Disclaimer: Nansen has produced the following report in collaboration with Slice Analytics as part of its existing contract for services provided to Bitlayer (the "Customer") at the time of publication. While Bitlayer has the right to review and provide feedback to Nansen, Nansen maintains full editorial control over the publication of this report. All views expressed are the independent opinions of Nansen's research analyst(s) who are the author(s) named in this report. This report is intended for informational purposes only and does not serve as investment, financial, professional, or other advice. For more information, please refer to the disclaimer at the end of this report, as well as our Terms of Service.*

Overview

Bitlayer made substantial strides in H1 2025, emerging as a leading force in Bitcoin Layer 2 innovation by deploying the first working implementation of BitVM and rapidly expanding its BTCFi ecosystem. Designed as a Bitcoin-equivalent Layer 2 with full EVM compatibility, Bitlayer enables advanced smart contract capabilities while preserving Bitcoin’s consensus and decentralization. The launch of the BitVM Bridge, a trust-minimized and non-custodial bridge, marked a foundational milestone, allowing native BTC to flow seamlessly into a programmable Bitcoin-aligned execution environment. This architecture unlocks Turing-complete application logic secured by Bitcoin itself, establishing a secure and scalable base layer for complex DeFi, structured products, and multichain applications.

The network’s progress was reinforced by high-profile infrastructure integrations including Chainlink for secure cross-chain messaging, Celestia for modular data availability, and Xverse and SafePal for wallet accessibility, positioning Bitlayer as a robust settlement layer for Bitcoin-native financial applications. Strategic partnerships with StakeStone, Chainbase, and Sundial, alongside collaborative milestones with Sui and major mining pools, further extended Bitlayer’s reach across liquidity networks, developer tooling, and institutional infrastructure. Bitlayer’s work with mining giants like AntPool, ViaBTC, and Foundry USA has brought Layer 2 programmability into closer alignment with Bitcoin’s base layer security. Onchain momentum kept pace with these technical and ecosystem advances, with daily transaction volumes consistently exceeding 160,000 and sustained user activity reflecting a maturing application landscape. Backed by a growing suite of DeFi protocols, developer participation, and cross-chain use cases, Bitlayer is laying the groundwork for Bitcoin’s programmable future at scale.

