Bitlayer, a Bitcoin DeFi infrastructure firm backed by investment giant Franklin Templeton, has officially launched its trust-minimized Bitcoin bridge on mainnet. This significant development is expected to enhance Bitcoin’s interoperability and expand its role in decentralized finance across multiple blockchains.
What Is Bitlayer’s Bitcoin Bridge?
The newly released bridge, dubbed BitVM, allows users to deposit native BTC into a smart contract, which then issues Peg-BTC (YBTC) — a tokenized version of Bitcoin. This wrapped asset can interact with smart contract-compatible blockchains, including Arbitrum, Base, and Sui, unlocking yield opportunities without altering Bitcoin’s base protocol.
According to a company spokesperson, Bitlayer’s mission is to “bring Bitcoin liquidity to programmable ecosystems” while maintaining decentralization and minimizing trust assumptions.
How Bitlayer’s Bridge Differs from Traditional Crosschain Bridges
Unlike conventional bridges that often rely on multisig setups, BitVM employs a single-signer design. Bitlayer claims this architecture, combined with custom trust-minimized protocols, reduces potential attack vectors, addressing a common vulnerability in DeFi infrastructure.
Security remains a hot topic in the industry, especially after incidents like the $321 million Wormhole hack in 2022. Bitlayer’s team emphasizes that they’ve integrated lessons from previous exploits into their bridge design to protect users and maintain operational integrity.
Bitcoin DeFi Ecosystem Gains Traction Post-Taproot and Ordinals
With Taproot enabling more advanced scripting functions and Ordinals Inscriptions opening the door to onchain data embedding, Bitcoin’s ecosystem is evolving beyond “digital gold.” There are now over 30 active DeFi projects building on Bitcoin, according to industry trackers.
Bitlayer enters a space already being explored by protocols like:
- BabylonChain – enabling BTC staking through PoS validation
- Stacks – rewarding miners through BTC-linked mechanisms
- BounceBit – offering BTC restaking opportunities
Despite facing stiff competition, Bitlayer has already amassed $384 million in total value locked (TVL) and generated $1.7 million in protocol fees in June, signaling strong early adoption. In comparison, BabylonChain leads the field with over $5.2 billion in TVL.
Conclusion: A Major Step for Bitcoin Utility
With Bitlayer’s bridge live, the Bitcoin DeFi movement gains a critical new tool for scaling liquidity across chains. If adoption continues, Bitcoin may soon rival Ethereum not just as a store of value, but as a core engine for decentralized finance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.