AInvest Newsletter
Daily stocks & crypto headlines, free to your inbox
Bitcoin News Today: Bitlayer Launches BitVM Bridge Boosting Bitcoin Interoperability
Coin WorldWednesday, Jul 16, 2025 10:20 am ET
1min read
Aime SummaryBitlayer, a Bitcoin decentralized finance (DeFi) infrastructure startup backed by Franklin Templeton, has launched its smart contract bridge on mainnet. The bridge, called BitVM, is designed to enhance Bitcoin's interoperability across multiple blockchain networks. BitVM allows users to deposit Bitcoin (BTC) into a smart contract, where it is held in escrow and converted into Peg-BTC (YBTC), a tokenized version of Bitcoin that can interact with smart contract platforms. This innovation aims to make native BTC liquidity accessible on networks that support smart contracts and more complex applications, without requiring changes to Bitcoin’s base layer.
Bitlayer has already secured partnerships to integrate the bridge with networks including Sui, Base, and Arbitrum. The company describes Peg-BTC as a solution that facilitates programmability and crosschain compatibility. Security has been a significant concern for crosschain bridges, which are often targeted by hackers due to exploitable vulnerabilities. In 2022, a hacker stole $321 million from a Wormhole bridge, though over $225 million was later recouped. Bitlayer's bridge was built on previous models’ trust assumptions to beef up security. Whereas many bridges rely on a multisig trust model, BitVM uses a single signer, which is intended to enhance security.
While other blockchains such as Ethereum and Solana are more known for decentralized finance, the world’s oldest public blockchain has been attracting more DeFi protocols lately. For many Bitcoin investors, the tantalizing possibility of earning yield on their coins has whetted an appetite for these services. Bitlayer’s competitors in the Bitcoin DeFi space include BabylonChain, a proof-of-stake protocol that allows for investors to stake Bitcoin, Stacks, which rewards Bitcoin miners and BounceBit, which is a restaking protocol wherein users can delegate wrapped BTC to node operators.
As of Tuesday, the Bitlayer protocol has $384 million in value locked onchain, generating $1.7 million in fees in June. The Babylon Protocol has a much greater TVL, with $5.2 billion locked on the network. There are currently about 30 DeFi projects building within the Bitcoin ecosystem, a trend accelerated by two major developments: the Taproot upgrade and the introduction of Inscriptions. Taproot, implemented in November 2021, enhanced Bitcoin’s scripting capabilities, paving the way for more scalable and privacy-focused applications. Inscriptions, popularized with the launch of the Ordinals protocol in early 2023, allowed users to embed arbitrary data, including images and code, directly onto the BTC network, unlocking new use cases for Bitcoin.
Ask Aime: How does Bitlayer's smart contract bridge enhance Bitcoin's interoperability across blockchain networks, and what are the security implications of using such bridges?
Disclaimer: The news articles available on this platform are generated in whole or in part by artificial intelligence and may not have been reviewed or fact checked by human editors. While we make reasonable efforts to ensure the quality and accuracy of the content, we make no representations or warranties, express or implied, as to the truthfulness, reliability, completeness, or timeliness of any information provided. It is your sole responsibility to independently verify any facts, statements, or claims prior to acting upon them. Ainvest Fintech Inc expressly disclaims all liability for any loss, damage, or harm arising from the use of or reliance on AI-generated content, including but not limited to direct, indirect, incidental, or consequential damages.
Comments
No comments yet