Chainfeeds Introduction:
Momir, senior director of IOSG Ventures, wrote an article starting with a simplified model to explore three key design decisions of Bitcoin Layer 2 solutions: How to bridge BTC? How and to what extent to inherit Bitcoin security? How to deal with the data availability (DA) problem?
Article Source:
https://x.com/momir_amidzic/status/1791649749671776413
Article author:
Momir
View:
Momir: 1) Bridging BTC: - BitVM bridge: A trust-minimized bridge with a 1/N trust assumption would be the best solution, but there is still no concrete bridge specification and there are some open (hopefully solvable) issues, such as requiring multi-signature operators to provide front-end liquidity. The current optimistic prediction is that we may see a BitVM bridge in at least 12 months and a base case in 24 months. - Decentralized bridge: Economically secure bridges (such as XCLAIM) are generally secure, but not very scalable. In contrast, statistically secure bridges, such as large networks of rotating multi-signatures, currently seem to offer a better trade-off. - Centralized bridge: Although not ideal, it is a simple solution, and many Bitcoin sidechains currently rely on simple custodial bridges. 2) Inheriting Bitcoin's security: - BitVM program: In theory, a BitVM program can be written to encode rules for tokens that only exist on the sidechain and are not native to Bitcoin. This would not only allow a trust-minimized bridge to be built with BitVM, but also allow actual rollups on Bitcoin. However, the technical risks cannot be ignored, and a practical solution seems to be a long way off. - PoS sidechains using Babylon: Projects can build PoS sidechains using Babylon. Babylon is the first solution to enable trustless Bitcoin staking, increasing the utility of BTC by leveraging BTC as an economic security layer in new PoS chains, just as Eigen can use ETH as an economic security layer for new middleware and infrastructure. - Merged mining: There are some inherent limitations to regular merged mining, such as the inability to enforce certain behaviors on miners. Building some hybrid mechanism that requires miners to stake on the sidechain to get more of a stake in the game while giving the sidechain the ability to slash miners could be an interesting area of research. 3) Data Availability (DA): DA has been a topic of widespread debate in the Ethereum community, with some community members insisting that anything that uses an external DA is not a true Ethereum rollup. However, Bitcoin sidechains will likely have to compromise on this and be more pragmatic, with alternatives including Ethereum DA, Celestia, Eigen DA, DA secured by staked BTC (via Babylon), etc. Last point: What works best for Bitcoin L1 (regarding the choice of settlement layer)? In the long run, as less BTC is available for mining, miners will have to rely more on organic fees or secondary sources of income. In other words, in order to maintain a high hashrate, Bitcoin must develop a sustainable fee market. Looking at the above alternatives, the solution that will have the most positive impact on Bitcoin's L1 security is merged mining. Merged mining is very consistent with improving Bitcoin's security because it requires miners to compete for L1 block execution in order to build sidechain blocks and receive rewards. In other words, winning the next Bitcoin block is a prerequisite for building the next block in the sidechain. My personal favorite combination that may be possible in the next two years is: - Bridging through BitVM - Using Babylon to obtain BTC PoS security, or using some innovative merged mining methods to extend Bitcoin PoW security - Relying on an external DA, such as Ethereum or Babylon-powered DA. 【Original text in English】
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