Known smart contract mechanisms, business models, best practices and architecture… on Bitcoin!

Since Bitcoin’s inception in 2009 things have changed A LOT. 

Bitcoin was the first to introduce the world to a concept of a secure, peer-to-peer payment system. As the ecosystem expanded, users bumped with the limitations of Bitcoin’s scalability and functionality. This led to the creation of Ethereum and its Virtual Machine (EVM), automating trustless business processes via smart contracts. 

What is a EVM-ization?

The term "EVM-ization" refers to the integration of EVM capabilities into non-Ethereum blockchains, such as Bitcoin! Allowing for the creation of dApps and DeFi protocols - with Bitcoin settlement.

EVM-ization also helps interoperability between blockchain networks, an aspect which can bring Bitcoin and Ethereum maxis together. It enables assets and information to flow seamlessly across different blockchains.

Such a hybrid ecosystem has the potential to be a ‘best of both worlds’ scenario.. if it is carefully designed and battle tested. Many argue against using Bitcoin for transaction settlement due to its impact on the environment, although it currently uses the same amount of electricity as Christmas lights worldwide. 

Others argue that this debate is mostly political, while Bitcoin can actually speed up the mass adoption of renewable energy.

This feud is far from being settled. Regardless, products appear quickly and it’s all in users’ hands to decide how far they manage to go.

Notable L2s on Bitcoin

Many Bitcoin L2’s making an appearance recently, as seen on L2watch:

Let’s look at some notable EVM chains settling on Bitcoin:

Merlin Chain

Token: $MERL

Merlin TVL: $1.17B

Merlin Chain is a Bitcoin Layer 2 that integrates the ZK-Rollup network, decentralized oracles, Data Availability, and on-chain BTC fraud proofing. The on-chain character, plus fraud proofing utilizes Bitcoin's powerful consensus mechanism to cater for the security of Merlin.

The decentralized oracle nodes have the most important tasks - compiling the transaction data collected and processed in batches by the sequencer node, uploading to Bitcoin mainnet, batch signature generation and more. Merlin supports BTC L1 Assets and uses both the Bridge Indexer and Bridge Relayer to confirm the transactions are done.

Build on Bitcoin (BOB)

BOB TVL: $308.2M

Build on Bitcoin is another chain aiming to combine the security of Bitcoin with the versatility of Ethereum with the help of rollups. It went live recently with $300M TVL and 40 projects already onboarded! Build on Bitcoin utilizes the Optimism OP stack.

BOB starts off with Ethereum L1 settlement, with plans to include Bitcoin PoW security and later on move to settle entirely on Bitcoin, via ETH L1/L2 bridge and BTC fraud-proof handling. It welcomes efforts by OP to offset centralzied sequencer risks and involve Bitcoin miners in the verification of sequencer work. BOB ‘inherits security from miners, offsets the reliance on centralized sequencers, and retains fast block times’.

Rootstock

Token: $RIF

Rootstock TVL: $197.49M

Rootstock came about back in 2017. Smart contracts on Rootstock are compatible with Ethereum. The Rootstock Infrastructure Framework (RIF) offers a suite of tools needed to create on Rootstock, including storage, naming systems and payments to simplify the process.

This infra is built on the Rootstock blockchain (RSK): 

• RIF Relay - for gas payments

• RIF Flyover - for BTC transfers

• RIF Wallet

• RIF DeFi Gateways 

$RIF is a utility token facilitating access to these tools, while Rootstock has also issued a $2.5M grant to incentivize builders.

Botanix

Botanix TVL: $190.62M

Also known as ‘The Spider Chain’, Botanix is different because of their unique address generation. Botanix prompts you to connect your wallet, and then issues your unique Botanix address which is connected to your EVM address. You can send BTC to this address and it will appear in your Metamask.

It aims to have a more seamless experience, attracting both Bitcoin natives and Ethereum L2 users. Not trying to compete for more and faster transactions - they have a similar vision to Ethereum, making sure any application that reached market fit on Ethereum to also do so on Bitcoin.

EVM-ization and Blockchain Security for Devs and End-users

There are always challenges. Some of them are the maintenance of high security standards of the Bitcoin network, and the effective handling of different consensus mechanisms and block times between the two blockchains.

For security firms such as Audita, this comes as another opportunity to secure the sophisticated mechanisms behind the mass adoption of crypto. Our experts help this process by continuous security research. Audit firms are the best at finding, measuring and extracting potential threats to brave feats such as the EVM-ization of Bitcoin.

For developers, it means creating applications leveraging the best of both Bitcoin and Ethereum, while striving to do it reasonably.

For end users, it provides access to a broader range of products, from DeFi platforms to NFT marketplaces, more choice and an opportunity to declare and claim personal preferences.

Conclusion

EVM-ization of Bitcoin via L2s represents a significant milestone - bridging the gap between the two main chains.

Don’t forget! Combining the benefits of both alpha chains also combines the risks present, and likely creates opportunities for new, creative exploits. Be assured our team at Audita, as well as all of web3 security is watching closely and doing persistent research to pave the way to safety.

Need help scouting vulnerabilities? Book an audit with our experts!

Stay SAFU

Audita’s Team