Binance, the cryptocurrency exchange, recently collaborated with Bitcoin Layer2 project BEVM to launch an airdrop campaign, attracting market attention. It is worth noting that Binance has not previously collaborated with any other projects, so what makes BEVM able to collaborate with Binance? What possible secrets lie behind this partnership?
Binance “Needs” Bitcoin L2
Looking back at the competition among centralized exchanges (CEX) in the Bitcoin ecosystem since 2023, it becomes clear that BTC L2’s strategic significance in the Web3 wallet dimension competition at CEX in 2024.
As we all know, OKX was undoubtedly the biggest winner in the Bitcoin ecosystem wave in 2023. It quickly responded to market demands and user traffic by collaborating with UniSat Wallet to establish the BRC-20 industry standard. OKX also supported BRC20 tokens and BTC NFT trading and staking, and launched Bitcoin ecosystem standard BRC20-S and token tools. It successfully captured the market demand and user traffic in the early stages.
In contrast, Binance, as the leading exchange, has fallen behind OKX in terms of Web3 wallets and Bitcoin ecosystem layout. This led to the loss of a large amount of Bitcoin ecosystem traffic, missing out on the potential market opportunities. Therefore, since the end of last year, Binance has been accelerating its Web3 wallet and Bitcoin ecosystem construction, continuously raising the priority level.
With the advantages of competitors like OKX becoming more solid, it becomes a key challenge for Binance to find a breakthrough and achieve a curve overtaking in the Bitcoin ecosystem in 2024.
Infrastructure projects often play the role of “water sellers” in narratives and generally become a necessity accompanied by the continuous construction of the track. Therefore, supporting BTC L2 infrastructure projects can be a good method and strategy for Binance:
By supporting a top player in the BTC L2 field, Binance can attract and carry Bitcoin ecosystem user traffic and community attention, and open channels for market capital inflows. This can achieve a curve overtaking in OKX’s Bitcoin ecosystem layout.
From this perspective, Binance’s collaboration with BEVM may serve as a litmus test. Additionally, top exchanges often have abundant Web3 resources, including financial support and product windows, which can greatly catalyze BTC L2 projects and unleash their liquidity. OKX has already laid out Bitcoin L2 projects like B2 Network and Bitcoin ecosystem project Bitmap Tech (formerly Recursiverse).
Therefore, supporting its own BTC L2 team in a timely manner is crucial for Binance to compete with OKX in the long run in the Bitcoin ecosystem in 2024. This will also greatly expand the size and gameplay of the entire BTC L2 track and may act as a catalyst for a new round of market trends.
Why BEVM?
The key to Binance’s collaboration with BEVM lies in accelerating the embrace of the Bitcoin L2 ecosystem, expanding Binance’s leading position in the new Bitcoin narrative, and laying the foundation for the growth of new DApps, new users, and ultimately the total value locked (TVL) in the Bitcoin ecosystem.
Of course, apart from BEVM, there are many other “Bitcoin L2” projects on the market, so why did Binance choose BEVM?
Firstly, from a certain perspective, BEVM can be considered a “veteran” in the Bitcoin ecosystem, having undergone time and market tests. It is lesser-known that the BEVM team was established in 2017, and its founder Gavin participated in the development of central bank digital currencies (CBDC) in 2016. He wrote the first viable CBDC Demo based on Bitcoin and Ethereum blockchains.
In 2017, the team completed the underlying code of the well-known public chain Biyuan Chain from scratch. Then, at the end of 2017, they left Biyuan Chain and established BEVM.
In 2018, Gavin launched ChainX, a BTC L2 solution based on Polkadot, which achieved over 100,000 BTC cross-chain and 500,000+ BTC Hash Lock. In 2021, based on the Bitcoin Taproot upgrade, a new BTC L2 solution was completed, based on Schnorr Signature and MAST Contract. This solution has become one of the widely adopted standards in the Bitcoin L2 field.
