Back in 2023 ordinals were booming and the community was talking about Bitcoin scaling and Bitcoin-native staking. Charlie Hu and Kevin He considered this as the perfect moment to start building to help solve Bitcoin’s congestion issues and create a more programmable, trust-minimized layer for Bitcoin DeFi.
First proposed two years ago, the BitVM paradigm aims to enable off-chain computation verification on Bitcoin without requiring a fork, paving the potential to power next-generation applications like BTC bridges and Bitcoin rollups.
Despite multiple teams building on BitVM, Bitlayer distinguishes itself as a first mover in this rapidly intensifying space.
In July 2025, Bitlayer debuted the trust-minimized BTC bridging solution BitVM Bridge Mainnet, marking the first functional implementation of BitVM.
As the BitVM Bridge and YBTC expand integration across multichain with rapid Total Value Locked (TVL) growth, Bitlayer is emerging as a novel solution for both crypto traders and institutions, delivering Bitcoin-grade security and deep liquidity.
Why YBTC Represents a Leap Forward
Bitcoin reigns as the world’s largest digital asset, yet for its holders, it has remained financially inefficient without achieving robust security, yield-generating, and high liquidity.
YBTC is the perfect vehicle for Bitcoin holders first and foremost because of its high level security. As a representative Bitcoin asset created by Bitlayer, a leading Bitcoin infrastructure project, the value of YBTC is strictly pegged 1:1 with native BTC. Each YBTC in circulation is backed by one real BTC securely locked in the BitVM Bridge, preserving YBTC’s value and eliminating de-peg risk from Bitcoin.
What truly sets YBTC apart is its underlying architecture. Unlike older wrapped BTC models that rely on a group of people, aka multisig custodians to ensure the locked funds, YBTC leverages a cryptographically secure, trust-minimized mechanism:
- Minting YBTC: Users can only generate YBTC through the official BitVM Bridge. The process locks 1 BTC in a smart contract for every 1 YBTC minted, governed entirely by code, not a committee.
- Withdrawing BTC: To reclaim their original BTC, users must submit a cryptographic proof to the BitVM smart contract. The withdrawal only proceeds after the on-chain verification, guaranteeing the whole systemic integrity.
This makes YBTC a third-generation BTC representation, secured not by social trust, but by mathematical certainty of the BitVM technology.
Expanding Reach and Liquidity
Beyond its trust-minimized security architecture, YBTC is designed to unlock the full potential of Bitcoin within the rapidly expanding Bitcoin DeFi landscape.
As a yield-bearing asset by nature, YBTC enables Bitcoin holders to participate seamlessly in decentralized finance. By minting YBTC, users can stake, lend, or provide liquidity across a wide range of DeFi protocols—transforming static Bitcoin into a powerful source of passive income.
Driven by YBTC, a new wave of BTCFi financial products is rapidly expanding, enhancing both ecosystem reach and liquidity.
In March 2025, Bitlayer secured strategic integrations with five major chains – Base, Starknet, Arbitrum, Sonic SVM, and Plume Network – amplifying Bitcoin liquidity across these thriving ecosystems. Soon after, the BitVM Bridge expanded to Cardano (the 10th-largest blockchain by market cap), bringing secure, trust-minimized Bitcoin liquidity to its community.
This was followed by a partnership with Sui and Solana to deploy the BitVM Bridge and introduce YBTC, enabling seamless and secure Bitcoin conversions for DeFi applications.
To overcome the critical Non-Standard Transaction (NST) hurdles blocking BitVM Bridge launch, Bitlayer secured strategic partnerships with major Bitcoin mining pools Antpool, F2Pool, and SpiderPool. These collaborations ensured the robust and secure rollout of the BitVM Bridge.
With the BitVM Bridge mainnet launch imminent, the YBTC ecosystem stands at the threshold of the BTCFi era: a trust-minimized paradigm poised to unlock Bitcoin’s liquidity across multichain networks at unprecedented scale.
Currently, YBTC.B, one of the assets of the YBTC family, is live on multiple EVM-compatible blockchain networks including Ethereum, BSC, Avalanche, and Plume Network via CCIP. In line with the continuous growth of its ecosystem, Bitlayer also plans to extend support to additional chains in the near future, allowing users to explore and engage YBTC.B-based products and tap into novel Bitcoin-based yield opportunities.
Key metrics to date:
- TVL: $360M+
- Deposited BTC: 3,000+
- Daily Trading Volume: $3M+
- Total Rewards Distributed: $3M+
Institutional validation and capital infusion position Bitlayer for accelerated market expansion. Backed by $30 million in cumulative funding over the past two years, Bitlayer has garnered significant institutional trust, cementing its role as a leading infrastructure project poised to accelerate Bitcoin’s integration into global finance.
As the BTCFi narrative continues to unfold, Bitlayer is positioned as the emerging epicenter for Bitcoin liquidity, building the most credible foundation for Bitcoin’s “Season 2” evolution.
This content is sponsored and does not serve as an endorsement by Blockworks. The veracity of this content has not been verified and should not serve as financial advice. We encourage readers to conduct their own research before making financial decisions.
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