What are the core crypto narratives in 2024? BTC Layer2 concept must be in the top three.
Recently, the representative project Zulu Network has not only realized ZKP verification, but also frequently cooperated and interacted with leading projects in the field such as BunceBit and Orbiter. Its first game Lucky Spin on the Zulu Beta test network has also been launched.
What Alpha opportunities are there in the BTC Layer2 track? How can Zulu Network participate? In this regard, Followin conducted an in-depth interview with Eric Lifson (@EricLifson), co-founder of Zulu Network and serial entrepreneur of Web3. The 13 questions comprehensively present the current status and opportunities of the BTC ecosystem and Zulu Network.
Here are some great insights from Eric Lifson:
1. Bitcoin will not only be a tool for storing value, but also the foundation of a new financial system.
2. The most urgent challenges that BTC Layer2 projects need to address are: scalability, interoperability, security, decentralization, education, and awareness.
3. Zulu Network is not just building a protocol, we are cultivating an ecosystem.
4. In the Bitcoin ecosystem, the balance of technology, users, and assets is crucial. If we have to rank them, they are users, technology, and TVL.
5. RWA on Bitcoin is a promising field, such as leveraging the security and liquidity of Bitcoin to tokenize securities, real estate, commodities and other traditional assets.
6. The recent market decline is part of the cyclical nature of the crypto industry. We have seen it before and will see it again in the future. We focus on building long-term value rather than reacting to short-term market fluctuations.
7. Please share some good projects in your mind: We cooperate with many leading projects, such as Orbiter, Owlto, Portal, Babylon, BounceBit...
The following is the full text of the conversation, edited and abridged by Followin.
1. Followin: Please share your personal experience and the business you are responsible for in Zulu
Eric Lifson:
I co-founded the venture capital studio Splinter Node Capital with my partners and successfully brought several projects to market. Back in 2017, I co-founded the blockchain communication platform Skrumble Network. In addition, I served as a Web3 and gaming industry advisor at Alibaba Innovation Accelerator, which gave me a broader perspective on emerging trends and technologies in the field.
Essentially, my extensive experience in both traditional internet businesses and blockchain projects enabled us to take a holistic approach to building Zulu Network.
At Zulu Network, we are building a revolutionary Bitcoin Layer 2 solution, with a unique two-layer architecture that combines EVM compatibility and Bitcoin-native innovation to unlock the full potential of the Bitcoin ecosystem.
But Zulu Network is not just building technology, we are creating an ecosystem that requires a deep understanding of user needs and market dynamics to achieve sustainable growth and adoption. In the Web3 space, success is not just about technology - it's also about building communities, establishing partnerships, and creating value for users.
2. Followin: What attracted you to start a business in the Web3 industry?
Eric Lifson:
What attracts me most about the Web3 industry is its transformative potential. The idea of creating a more transparent, secure, and user-centric system resonates strongly with me. In addition, the innovative spirit and development speed in the Web3 field are very consistent with my entrepreneurial thinking.
This ultimately led me to found Zulu Network, the Bitcoin ZK protocol. Web3 is an industry that requires constant learning and adaptation, which always keeps things interesting and exciting.
3. Followin: Having started a business in the Web3 industry for many years, what has been the biggest change in the Web3 industry in the past two years? In what aspects has the industry's development not met your expectations?
Eric Lifson:
First, I see significant progress in Layer 2 technology, which greatly increases transaction speeds and reduces costs on the Ethereum network, which opens up new possibilities for decentralized applications and services.
Second, non-fungible tokens (NFTs) have gained mainstream attention, revolutionizing the art, gaming, and collectibles industries. Moreover, they are beginning to impact the Bitcoin ecosystem.
Finally, there has been a marked increase in institutional interest and investment in this area, which practitioners will feel firsthand.
However, a few key areas differ from what I expected:
•User Experience: The user experience of many Web3 applications remains complex and unintuitive for mainstream users.
•Interoperability: The level of interoperability between different blockchain networks and protocols has not developed as rapidly as I expected. This remains a significant barrier to creating a truly interconnected Web3 ecosystem.
• Sustainable scaling solutions: While Layer 2 solutions improve scalability, we still need to explore long-term scaling solutions that can be applied on a large scale without compromising decentralization or security.
•Real-world adoption: There remains a gap between the technology’s potential and its actual widespread use.
However, these challenges present opportunities for innovation and improvement. At Zulu Network, we are focused on solving these problems and driving the Web3 industry towards greater maturity and mass adoption.