Based on these achievements, the BEVM team summarized nearly 7 years of BTC L2 entrepreneurship and practical experience in May 2023 and proposed the fully decentralized Taproot-based BTC L2 solution called Taproot Consensus.
Taproot Consensus enables complete decentralization of Bitcoin management through a BFT consensus network composed of over 1000 Bitcoin light nodes. This solves the problem of introducing BTC into the second layer network in a trustless manner, ultimately achieving Bitcoin scalability.
It is worth noting that most BTC L2 solutions on the market can be roughly categorized into five types from a technical implementation perspective: Bitcoin sidechains, UTXO+ client verification, Taproot Consensus, multi-signature + EVM, and Roullp. Among them, apart from Bitcoin sidechains and UTXO+ client verification solutions with poor scalability and high implementation thresholds, the majority of so-called Bitcoin L2 core gameplay revolves around “EVM+ multi-signature cross-chain bridges.” This is not fundamentally different from the introduction of BTC into the Ethereum ecosystem with ERC20 tokens like tBTC and renBTC in the past.
However, while multi-signature solutions address single-point security risks, it is difficult to avoid centralization risks. Therefore, regardless of how BTC L2 project operators view the core issue of “decentralization” in the crypto world, it is better to design mechanisms that make it “unable to be evil” instead of simply believing that BTC L2 will “not be evil.”
Taproot Consensus based on Bitcoin’s native technology truly achieves fully decentralized BTC L2. Moreover, this solution surpasses other BTC L2 projects in terms of technical nativeness, degree of decentralization, and implementability in the market. This is likely an important reason why Binance’s web3 chose BEVM as the first BTC L2 project to collaborate with.
It is worth mentioning that BEVM recently completed a financing round with a valuation of $200 million, raising tens of millions of dollars. Top crypto institutions, including Rocktree Capital, Waterdrip Capital, Arkstream Capital, ViaBTC Capital, MH Venture, and Mapleblock, participated in the investment. This demonstrates BEVM’s recognition in the capital market. On March 28, BEVM officially launched its mainnet, and within a week, it already had over 600,000 user addresses, demonstrating its market and community competitiveness in the BTC L2 field.
What’s Next?
Great things often have small beginnings, and the logic of the market always involves hidden factors. The value discovery of various concept sectors or specific currencies has its inherent development logic.
As the first officially announced BTC L2 project that Binance collaborates with, BEVM undoubtedly leaves room for imagination in the market. What will be Binance’s next step? Will BEVM be one of the first BTC L2 projects Binance invests in? Will BEVM be the first BTC L2 project to be listed on Binance Exchange? All these questions await answers.
However, it can be certain that this collaboration is only the beginning of Binance’s “BTC L2 strategy” implementation and an important exploration of Binance’s ambition to build its own “Binance Bitcoin L2 territory.”
Based on Binance’s past style, regular Binance Labs incubator projects often follow a fixed path: “investment acquisition – new coin mining/listing.” Looking from this perspective, Binance’s first airdrop collaboration with BEVM is likely just the beginning, and BEVM might become part of Binance Labs’ portfolio. We can look forward to it.
It is worth mentioning that Binance web3 and BEVM also recently hosted a Bitcoin ecosystem-themed Twitter Space, which is a rare online Twitter Space event initiated by Binance web3. This further highlights the extraordinary relationship between the two.
Regardless, as the most imaginative Bitcoin L2 track, just like Arbitrum and Optimism for Ethereum Layer2 in 2021, it is certain that it will produce several billion-dollar or even trillion-dollar projects. Binance’s bet on the BTC L2 track is both due to the track’s potential and the overall trend. No exchange would be foolish enough to ignore such a huge and attractive blue ocean market like the Bitcoin ecosystem.
For ordinary users, recognizing projects and seizing opportunities are the core to capturing this wave of wealth opportunities. As the first BTC L2 project to collaborate with Binance web3, BEVM is undoubtedly a rare BTC L2 project worth paying attention to.
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