Our weekly crypto derivatives analytics report delves into macro events; the current state of crypto and trading signals from spot trading volume; and futures, options and perpetual contracts.

As BTC's spot price dropped below its ATH of $111K, sentiment in the options markets shifted. The previous bullish skew in volatility smiles has diminished, briefly favoring OTM puts before returning to neutral. ETH's volatility term structure is now compressed, with short-tenor skew also leaning toward OTM puts, while ETH funding rates show more bullish sentiment than options markets implies. 

On another note, BTC’s much steeper term structure than that of ETH suggests low protection over BTC for investors.

Please check out the report’s highlights.

Market is unwilling to give up another ATH

The crypto market has declined over the past two weeks. Despite low volatility and decreasing open interest, most tokens, including BTC, still have positive perpetual funding rates, suggesting 

optimism for a rebound toward the ATH of $111.9K

. BTC contracts lead the market with over $5B in open interest, but negative price trends have reduced daily perp trading volumes to about half of the mid-May levels.

BTC realized volatility consistently at a low level

BTC's recent rise to an all-time high featured unexpectedly low volatility, and the current sideways price action has seen even lower implied volatility. Last week, even when BTC hit a low of $103K on May 31, 2025, implied volatility remained at 35%, a level it has consistently rebounded from for 19 months. An exception occurred in mid-May, when 7-day implied volatility dropped to 31% before recovering. This decline in short-dated volatility has steepened BTC’s term structure, contrasting with ETH's flat volatility curve.

ETH continues its outperformance with higher volatility

BTC's performance remains a key indicator for the crypto market, with its recent drop leading to declines in most of the top 10 cryptocurrencies. However, ETH has shown more resilience, down only 1.67% over the past week as compared to BTC's drop of over 3%. Realized volatility for ETH has flattened at 60%, while implied volatility has decreased across tenors, compressing the term structure. Similarly, daily trade volumes in ETH options have remained lower at the end of May and early June as compared to mid-May, when call option volumes exceeded $150M.

Advanced

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Bybit X Block Scholes Crypto Derivatives Analytics Report (Jun 4, 2025): ETH outperforms while investors buy more protection than BTC

The Ethereum Foundation has reorganized its leadership and protocol teams to align with a new roadmap focused on scaling Layer 1, improving Layer 2 data storage through blobs, and enhancing user experience.

Daily top performer — Grass Network (GRASS)

The S&P 500 was nearly flat, rising 0.01%, as weak ADP jobs data raised concerns ahead of the key payrolls report. Gold climbed to $3,382 on weak US data and rising US-China tensions, supported by falling yields and a softer dollar. The Coindesk Indices, which tracks the broader crypto market, fell 1.32%, with Bitcoin and Ether down 1.24% and 0.42%, respectively in the past 24 hours. Trade these markets and more with up to 500x leverage on Bybit MT5 using this 

Today’s top performer is GRASS, up 7.5% after Grass launched a video search engine powered by a billion-video dataset for frame-level AI discovery.

Grass Network (GRASS), founded in 2023, is a decentralized Solana-based protocol that turns unused internet bandwidth into a resource for gathering and organizing public web data to support AI development. 

, a powerful tool that lets users find specific visual content within videos using frame analysis instead of relying on transcripts or tags. The Grass Foundation has built one of the largest public video datasets—over 1 billion videos, segmented by scene with keyframe annotations—and plans to process over 4 billion more. Early access is available to researchers, journalists, and nonprofits.

Check out the latest prices, charts, and data of 

The Ethereum Foundation has reorganized its leadership and protocol teams to align with a new roadmap focused on scaling Layer 1, improving Layer 2 data storage through blobs, and enhancing user experience. Core developers Tim Beiko, Alex Stokes, and Barnabé Monnot emphasized that Ethereum is at a pivotal moment to scale both its technology and values globally. New team leads have been appointed for each area, and the foundation stressed cross-team collaboration to tackle complex challenges. The changes follow the replacement of Executive Director Aya Miyaguchi with co-executive directors Hsiao-Wei Wang and Tomasz Stańczak.