4. Followin: What do you think about the development of BTC Layer2 in the past two years?
Eric Lifson:
Bitcoin Layer 2 solutions have been a major focus in 2023-2024 as there is a growing recognition that scaling solutions are critical to Bitcoin's long-term viability and adoption. However, when community expectations outpace actual developments, frustration can arise.
Why is the BTC ecosystem like this?
First, the Bitcoin community is notoriously conservative when it comes to changes that could affect the security of the network.
Second, many layer 2 solutions bring additional complexity to the Bitcoin ecosystem, which can be a double-edged sword. Some layer 2 solutions require trusting a third party or introducing centralized elements, which goes against the core spirit of Bitcoin.
That being said, I believe Bitcoin Layer 2 solutions are critical to the future of the network. Projects like the Lightning Network, Stacks, and Rootstock are paving the way to expand Bitcoin’s utility beyond just a store of value. We are seeing more and more innovative approaches emerge, each with their own advantages and use cases.
At Zulu Network, we are committed to bringing advanced functionality to the Bitcoin ecosystem while maintaining Bitcoin's core principles of security and decentralization.
Photo: Eric Lifson attended the 2024 Bitcoin Conference held in Nashville, USA. The event attracted Musk, Trump and others to attend.
5. Followin: Please share with us some data and results of ZULU development so that people who don’t know about it can understand it clearly.
Eric Lifson:
First, we recently secured $3 million in seed funding, a significant vote of confidence from the capital markets in our vision and approach to advancing the Bitcoin ecosystem.
Secondly, we have a strong social media following, with over 700,000 users on the testnet, over 100,000 followers on X, 65,000 members on our Telegram channel, and 90,000 members on our Discord server.
Additionally, while we are still in the early stages of our journey, we have made substantial progress in developing our core protocol. We are creating a scalable and secure Bitcoin ZK protocol, we have established good partnerships within the Bitcoin ecosystem, and have held discussions with multiple projects that hope to use Zulu Network to implement DeFi, NFTs, bridges, and other innovative applications.
In terms of community development, we’ve also seen encouraging engagement on our social media channels and developer forums.
6. Followin: Do you think ZULU is facing any tough challenges? What is ZULU doing now?
Eric Lifson:
Of course there are challenges, such as the technical complexity of developing a secure and efficient ZK protocol on Bitcoin, the adoption barriers of convincing developers and users to build and use applications on our platform, navigating the changing regulatory environment, and competing in the growing competition in the Bitcoin innovation space.
For Zulu Network, I want to emphasize that we are not just building a protocol, we are fostering an ecosystem. By providing tools and support for developers, our goal is to create a thriving community of applications based on Zulu Network.
Currently, Zulu Network is focused on refining our core protocol, building partnerships within the Bitcoin ecosystem, expanding community engagement efforts, discussing potential applications with projects interested in leveraging our network, and recruiting top talent to strengthen our team.
7. Followin: The Web3 industry has been discussing which is more important: technology, users, and deposited assets (TVL). In the Bitcoin ecosystem, how do you view the importance of these three? What is the focus of Zulu?
Eric Lifson:
I think technology, users, and TVL are all important in the Bitcoin ecosystem, but I rank them as follows:
First, users. Second, technology. Bitcoin’s core value proposition is its robust, secure, and decentralized technology. If it’s not, you’re exposing your users to risk or just adding noise without bringing new benefits. Finally, TVL. If the first two are done well, TVL will follow naturally.
Of course, the balance of technology, users, and assets is critical. Zulu’s focus is on creating a seamless user experience while ensuring a strong technical foundation.
8. Followin: How can users currently participate in Zulu Network?
Eric Lifson:
There are several ways to get involved:
First, developers can build DeFi applications, NFTs, and even explore new use cases for Bitcoin on Zulu Network.
Secondly, interested users can join our user community, where we encourage users to participate in discussions and provide feedback. Early adopters will have the opportunity to test and use our various Bitcoin applications and features.
For those interested in getting involved, the best place to learn about community initiatives and developer programs is through announcements on our official channels.
9. Followin: In the BTC ecosystem, which roles are key? Can you share some high-quality projects worth paying attention to from the perspective of practitioners?
Eric Lifson:
Cross-chain bridges will play an important role. They are key to unlocking Bitcoin liquidity to serve the wider crypto ecosystem, and Zulu Network is at the center of this.
The importance of oracles cannot be overlooked either. Reliable data feeds are critical to many DeFi applications. They are the unsung heroes behind many dApps, DeFi protocols, and many other Web3 use cases.
