Bitcoin Layer 2 Ecosystem Expands with Stacks, Merlin Chain, and More

The Bitcoin Layer 2 (L2) ecosystem has undergone significant development in recent years. These secondary networks are built on top of the Bitcoin mainnet and enable fast, low-cost transactions and complex smart contracts.

By processing data off-chain and anchoring the final results to the Bitcoin blockchain, L2 protocols unlock 'BTCFi' – a new ecosystem of decentralized finance, lending, and yield-bearing products for Bitcoin holders. This has transformed Bitcoin from a passive store of value into an active, productive financial asset.