BOB, Bitcoin ETFs, Stacks, Rootstock, Bitcoin Virtual Machine

• In 2023, the surge in Bitcoin inscriptions sparked excitement among crypto users. Inscriptions have opened up more possibilities for Bitcoin, which was originally used more as digital gold. Currently, the total number of Ordinals inscriptions has surpassed 68M.

• Bitcoin reached a new all-time high of $73,000 in 2024 with the occurrence of the halving once again drawing market attention to the world's most valuable cryptocurrency. This year also marked the explosion of Bitcoin Layer 2 solutions — total TVL in Bitcoin Layer 2s exceeded $2B at one point in 2024 before falling slightly below that mark.

• As of July 31, Merlin dominated the BTC Layer 2 ecosystem, holding 44% of the total locked value of $1.76B. Bitlayer follows at 19.6% with Rootstock at 10.31%. Together, these three chains accounted for nearly three-quarters of the total TVL.

• BOB, a hybrid Layer-2 powered by Bitcoin and Ethereum, launched on May 1 2024. Since its launch, BOB has seen substantial user adoption with over 133,000 unique addresses. The weekly active addresses chart shows a peak of over 30K users in early June. Although the numbers have slightly decreased, the 30-day moving average of active addresses remains stable around 16K, indicating strong user retention.

• Developer engagement on BOB is on the rise, with close to 300 active contract addresses weekly. This consistent growth showcases the platform's appeal to developers for building and deploying smart contracts.

• The BOB Gateway facilitates seamless Bitcoin swaps into wrapped Bitcoin, enabling users to earn yield efficiently. So far, 8,712 users have used the gateway, bridging 13.521 BTC ($734,090.24 USD).

• 💦🔬 Tx-Level Alpha: In the past 30 days, the BOB onramp contract consumed the most gas, totaling 6.4 ETH ($15,549 USD). Here's an example transaction which uses the onramp contract.

• Over the past eight months, Bitcoin spot ETF issuers have accumulated 4.5% of Bitcoin's circulating supply. However, BTC price fluctuations have significantly impacted the U.S. dollar valuation of their holdings. Since the beginning of August 2024, and amid a broader crypto market crash, they have lost nearly $10B in the value of their BTC holdings.

• Since the approval of Bitcoin ETFs, Grayscale has been consistently decreasing its exposure, while other issuers have been accumulating BTC. Also, in late July, Grayscale introduced a new low-cost Bitcoin Spot ETF called Grayscale Mini and transferred a significant portion of its holdings into it.

• Grayscale was the dominant Bitcoin Spot ETF issuer for several months. However, as Grayscale began to take profits by selling its BTC holdings, other issuers started accumulating. This shift resulted in BlackRock becoming the largest BTC holder among the issuers.

• Bitcoin Summer energized the Bitcoin Layer 2 (L2) ecosystem. In June alone, Stacks, the leading Bitcoin L2 in terms of developer activity, attracted 134,000+ active users. This surge in new users can be attributed to several key developments: the approval of the Grayscale Stacks Trust, optimistic news regarding Stacks and the SEC and the inclusion of wBTC Signer BitGo into Stacks' Signer network. These advancements in regulatory compliance and institutional adoption have made Stacks a hot topic.

• Stacks is the only Bitcoin L2 with native Bitcoin (BTC) rewards, where the last cycles (each 2 weeks) distributed over 40 BTC ($2.2M) to a group of Stackers, an open decentralized network of people stacking STX to secure the network. Everyone can stack their STX to earn BTC rewards.

• The increase in users flocking to Stacks' Decentralized Finance ecosystem on Bitcoin can be credited to Stacking DAOs 60M STX TVL milestone. Stacking DAO is the leading Bitcoin L2 liquid staking protocol on Stacks allowing users to stack their STX, receive stSTX, and use it in DeFi protocols.

• Michael Zhao's report on "Bitcoin Renaissance" explains that by using the ratio of Total Value Locked (TVL) to market cap, we see Bitcoin's usage potential. Currently, 17% of Ethereum's value is used in dApps, but Bitcoin uses only 0.06%. Matching Ethereum's share would unlock $180 billion in Bitcoin. This is a conservative estimate since developers often test on cheaper blockchains first. New BTC L2 technologies aim to expand Bitcoin's use beyond a store of value. A key player in this space, Rootstock, the longest standing Bitcoin sidechain, is untapping this market by leveraging its infrastructure secured by Bitcoin hash power and the EVM compatibility.

• To seize the $180B opportunity, BTC technology needs to expand its utility, leading to the rise of BTC L2s (Layer 2 solutions). Rootstock is part of the "big four BTC L2" networks as categorised by the Spartan report. In the first six months of 2024, Rootstock has shown strong growth, benefiting from BTC halving and partnerships with Uniswap, The Graph, Open Ocean, and Wormhole that have enhanced its cross-chain interoperability. Other BTC L2s in the market are undergoing a maturity process that Rootstock has already completed. Proof of this is that Rootstock's transaction slope remained positive, highlighting its advanced development.

• 1.3K Bitcoins in Sovryn's FastBTC for 2024 — the existing protocols within the Rootstock ecosystem are key to demonstrating market fit. Sovryn exemplifies this potential with its FastBTC bridge, handling volumes that surpass all other non-native bridges of other BTC L2s combined, highlighting the significant demand and potential of these solutions.

• 💦🔬 Tx-Level Alpha: This is the first transaction ever dispute-verified on Bitcoin mainnet using Bitvmx. The Bitcoin L2 space is expanding and this technology is creating a clear path to build safe, secure, performant bridges with Bitcoin. The existence of this transaction shows that verification of a SNARK Proof on Bitcoin is possible without requiring a Bitcoin hard fork or OP_CAT.

• BVM is the leading Rollup-as-a-Service (RaaS) platform on Bitcoin, in which anyone can easily deploy and run a Bitcoin L2/L3 for just $99/month, with no coding required. You can customize your rollup on Bitcoin using BVM with various modules, including modular data availability solutions such as Avail DA, Celestia DA, and more. You can also choose between ZK Rollup and OP Rollup, along with different Hardware attributes for your own Bitcoin L2/L3. Rollups powered by BVM can have high speed (<1s block time) and low gas fee ($0.001 per tx), enabling the possibilities of consumer apps on Bitcoin. Total value locked (TVL) within blockchains deployed on BVM has reached a new milestone of $8.2 million, with NakaChain, EAIChain, and RuneChain as major contributors to this growth.

• BVM recently introduced Bitcoin RaaS Studio, a no-code tool that enables anyone to create a rollup on Bitcoin in less than 2 minutes. This visual programming editor by BVM is completely self-service and lets you easily design your rollup blockchain by dragging and dropping modules, very similar to Scratch UX. There are already 10+ projects running their own roll-ups using BVM tech stacks, accumulating +243k wallets on mainnet.

• By optimizing costs through integrations with data availability solutions like Filecoin, Polygon, Avail, and Celestia, BVM is helping developers build more efficient and sustainable projects in all sectors including DeFi, AI and more. Backed by BVM, Eternal AI, and Bittendo have optimized costs by utilizing Celestia for data availability. This makes them one of the most efficient rollups, with a low cost per MB of 0.02 TIA.