Bitcoin L2s set to explode as Runes congest BTC network

) token standard allowing users to create fungible tokens on the Bitcoin blockchain. They were created by Casey Rodarmor, the creator of Ordinals, whichfrom blockchain asset management firm Spartan Group, the introduction of Ordinals resulted in Bitcoin fees increasing as much as 280% year-to-date by December 2023.

“Runes have brought excitement back to the idea of building on Bitcoin. But if you are going to build a new economy, storing and transferring value are not enough. You need Turing-complete smart contracts, developer tools and much more,” he added.Given these needs, a number of Bitcoin L2 solutions are coming to fruition.

The Stacks network, which launched in January 2021, is another well-known Bitcoin L2. The Stacks Bitcoin L2 uses a proof-of-transfer consensus mechanism that runs parallel to and reuses the computational power of “With these changes, Stacks is moving into a true, usable L2 category that unlocks BTC capital from the layer-1 for use in L2 apps. Think DeFi , Web3 identities, real-world assets and more. $1 trillion in BTC capital can finally shift from a passive asset to a productive asset,” said Shah.Alexei Zamyatin, co-founder of Build on Bitcoin , told Cointelegraph that he estimates at least 40 Bitcoin L2s have recently been announced.

Yet Vinger explained that a Coinweb reactive smart contract can be used to monitor transactions involving Runes to add mechanisms such as collateralization and other incentive mechanisms to extend use cases.

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