Yesterday, BTC spot ETFs saw $197 million in net outflows, all from non-GBTC funds, while GBTC recorded no change.

 is a new decentralized stablecoin project on Monad testnet, focused on privacy through zero-knowledge proofs via Succinct’s SP1 zkVM. Users can mint USDm by depositing MON or ETH, enabling faster, private DeFi interactions without moving tokens. Early users may benefit if a points program launches later.

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Ethereum Foundation reshapes leadership to drive new roadmap on scaling and UX improvements

Privasea is a decentralized AI network that uses advanced FHE technology to enable secure computations on encrypted data without exposing the original information.

The arrival of AI has unleashed unprecedented computational power and problem-solving capabilities across virtually every industry. However, as AI solutions multiply, so do concerns about how our sensitive data is being handled, processed and protected.

Privasea (PRAI) emerges as a solution to these fundamental privacy challenges through its decentralized AI network, which enables computations while maintaining complete data confidentiality. This article explores Privasea's innovative approach to confidential computing, how it works — and why it matters in our increasingly AI-driven world.

 is a decentralized AI network that uses advanced fully homomorphic encryption (FHE) technology to enable secure computations on encrypted data without exposing the original information, ensuring data privacy throughout the entire AI process.

 and security experts who recognized that AI's exponential growth created unprecedented privacy challenges for organizations handling sensitive data. The team developed innovative FHE technology to enable AI computation on encrypted data without exposing the underlying information.

Privasea quickly attracted significant investment from major players in the blockchain and cryptocurrency spaces. The company's seed funding round secured $5 million from respected investors, including Binance Labs, Gate Labs, MH Ventures, K300 Ventures and QB Ventures.

Following this initial success, Privasea raised an additional $15 million in its Series A round, bringing the company's valuation to $180 million. This round was led by GSR, Amber and Echo, with continued support from notable investors such as Binance Labs, OKX Ventures, Gate Labs and Laser Digital.

Privasea aims to eliminate the fundamental trade-off between AI functionality and data privacy that has prevented widespread adoption across sensitive industries. Now, organizations can leverage powerful AI capabilities while keeping confidential data fully encrypted throughout the computation process.

The platform also addresses regulatory compliance barriers that prevent organizations from adopting AI solutions due to data protection requirements such as 

. By solving these privacy challenges, Privasea ultimately aims to build trust between users and AI systems, encouraging broader participation in data-driven innovation.

 that transforms FHE from a theoretical concept into a practical application: the Application Layer, Optimisation Layer, Arithmetic Layer and Primitive Layer work together to enable secure AI computation on encrypted data.

The HESea Library forms the foundation of Privasea's technology stack. This open-source library provides developers with efficient implementations of popular FHE schemes and cryptographic optimizations needed for secure computation on encrypted information.

The Privasea API builds on this foundation to offer developers comprehensive tools for creating privacy-preserving AI applications. It serves as the primary gateway to the network, allowing seamless integration of advanced privacy features into existing applications.

Privanetix operates as the distributed computation network in which encrypted data processing occurs. This interconnected system of nodes performs FHE calculations while maintaining data confidentiality, with the Privasea Smart Contract Kit managing network operations and reward distribution via blockchain technology.

The process begins when users encrypt their data using FHE protocols before uploading it to the network. Once uploaded, the distributed Privanetix nodes perform AI computations while data remains encrypted throughout, ensuring privacy is maintained from start to finish.

 to enable AI computation and preserve data privacy.

The ImHuman™ app is the world's first mobile application to use FHE to verify human identity without exposing biometric data. Users can mint a Proof of Human 

 through facial scanning, with all biometric information remaining fully encrypted throughout the verification process.