Key Developments: H1 2025

Bitlayer successfully transitioned the BitVM Bridge from testnet to mainnet, enabling a fully trust-minimized mechanism for bringing Bitcoin liquidity into DeFi ecosystems. The bridge uses a BitVM-based optimistic validation framework where BTC deposits are locked in on-chain contracts and represented as YBTC, a 1:1 pegged asset on supported networks. It leverages fraud proofs and a challenge window to secure peg-outs while utilizing a broker-assisted front-end process to enable faster user experience. This transition establishes Bitlayer as a key player in third-generation Bitcoin bridging, supporting programmable Bitcoin applications without relying on centralized custodians.
Bitlayer has partnered with several leading Bitcoin mining pools, including AntPool, ViaBTC, F2Pool, SpiderPool, and Foundry USA, to advance integration between the mining sector and Layer 2 infrastructure. These collaborations aim to align economic incentives and technical development across the value chain, enabling broader adoption of BTCFi applications built on Bitlayer. By working closely with top mining entities, Bitlayer is enhancing Bitcoin’s economic security. This strategic move strengthens Bitlayer’s position as a Bitcoin aligned Layer 2 that now collectively accounts for over 30% of Bitcoins hashrate.
In H1, Bitlayer secured strategic partnerships with Base, Starknet, Arbitrum, Sonic, and Plume Network to expand the BitVM Bridge across multiple ecosystems. These integrations enable native Bitcoin liquidity to flow into high-performance DeFi environments, allowing activities such as staking, lending, borrowing, and liquidity provisioning while maintaining Bitcoin’s underlying security model. The partnerships strengthen Bitlayer’s role in advancing trust-minimized, programmable Bitcoin infrastructure and set the stage for broader BTCFi adoption across leading Layer 1 and Layer 2 networks.
Bitlayer is pioneering Bitcoin’s programmable future by integrating the BitVM Bridge architecture to build a Bitcoin-equivalent Layer 2 with full EVM compatibility. By aligning the state settlement mechanism Bitcoin, Bitlayer preserves Bitcoin’s consensus integrity while enabling advanced smart contract capabilities off-chain. The architecture allows developers to write Turing-complete applications enforced through Bitcoin’s native security guarantees, using Taproot commitments and fraud-proof challenges. With this design, Bitlayer combines the credibility and decentralization of Bitcoin with the flexibility of Ethereum-style development, marking a pivotal step toward unlocking complex DeFi and modular applications on Bitcoin.
Chainlink went live on Bitlayer as its canonical cross-chain infrastructure, marking a critical milestone for the network’s interoperability roadmap. The integration brings Chainlink’s CCIP and decentralized oracle services to Bitlayer’s Bitcoin-native Layer 2, enabling secure cross-chain communication and data feeds. This move unlocks core infrastructure for BTCFi applications, enhances composability across ecosystems, and strengthens Bitlayer’s positioning as a scalable, programmable settlement layer for Bitcoin.
Bitlayer advanced the first working BitVM implementation through a coordinated network of strategic partners focused on enhancing Bitcoin programmability. The initiative emphasizes integrating BitVM with complementary frameworks like Layer 2 protocols, off-chain ZK circuits, and verifiable computation stacks, enabling expressive logic execution while preserving Bitcoin’s security guarantees. These efforts aim to standardize BitVM development pipelines, improve developer tooling, and reduce friction in deploying high-performance BTCFi applications. Through this structured integration approach, Bitlayer is accelerating the adoption of programmable use cases on Bitcoin.
Bitlayer and Sui achieved a major BTCFi milestone by launching the first trust-minimized BitVM bridge integration, enabling YBTC to bring native Bitcoin into the Sui ecosystem. YBTC allows Bitcoin holders to earn yield, participate in lending and borrowing markets, and access liquidity provisioning opportunities while maintaining BTC exposure. The BitVM-based bridge removes centralized intermediaries, creating a decentralized pathway for Bitcoin-backed assets across chains.
Bitlayer introduced several key technical upgrades to improve scalability and security across the network. These include upgrades to its Layer 2 rollup architecture, and internal benchmarking for more efficient cryptographic proof generation. These improvements reflect Bitlayer’s commitment to advancing high-throughput, Bitcoin-aligned smart contract execution and furthering its long-term roadmap toward scalable BTCFi infrastructure.
Bitlayer unveiled its BitVM Bridge Mainnet during Summer Launch 2025, introducing a trust-minimized BTC bridging solution that marks the first real-world implementation of the BitVM framework. This milestone enables users to mint YBTC, a one-to-one Bitcoin-backed asset usable across the Bitlayer Rollup and other supported chains, without relying on centralized custodians. Bitlayer also released its Network V2 whitepaper, outlining a dual-layer architecture with sub-second finality, decentralized sequencing, and Bitcoin-anchored fraud proofs, and previewed its upcoming V3 architecture aimed at institutional-grade, parallelized execution. These developments reinforce Bitlayer’s position as a technical leader driving Bitcoin’s evolution into a programmable and capital-efficient platform for DeFi and beyond.

Ecosystem

DeFi

BTCFi Carnival showcased Bitlayer’s accelerating push into Bitcoin-native DeFi, distributing over $2 million in token incentives across eight protocols. Week 3 featured DeSyn Protocol and DeAgentAI, focused on decentralized BTC fund creation and AI-based asset strategies. Week 4 brought Lorenzo and Cygnus Finance, enabling modular structured products and capital-efficient lending. In Week 5, bitfi, Jasper Vault, and RollDex launched BTC-backed savings, decentralized vaults, and multi-chain margin trading. Week 6 spotlighted BitZap, a zap aggregator for Bitcoin-native DeFi onboarding. Collectively, these campaigns highlighted Bitlayer’s role as a programmable Bitcoin settlement layer and positioned its DeFi ecosystem as a major destination for BTC-backed yield generation and innovation.
Bitlayer has officially launched its BTC Yield program, offering users up to 20% APY through structured BTCFi products. Built on Bitlayer’s Layer 2, the yield mechanism leverages modular onchain design and aims to provide predictable, transparent returns for BTC holders. The program supports both individual and institutional participants and emphasizes sustainability through dynamic rate management and onchain validation. This launch reinforces Bitlayer’s strategy to position itself as a core infrastructure layer for programmable Bitcoin yields.
Bitlayer successfully integrated the Monad testnet into its BitVM Bridge framework, further expanding the bridge’s compatibility across emerging Layer 1s. The integration demonstrates the modularity of BitVM’s design and its potential to support a broader range of execution environments beyond Bitcoin-native chains. This advancement enhances cross-chain asset interoperability and positions the BitVM Bridge as a versatile infrastructure layer for decentralized applications.

