In the evolving world of blockchain, the conversation around Bitcoin’s scalability and utility is gaining momentum. Unlike Ethereum, which has seen extensive Layer 2 development focused on enhancing user experience, Bitcoin’s Layer 2 solutions must tackle foundational challenges—particularly around security and trust.
We sat down with Kevin Liu, a builder with deep roots in both Ethereum and Bitcoin ecosystems, to explore the technological and strategic innovations shaping Bitcoin’s second-layer future. Kevin is a co-founder of Metis, an Ethereum Layer 2, and more recently, a co-founder of GOAT Network, a Bitcoin Layer 2 solution designed to bring scalability without compromising Bitcoin’s core security.
Why Move from Ethereum to Bitcoin?
Kevin’s transition wasn’t just a change of focus—it was driven by both technological curiosity and clear market needs. While Ethereum’s Layer 2 landscape is crowded with solutions improving transaction speed and cost, Bitcoin presents a different kind of challenge and opportunity.
Bitcoin’ colossal market cap and widespread adoption come with a trade-off: limited programmability and on-chain scalability. This is where innovative technologies like zkVM (Zero-Knowledge Virtual Machine) come into play. zkVM allows off-chain computation to be verified trustlessly on the Bitcoin blockchain, maintaining its legendary security while enabling new use cases.
The Core Challenge: Security First
Ethereum Layer 2 solutions inherit security from the underlying Ethereum chain. Bitcoin Layer 2s, however, must build security and trust from the ground up. This means creating new economic models and cryptographic mechanisms that align with Bitcoin’s decentralized and conservative ethos.
For Kevin and the GOAT Network team, the primary goal was clear: enable Bitcoin holders to participate in a growing ecosystem of applications without ever sacrificing custody of their BTC or trusting third parties.
Introducing a Decentralized Sequencer Network
One of GOAT Network’s key innovations is its decentralized sequencer architecture. Unlike centralized rollups that rely on a single operator, GOAT allows users to run nodes by staking BTC. In return, they receive yBTC—a yield-bearing representation of their staked Bitcoin.
Node operators earn BTC-denominated transaction fees and share revenue with stakers, creating a sustainable and native yield mechanism for Bitcoin. This approach addresses a major demand among long-term BTC holders: generating returns without selling their assets.
👉 Explore advanced staking mechanisms
Expanding the Bitcoin Utility Horizon
With a secure and scalable Layer 2 in place, entirely new financial applications become possible:
- Lending and Borrowing: Users can borrow against their BTC without liquidating their holdings.
- Stablecoin Minting: Generate dollar-pegged assets using Bitcoin as collateral.
- Structured Products: Create yield-bearing instruments based on yBTC with varying risk and return profiles.
- Institutional Offerings: With the rise of Bitcoin ETFs, institutions are looking for compliant and secure ways to earn yield on BTC holdings—something only a truly Bitcoin-native Layer 2 can provide.
The Role of zkVM and BitVM2
Two technologies form the backbone of GOAT’s approach:
- zkVM: A virtual machine that generates cryptographic proofs of off-chain computation. This allows the network to verify transactions without executing them on-chain, drastically improving scalability.
- BitVM2: A complementary technology that enables the Bitcoin network to verify zero-knowledge proofs submitted by zkVM. This completes the trust loop, ensuring that Layer 2 activity is honest and accurate.
Together, these technologies allow Bitcoin to act as a robust settlement layer, while Layer 2 handles complex computations and high-throughput transactions.
Why Integrate with Dogecoin?
GOAT Network is also integrating support for DOGE—a decision rooted in strategic alignment. Dogecoin shares many attributes with Bitcoin: decentralization, longevity, high market cap, and a passionate community. By incorporating DOGE, GOAT can attract more users, increase transaction volume, and strengthen network effects.
The Road Ahead
Kevin believes Bitcoin Layer 2 is at an inflection point—similar to where Ethereum was when early rollups were still experimental. Current challenges, such as the economic model behind BitVM2’s withdrawal mechanism, are solvable. Once addressed, the ecosystem is poised for rapid growth.
He encourages developers and builders to focus on user needs rather than pure technology. Bitcoin doesn’t need to become Ethereum—it needs to become a more powerful version of itself, with Layer 2 solutions enabling new forms of utility while preserving its foundational values.
Frequently Asked Questions
What is a Bitcoin Layer 2?
A Bitcoin Layer 2 is a secondary protocol built on top of the Bitcoin blockchain to improve its scalability and functionality. It allows faster and cheaper transactions while relying on Bitcoin’s base layer for ultimate security.
How does staking work on GOAT Network?
Users can stake BTC to become node operators or participate in network consensus. In return, they receive yBTC, which represents their staked amount and accumulated rewards. Node operators earn transaction fees in BTC.
What is yBTC?
yBTC is a yield-bearing token issued to users who stake BTC on GOAT Network. It serves as both a proof of stake and a reward-bearing asset that can be used in other DeFi applications.
Is Bitcoin Layer 2 secure?
Bitcoin Layer 2 solutions must implement their own security mechanisms. GOAT Network uses zkVM and BitVM2 to ensure all off-chain activity is verifiable on the Bitcoin mainnet, inheriting its security guarantees.
Can DOGE be used in GOAT Network?
Yes, GOAT Network supports Dogecoin for staking, transactions, and fee payment. This is part of a strategy to increase utility and adoption across multiple cryptocurrency communities.
What kinds of apps can be built on Bitcoin Layer 2?
Expect to see decentralized exchanges, lending platforms, prediction markets, stablecoin systems, and structured financial products—all without users having to give up custody of their Bitcoin.
Building for Bitcoin requires a deep respect for its principles—decentralization, security, and simplicity. With Layer 2 technologies like those pioneered by GOAT Network, we are entering a new era of Bitcoin utility, where holders can finally participate in a vibrant economy without compromising on what made Bitcoin great in the first place.