DeepSea serves as Privasea's decentralized mainnet compute layer in which all FHE-secured AI tasks are processed. This operational foundation incorporates Privanetix, WorkHeart and Acceleration Nodes to deliver optimal speed, security and performance for encrypted computations. It integrates AI agent models, facial recognition and private machine learning capabilities, enabling organizations to leverage AI while maintaining complete data privacy across industries handling sensitive information.

Privasea has developed the world's first privacy-preserving 

 running on the DeepSea Network. This agent allows developers and organizations to easily deploy FHE AI tasks on user data without exposing the underlying information. The built-in models for biometric, medical and financial use cases work alongside the user-friendly API for direct 

Privasea uses two node types to power its computational infrastructure.

Privasea has achieved key development milestones while securing substantial funding to support its privacy-preserving AI vision. In 2023, the project launched its testnet V1 and completed a $5 million seed funding round from prominent investors.

The team accelerated development throughout 2024 with multiple testnet iterations, releasing testnets V2 and V3 alongside the WorkHeart Node hardware. The ImHuman app reached 240,000 users as Privasea secured an additional $15 million in Series A funding.

Looking ahead to 2025, Privasea plans to launch the DeepSea mainnet and conduct its PRAI token sale while expanding AI 

 use cases across its ecosystem. The project’s road map extends into 2026 with planned collaborations with Web 2.0 and AI enterprises alongside global expansion of privacy computing solutions.

 of the Privasea ecosystem, has a total supply of 1 billion. Its distribution prioritizes network sustainability, with 35% allocated to mining and staking rewards for participants who provide FHE and privacy services. In addition, its team receives 13% with performance-based vesting, while backers and strategic partners hold 22.5% of the total supply. Marketing and community development account for 15%, with 10.5% reserved for unforeseen needs and 4% dedicated to market liquidity.

PRAI is used to enable access to confidential AI computing services and cover transaction fees for secure computations across Privasea’s network. The token powers identity verification within the ImHuman app and allows users to activate AI agents for data analysis and automation.

PRAI holders can stake their PRAI to support network operations while earning rewards and participating in governance decisions. This utility-driven model ties PRAI's value directly to ecosystem usage and ensures aligned incentives between users, developers and network operators.

Looking to trade Privasea tokens? Bybit now offers the PRAI/USDT Perpetual contract. To get started, you'll first need to create a Bybit account, then fund it with cryptocurrency and navigate to the 

While Privasea demonstrates innovative technology and strong backing in the privacy-preserving AI space, investors must carefully weigh its growth outlook against potential risk factors.

Privasea (PRAI) shows promising potential, with substantial financial backing and innovative encoding technology. Increasing demand for decentralized storage solutions provides a favorable market environment. However, potential investors should 

 and consider their risk tolerance, particularly given Privasea’s early position in its development journey.

Privasea represents a breakthrough in addressing AI's privacy challenges through innovative FHE technology. With substantial backing from leading investors and a comprehensive ecosystem including ImHuman, DeepSea and specialized nodes, the project is well-positioned to enable widespread AI adoption across privacy-sensitive industries.

Intermediate

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Privasea (PRAI): Navigating the sea of privacy in AI

Gold’s resilience through Q2 2025 continues to be supported by broad macroeconomic headwinds. 

Gold’s resilience through Q2 2025 continues to be supported by broad macroeconomic headwinds. While equities remain flat year-to-date, gold has gained 28%, bolstered by a weakening US dollar and lingering inflation. With gold priced in dollars, any drop in the currency’s value enhances its appeal — particularly to international investors seeking protection from currency devaluation.

Persistent inflation continues to erode the real returns of fiat currencies, further strengthening gold’s role as a hedge. Meanwhile, the S&P 500 remains stagnant, underperforming relative to both gold and silver and highlighting the precious metals’ safe-haven status during periods of macro uncertainty.