Enterprise & RWAs

Bitlayer and Sui announced a joint milestone in BTCFi interoperability by enabling native Bitcoin to be used within the Sui ecosystem through the BitVM Bridge. This marks a significant step in cross-chain Bitcoin utility, as it allows BTC holders to participate in decentralized finance applications on non-Bitcoin chains without relying on wrapped or custodial solutions. The integration underscores Bitlayer’s role in expanding Bitcoin’s composability across broader Web3 ecosystems and reflects growing institutional and developer interest in BTCFi infrastructure.
StakeStone announced a strategic integration with Bitlayer, connecting its omnichain liquidity infrastructure to the BitVM Bridge, the first implementation of BitVM. This collaboration enhances cross-chain BTC liquidity distribution, allowing Bitcoin to flow securely into broader blockchain ecosystems. The partnership combines StakeStone’s protocol-agnostic design with Bitlayer’s advanced bridging architecture to accelerate the growth of interoperable Bitcoin DeFi.
Bitlayer has integrated Celestia to supercharge its BitVM ecosystem with scalable, modular data availability. This partnership enhances BitVM’s execution environment by leveraging Celestia’s rollup-friendly infrastructure, reducing costs and improving data throughput for Bitcoin-based applications. The integration represents a significant step toward building modular BTCFi systems and reinforces Bitlayer’s position as a performant and interoperable Layer 2 secured by Bitcoin.
Bitlayer has integrated Xverse Wallet, one of the leading Bitcoin wallets, into its BitVM Bridge infrastructure. This integration allows users to access Bitlayer’s trust-minimized BTC bridge directly through Xverse, streamlining the onboarding experience and advancing adoption of BitVM-powered Bitcoin DeFi. By supporting customizable Bitcoin testnet configurations, Xverse enhances the accessibility and usability of Bitlayer’s infrastructure across the broader Bitcoin ecosystem.
Bitlayer has partnered with Chainbase, a Web3 data infrastructure platform, to streamline development for Bitcoin-based applications. Through this integration, developers gain access to low-latency, high-availability data APIs for Bitcoin, Bitlayer, and BitVM Bridge ecosystems. The collaboration simplifies data retrieval and smart contract deployment for BTCFi developers, making it easier to build, test, and scale applications leveraging Bitcoin liquidity. This partnership further strengthens Bitlayer’s role as a core enabler of secure, programmable Bitcoin DeFi.
SafePal, a leading self-custody wallet suite, has added support for the Bitlayer Network, enabling seamless interaction with Bitlayer’s Bitcoin Layer 2 ecosystem. The integration allows users to store, manage, and transact BTC within Bitlayer via SafePal’s hardware and software wallets, supporting both the SafePal App and browser extension. This collaboration strengthens Bitlayer’s security and accessibility infrastructure by leveraging SafePal’s multi-platform architecture and large user base. As a result, the partnership enhances onchain utility for BTC holders and facilitates broader adoption of Bitlayer’s Bitcoin-native applications across Web3.
Bitlayer announced a strategic partnership with Sundial to collaboratively advance the BitVM Bridge, marking a significant milestone in Bitcoin Layer 2 infrastructure. Sundial will contribute to technical development and security auditing of the BitVM Bridge, supporting its evolution as a trust-minimized Bitcoin bridge. This partnership also aligns with Bitlayer’s broader efforts to expand the BitVM ecosystem and improve Bitcoin-native programmability. By combining engineering resources and research capabilities, the collaboration reinforces Bitlayer’s goal of delivering secure, decentralized interoperability for Bitcoin across multiple blockchain environments.
Bitlayer has now raised a total of $30 million following a highly oversubscribed community funding round that added $5 million through platforms like CoinList, Echo, GoMining, and Holdstation. This success underscores strong grassroots demand and significantly expands the project's financial runway for scale and innovation. Previous funding rounds were backed by prominent investors including Franklin Templeton, Polychain Capital, Framework Ventures, and ABCDE, underscoring growing institutional confidence in Bitlayer’s Bitcoin Layer 2 vision. This capital positions Bitlayer to accelerate development of its BitVM-powered infrastructure, broaden cross-chain integrations, and scale BTCFi adoption across ecosystems.

Onchain Data

Daily Transactions

Source: Nansen Query

Throughout H1 2025, Bitlayer demonstrated consistent and robust transaction activity, underscoring its emergence as a performant and reliable Bitcoin Layer 2 network. Transaction volume remained elevated across the six-month period, with daily throughput consistently ranging between 160,000 and 220,000. Key surges occurred in late January, mid-February, and early April, aligning with major ecosystem developments including the launch of the BitVM Bridge, its integration with Monad testnet, and the progression of BTCFi campaigns. These patterns reflect a healthy correlation between technical advancements and onchain engagement, suggesting growing developer and user confidence in the platform’s infrastructure.

