I heard a lot of people say that no one could define an L2 in bitcoin Asia. The problem is that we have a definition and most people just want to ignore it. Marketing, huh.
“bitcoin L2” are the most popular thing on the street. People are using a lot of jargon to distract users from trustworthy assumptions and mislead bitcoin Season 2.
Why so much sudden energy? See, about a year ago some teams figured out how to use bitcoin as a data availability layer for rollups. Others have been working to improve trust assumptions related to bridging (also known as two-way bonding). Research has made great strides and many projects believe we will have rollup blockchains in production by 2025.
2025? Are some projects claiming to be on mainnet now?
Teams have harnessed this energy and are prematurely promoting the modular thesis for bitcoin scaling. Projects with bridge contracts are being launched on non-bitcoin blockchains and traded as bitcoin L2. Infrastructure providers amplify their message and boast that bitcoin is back.
But these solutions do not scale bitcoin. They are centralized and completely independent side chains.
Layers they say? More like layers of trusted assumptions.
Definitions
Many of these projects try to adopt the modular thesis for bitcoin scaling. Basically, this means that each aspect of the transaction lifecycle can be its own specialized system. Execution, transaction order, and data availability can be operated by independent actors. bitcoin will be the settlement layer at the base of everything.
It's not a terrible thesis when you dive into it. But its current implementation in bitcoin is a bit broken.
Many of the new projects claim to be “summary.” Rollups would use bitcoin for data availability and publish their latest state root and enough transactions to recalculate the state of the blockchain from its genesis to bitcoin. If they want to expand the performance of bitcoin transactions, they will also have a minimized trustbridge contract where users can deposit funds to mint in the rollup.
Dive into some documentation sites and you'll see that none of these new projects (in production) use bitcoin for data availability. They want to use an alternative DA solution for performance reasons. That is, they want to be “validiums” or “optimiums”.
These constructions are similar to rollups. They are blockchains that similarly have a bridge contract with the parent chain, but use a different system for DA. This improves performance and reduces costs, but comes with some security disadvantages.
In the validium design, the L1 contract would be responsible for verifying the validity proof associated with a specific state transition for settlement. After completing a specific state transition, the validium bridge contract can process withdrawals for users who wish to exit the chain, including unilateral exits that users can submit themselves if state data is available. Optimiums are similar, but rely on a fraud-proof mechanism rather than validity proofs.
But none of the production implementations use a mechanism, in bitcoin, that supports SNARK verification or fraud testing…
Everything is verified on a completely different Layer 1 or your own permissioned sidechain network!
Most of these chains fork an ethereum L2 SDK. They're either going with ethereum or some fully centralized geth fork they created.
So there is no relationship with bitcoin. Maybe you go with ethereum, use the most popular DA layer, and have an amazing execution layer.
But it is not bitcoin.
So side chains?
All new bitcoin L2 are just modular sidechains. And when I say “modular sidechain”, I mean that they run an alternative blockchain off of their main blockchain for performance reasons. They also make security compromises by using an alternative DA layer to improve performance.
Your bridge with bitcoin? Led by multiple firms.
So, the general trust assumptions that users assume are:
- I hope the bitcoin bridge multi-signature operation doesn't bother you
- I expect the centralized sequencer to include and execute your transactions.
- Rely on alternative DA layer to ensure data is easily available
- I expect the centralized tester to publish state transitions to the L1 contract OR I expect the centralized challengers to challenge the malicious state transitions
- Trust the sidechain main chain to validate state transitions (finality)
- Trust an administrator key to not update the chain and steal user funds
Using a modular bitcoin sidechain is fine if users know they are relying on a completely centralized chain and bridging program to use their btc. A couple of projects are completely honest about this approach and I've said publicly that I'm not completely against it from a marketing perspective.
The problem is that most teams abstract away the security details and try to make it look like their designs are remotely similar to modular builds on ethereum or other ecosystems.
Not all hope is gone
You may read this post and think the whole situation has gone to hell and isn't worth exploring. Some days it may seem that way, but there is a lot of research and development going on around improved sidechain designs.
Equipment like x.com/citrea_xyz”>Citrea and x.com/AlpenLabs”>Alpen Laboratories They are looking to develop rollups on top of bitcoin. There is great work being done from the BitVM community and the x.com/ZeroSync_”>zero synchronization team to improve bidirectional pin designs and develop a SNARK verifier that works today. This work is also inspiring a number of bridge proposals from various cumulative and sidechain projects.
You cannot rule out the good along with the bad in these situations. It's not completely useless. But all the nonsense we see in other ecosystems around complicated scaling proposals, token incentives, and “progressive decentralization” roadmaps?
That is multiplied by a hundred in bitcoin.
So yes. These new strings are not L2.