Looking ahead, attention will be turning to the US Federal Reserve.

 The next interest rate decision is scheduled for 

, but markets widely expect rates to remain unchanged at 4.5%. The following meeting, on 

, is viewed as a more likely window for a potential rate cut. A lower interest rate environment would typically weaken the dollar and boost gold, as the opportunity cost of holding non-yielding assets declines.

Geopolitical uncertainty and tariff risks

Geopolitical trade tensions remain a major driver of gold’s outlook. President Trump’s tariff policies, particularly on European Union imports, continue to dominate headlines. Originally expected to begin on June 1, the administration granted a delay, pushing the 50% EU tariff decision out to 

 covering global trade partners is now set to expire 

These back-to-back July deadlines have created a window of relative calm — but expectations are rising. If no deals are reached, and tariffs resume, demand for gold and silver as safe-haven assets could spike sharply.

The market has begun to price in the risk. Exporters, importers and investors are increasingly favoring metals over vulnerable currencies such as the Canadian dollar (CAD), Chinese yuan (CNY) and Mexican peso (MXN). As the July tariff deadlines approach, gold’s role as a neutral reserve asset may be tested again.

From a technical standpoint, both gold and silver remain in bullish territory. Gold’s 

 (MACD) is turning positive again, suggesting that short-term price momentum is reaccelerating. The 12-day moving average is trending above the 26-day, and 

 (RSI) remains under 60 — indicating there’s still room for further upside before overbought conditions emerge.

Gold’s key level remains at $3,500, while the next upside technical target is $4,000 by year end, which is consistent with prior projections.

Silver is now testing the $35 level — its highest since 2012. A confirmed breakout above $35 could trigger renewed buying and fast momentum toward the 

, last seen in 2011. Technical traders are closely watching this level, as sentiment in silver has lagged behind gold until now but is beginning to shift.

China continues to be a major source of physical demand. With strict capital controls and ongoing economic pressures, Chinese investors are increasingly turning toward gold to preserve capital. As the yuan weakens and growth expectations moderate, gold is gaining status as both a hedge and a domestic alternative to holding foreign currencies or equities.

This trend reinforces gold’s base of long-term demand — particularly as central banks and high–net worth individuals in emerging markets increase their allocation to hard assets.

Silver’s long-standing correlation with gold has once again come into play. While gold led the rally earlier in the year, silver is now attracting renewed attention — especially as it approaches the key resistance level at $35. Notably, silver attempted to break above $35 in 

. These three attempts mark the only serious challenges to the $35 level since 2012, making this zone a critical technical threshold. A confirmed breakout above $35 could generate strong momentum toward silver’s 

, offering a hybrid profile: part safe haven, part cyclical asset. This makes silver a valuable diversification tool in portfolios seeking exposure to both macro stress and global recovery trends.

June 2025 marks a turning point, a brief pause ahead of what could be a highly volatile July for precious metals. With major tariff delays set to expire on July 8 and 9, and a possible Fed rate cut on July 30, traders are already positioning for a significant move in both gold and silver.

With technical momentum still constructive and macro risks building, gold remains on track to reach the $4,000 mark by year end. Silver, meanwhile, is approaching a major breakout level and could become the next headline trade if it crosses $35.

In the weeks ahead, gold and silver may prove to be the key assets navigating through global uncertainty — offering both protection and opportunity.

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Bybit X FXStreet TradFi Report: Gold on track for $4,000 by the end of 2025

Bybit Learn

Bitcoin

Bitcoin Layer 2 solutions help with scaling by selecting the information they pass back and forth. Learn more about them here.

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Bitcoin's position as the most popular cryptocurrency can be both an advantage and a problem for it. The Bitcoin ecosystem is one of the most secure and dependable options available, but having so many people rely on the Bitcoin network can also lead to congestion. During busy times of day, transaction speeds slow and 

. One potential solution to this problem lies in Bitcoin Layer 2 technologies. Keep reading to find out how these scaling solutions work, and to discover the best current Bitcoin Layer 2 options.