Following these spikes, Bitlayer sustained a steady throughput baseline from May onward, reinforcing its operational stability amid continued network expansion. This consistent performance is particularly noteworthy given the concurrent rollout of complex cross-chain integrations (e.g., with Chainlink and Celestia), institutional-grade wallet support via SafePal and Xverse, and yield-focused campaigns with protocols such as DeSyn, bitfi, and Jasper Vault. As the ecosystem diversified and transaction-heavy DeFi activity scaled, the network effectively absorbed demand without volatility. Taken together, the transactional data highlights Bitlayer’s readiness to support high-throughput, BTC-native applications at scale—solidifying its position as a foundational layer in Bitcoin’s programmable future.

Daily Active Addresses

Source: Nansen Query

During H1 2025, Bitlayer exhibited a strong and dynamic pattern of user activity, with active address counts reaching a notable peak above 60,000 in January. This surge followed a steady climb that began in December 2024, coinciding with the initial rollout of Bitlayer’s BitVM Bridge and early BTCFi ecosystem campaigns. The spike in unique sender addresses reflects growing interest in BitVM-based infrastructure and a sharp uptick in application-level experimentation driven by new protocol deployments.

While address activity moderated after January highs, Bitlayer sustained a healthy and consistent user base throughout Q2, with daily active sender counts ranging between 5,000 and 10,000. This stability highlights the network’s ability to retain engaged users even as early campaign-driven spikes normalized. A clear uptick in late July, coinciding with high-impact integrations such as Chainlink, Celestia, and Xverse Wallet, points to renewed ecosystem momentum and expanding participation. These trends underscore Bitlayer’s progress in establishing a resilient foundation for long-term growth across the BTCFi landscape.

Top Entities by Users and Transactions

Source: Nansen Query - Top Entities by Users

Source: Nansen Query - Top Entities by Transactions

During H1 2025, Bitlayer showcased a robust and evolving onchain economy, with strong activity across both user and transaction metrics. Based on the top entities by unique users, Bitlayer itself accounted for 32.8% of interactions, reflecting widespread native engagement from wallets, infrastructure, and ecosystem-level contracts. Tether (25.77%) and BitZap (23.3%) followed closely, indicating healthy adoption of both stablecoin rails and emerging DeFi applications within the BTCFi ecosystem. Notably, Wrapped Bitcoin (11.67%) and DeSyn (6.46%) rounded out the top five, reinforcing a user base increasingly active in cross-chain BTC liquidity and structured DeFi products.

Transaction-level data further validated the growing utility of the Bitlayer network. Bitlayer-originated transactions made up 29.04% of all activity, while Wrapped Bitcoin and Tether posted similarly high shares at 22.8% and 22.72%, respectively. Ethereum bridged assets accounted for 19.65%, highlighting Bitlayer’s expanding interoperability footprint and relevance in multichain asset flows. BitZap contributed 5.79%, reflecting its role as an emerging protocol driving both user engagement and transactional throughput. Together, these figures illustrate a diverse and maturing application layer where both core infrastructure and novel protocols are contributing meaningfully to overall network activity.

# Closing Thoughts

H1 2025 marked a foundational leap forward for Bitlayer, as the network matured into a high-performance Bitcoin Layer 2 through the rollout of key infrastructure like the BitVM Bridge and the first BitVM Mainnet. These advancements established Bitlayer as a pioneer in enabling programmable Bitcoin, unlocking Turing-complete smart contracts backed by Bitcoin's native security guarantees. The platform’s architecture—rooted in Taproot, fraud proofs, and off-chain computation, cemented its commitment to decentralization and trust minimization, while delivering the flexibility needed to support next-generation DeFi and modular applications.

Bitlayer’s ecosystem expanded rapidly through a series of high-impact DeFi campaigns, the launch of a BTC Yield program, and strategic integrations with core infrastructure providers like Chainlink, Celestia, SafePal, and Xverse. Interoperability milestones with networks like Monad and Sui further positioned Bitlayer as a Bitcoin-native hub for cross-chain liquidity and real-world financial applications. Strong user and transaction growth throughout the period validated this momentum, with stable activity and increased engagement across key BTCFi protocols. Backed by strong technical execution and deep alignment with the Bitcoin ethos, Bitlayer enters the second half of the year as a mission-critical platform shaping Bitcoin’s programmable future.