar to the Qin Shi Huang's human column computer in the Three-Body game).

BitVM does not directly run EVM or WASM on-chain but translates these high-level virtual machine operations into combinations of the most basic logic gates (such as AND, OR, NOT, etc.) in Bitcoin scripts, constructing a massive "fraud verification circuit." All transaction data and computations are processed off-chain, and only when a challenge occurs is the data and computation steps (in the form of Merkle Proofs, etc.) submitted on-chain.

BitVM 2 is an optimized version of the original BitVM, introducing a more modular computation structure and circuit compression mechanism, while also incorporating interactive fraud proofs, time-lock scripts, multi-signatures, and other mechanisms to enhance the protocol's practicality and security. BitVM 2 places greater emphasis on optimizing on-chain data submission volume and attempts to introduce script opcodes like OP_CAT that may be activated in the future to improve circuit construction efficiency.

Current Development Status

The BitVM route is gradually transitioning from theory to practice, with the representative project being Citrea, which executes a large number of transactions off-chain and submits the execution results and proofs to the BTC network for verification through BitVM. This achieves efficient expansion and security for BTC L2. Citrea is also the first solution capable of achieving general L2 settlement on BTC, with all proofs verified natively within the blocks of the BTC network. Currently, Citrea's mainnet has not yet officially launched and is still in the testnet phase.

For example, Goat Network is exploring the possibilities of BitVM 2. Goat's white paper showcases a fraud proof mechanism based on circuit logic and Merkle tree structures. Goat emphasizes expanding computation on BTC into a Turing-complete state machine and attempts to build a new BTC L2 framework that allows smart contract execution and asset interaction to be completed natively on the Bitcoin main chain. Goat's implementation also includes the integration of a data availability layer (DA layer) and circuit compression mechanism optimization, pushing BitVM from an experimental solution to a practically deployable one.

As of June this year, Goat Network's locked value has surpassed $100 million.

Top chains by TVL launched each month of the year, CryptoDiffier; data source: https://x.com/GOATRollup/status/1929596963286114614

Despite the clear advantages of the BitVM series of protocols: extreme native compatibility, achieving Turing-complete computation without changing BTC consensus, and possessing high security and native characteristics; its structure inherently supports fraud proofs, low data on-chain rates, and extreme decentralization.

However, the disadvantages of BitVM stem from its technology: the logic gate circuits constructed from BTC Script to simulate EVM or WASM will be epic in complexity and size, making the development complexity of BitVM extremely high and the workload for circuit construction very large. Additionally, there is currently a lack of a mature developer ecosystem and standardized tools.

Multiple Paths Progressing Together, the Battle for Value Carrying is Still Undecided

Each solution for BTC L2 has its own focus in technical implementation. For example, the Lightning Network focuses on payment efficiency, having formed a mature node network suitable for micropayments and off-chain settlements after years of development. RGB and RGB++ pay more attention to asset security, utilizing client-side validation mechanisms to ensure asset states. The ZK-Rollup route, due to its adoption of mature EVM solutions + modular security verification, currently possesses strong composability and cross-chain expansion capabilities, adapting more quickly to scenarios like DeFi and AI Agents. BitVM further pursues extreme native compatibility, achieving smart contract capabilities on-chain without altering BTC consensus, representing an extreme attempt at BTC's computational capabilities, despite still being in its early stages.

Although the outcome is not yet determined, we can see that truly sustainable solutions must strive to meet three points: BTC native compatibility, verifiable security, and good support capabilities for upper-layer applications. Moreover, the trend of integration within the current technology stack is becoming increasingly evident, such as the combination of the Lightning Network with stablecoins and the exploratory integration of ZK Rollup with RGB.

In the future, BTC L2 will certainly be a multi-polar competitive landscape, with different solutions serving different core scenarios: payment, contracts, assets, storage, AI, etc., collaborating to support the long-term prosperity of the BTC ecosystem. This competition is far from over, and the true winners will be determined by asset accumulation capabilities and developer ecosystems. As the world's strongest consensus asset, BTC's ecological boundaries will continue to expand due to the influx of dollar stablecoins and L2 modular innovations, ushering in a dual upgrade of "payment sovereignty + contract expansion."

Recently, with the implementation of the U.S. GENIUS stablecoin bill, it marks a gradual clarification and improvement of global stablecoin regulation. "Payment stablecoins" have been legally incorporated into the dollar system, which is expected to accelerate the entry of USDT, USDC, and other emerging stablecoins into on-chain payment scenarios. As Tether's CEO pointed out, emerging markets are the main battleground for stablecoin implementation, with 60% of USDT's growth coming from actual payment demands outside the crypto circle.

The GENIUS bill provides a clear legal path for the on-chain use of stablecoins and opens a compliance channel for BTC L2 to carry dollar assets. USDT, as the first stablecoin born on the BTC network, is now leading the way back into the BTC ecosystem, which not only represents a return to the technological route but also reflects BTC's strategic value as a settlement layer. It is foreseeable that if a stablecoin payment system is built on BTC L2 in the future, it will be the most native, safest, and most in line with the spirit of Bitcoin. Leveraging the composability and asset protocol capabilities of BTC L2, the BTC network is expected to accommodate the payment settlement needs of the real world, achieving a symbiotic pattern of stablecoin circulation and value accumulation.