Finally, there are DeFi applications. Considering Bitcoin's huge market value and user base, DeFi protocols on Bitcoin Layer 2 have huge potential. We may see lending and liquidity mining protocols become early winners. Users will expect to transform static Bitcoin into productive assets.
Many of our partners are building Bitcoin native solutions. This includes cross-chain bridge projects like Orbiter, Owlto, and Portal, as well as Bitcoin native staking with Babylon. Liquid restaking is a growing narrative in Bitcoin, and our partner BounceBit is a strong player in it.
The Bitcoin Layer 2 ecosystem is still in its early stages, and we will likely see many innovative projects emerge in the coming years.
10. Followin: Which type of projects is BTC Layer2 more suitable for?
Eric Lifson:
DeFi is undoubtedly the most promising field. NFT is also an interesting field.
I think implementing RWA on Bitcoin is a promising area. This could include tokenizing securities, real estate, commodities, and other traditional assets using the security and liquidity of Bitcoin. Some have suggested that the reason RWA has not exploded before is because the networks that have been attempted do not have the reliability or decentralization of Bitcoin.
Now, with Zulu Network bringing technical feasibility and connecting to the Bitcoin mainnet through BitVM and ZK proofs, now may be the time for RWA to find its true home on Bitcoin.
11. Followin: In early July, we saw the crypto industry go through a “tough time” with prices of crypto assets, including Bitcoin, plummeting. What do you think of the market’s impact on the industry?
Eric Lifson:
The recent market drop is part of the cyclical nature of the crypto industry. We have seen similar moves before and will likely see them again. At Zulu Network, we are focused on building long-term value rather than reacting to short-term market volatility. We are using this time to double down on some areas where we still see strong potential.
The first is community building. While speculators may leave when the market is down, long-term users remain and we are committed to making sure they know we won't abandon them. The second is about partnerships and ecosystem development. Downturns are a time to build.
I believe that challenging market conditions can also bring opportunities. As the noise in the market decreases, people are more focused on fundamentals and real value creation. This fits in well with Zulu Network's philosophy, where we are building innovative solutions to real problems in the Bitcoin ecosystem. Our vision of empowering the Bitcoin economy through smart contracts, dApps, and innovation has not changed. We believe that when market sentiment inevitably turns positive again, we will be in a good position.
12. Followin: Please share Zulu’s plans and your vision for the future of the industry.
Eric Lifson:
Our immediate plans for Zulu Network are to further develop and refine our unique two-layer architecture:
We are optimizing our EVM compatibility layer, ZuluPrime, to seamlessly integrate DeFi applications and smart contracts on Bitcoin. At the same time, we are promoting ZuluNexus, a UTXO-based layer, to explore new Bitcoin native features. We are also improving interoperability through powerful cross-chain bridges and expanding our development tools to make it easier to build on our network. Community growth remains a focus, and we will work hard on education and outreach.
Looking ahead, we believe that Bitcoin will become more than just a store of value, but will become the foundation of a new financial system. We will see the DeFi revolution on Bitcoin, increased institutional adoption, the integration of real assets, enhanced user experience through faster and cheaper transactions, and the emergence of innovative Bitcoin native applications.
At Zulu Network, we are committed to being leaders in this evolution and staying at the forefront of this revolution.
13. Followin: You have successful experience in the Web3 field. What advice do you have for entrepreneurs and investors who want to succeed?
Eric Lifson:
The advice I would give is to focus on solving real problems, don't just chase trends, and don't be fooled by short-term hype cycles. Build for the long term and focus on creating sustainable value. Of course, it is also important to be adaptable while building solutions. The Web3 space is developing rapidly, and be prepared to adjust and adapt your strategy as the market and technical environment changes.
Also, prioritize user experience. Many Web3 projects have difficulty in adoption due to complex interfaces. Focus on making your product as user-friendly as possible and bridge the gap between Web2 and Web3.
Building a strong community will also help a lot. Community is crucial. Engage with users, listen to their feedback, and build a loyal fan base. This will not only help with product adoption but also provide valuable insights for product development.
Don’t forget to invest in security and continue to invest in rigorous audits and ongoing security measures.
Finally, I would say keep your original intention for Web3 and stick to the principles of Web3. Remember the core values of decentralization, transparency, and user empowerment, which should guide your decision-making.
The crypto industry is an open and collaborative industry, no project exists in isolation, look for strategic partnerships that can help you grow and provide more value to users. This will also help you diversify your skills and knowledge to understand not only technology, but also economics, game theory, and community dynamics.
Remember, in Web3, success often comes from a combination of innovation, persistence, and community building. At Zulu Network, we are applying these principles in our efforts to revolutionize Bitcoin Layer 2.