A Bitcoin Layer 2 solution is a protocol that runs alongside the main Bitcoin chain. It improves Bitcoin's scalability, so the network can handle large amounts of transactions without a reduction in transaction speed or an increase in transaction prices.

How Does a Bitcoin Layer 2 Solution Work?

Bitcoin Layer 2 solutions are essentially independent blockchains that contain Bitcoin-compatible 

 and software. They have the ability to process transactions, just as the Bitcoin network does. A Layer 2 accepts and manages a variety of transactions, such as payments, trades and data storage. With Bitcoin, the Layer 2 system is connected to the main Bitcoin chain, so it passes the record of these transactions to Bitcoin and can pull data from Bitcoin when necessary. It runs alongside Bitcoin, and is constantly updating to stay in step with the main chain.

Bitcoin Layer 2 solutions help with scaling by being selective about the information they pass back and forth. Instead of processing every single transaction on Bitcoin, one at a time, a Bitcoin Layer 2 processes transactions off-chain and only sends essential information to the main Bitcoin chain. For example, a Bitcoin Layer 2 that handles payments might only store payment confirmations on Bitcoin, instead of using the network for every step of requesting, transferring and receiving the payment.

Some Layer 2s make transactions even more efficient by bundling together information and posting it on Bitcoin as a single block, as opposed to several individual statements. Others use special algorithms to encrypt and compress information into smaller transactions. These sorts of features reduce the computing power needed for multiple transactions, making the whole blockchain ecosystem more efficient.

Pros and Cons of Bitcoin Layer 2 Solutions

Bitcoin Layer 2 solutions are just one of many scaling options. Here's what you need to know about the pros and cons of Bitcoin Layer 2 designs.

Bitcoin Layer 2 networks come with the following advantages:

Bitcoin Layer 2 networks do have some potential downsides to be aware of, as follows:

As one of the earliest blockchains, Bitcoin is one of the networks that needs Layer 2s the most. The base Bitcoin chain is missing a lot of the functionality found in other systems, such as Ethereum or Solana. Many users believe that Layer 2s are one of the best ways of modernizing Bitcoin and expanding its utility. They add additional programming options and features that users need for modern web3 systems. This ensures that Bitcoin can maintain its position as the premier blockchain, instead of being ousted by other chains capable of running modern trends, such as 

The most obvious impact Bitcoin Layer 2 systems have on the main chain is their ability to handle congestion. Every time a Bitcoin Layer 2 goes online, it helps tackle some of the unnecessary transactions that Bitcoin would otherwise have to handle. This results in lower transaction fees and higher transaction speeds for everyone who still uses the main chain. Research estimates that Bitcoin Layer 2 solutions can 

To better understand what a Layer 2 has to offer the Bitcoin ecosystem, it's useful to take a look at some examples. Here are a few of the most popular current Bitcoin Layer 2 options in the blockchain ecosystem.

 is one of the most popular Bitcoin scaling solutions. It uses a method called channels to more efficiently process transactions off-chain. This strategy lets users communicate with each other through an individual connection. Each channel lets a person send as many transactions as they'd like, back and forth, with only the final results recorded on the main chain.

Lightning Network's ability to increase transaction throughput is a benefit that’s mostly utilized for payments. Therefore, security is essential. It uses 

 (HTLCs) and multi-signature transactions to help users transfer funds and process payments without running into security issues.

The design of Lightning Network has proven to be efficient, with a processing speed of around 1 million transactions per second (

), while Bitcoin only has a TPS of around 10. Furthermore, the transaction cost for users working on the Lightning Network is usually just $0.001. Especially during the Bitcoin price surge of late Feb 2024, Lightning Network's services have been extremely valuable. Since Bitcoin has recently reported over 100,000 extra transactions per day, Lightning Network's scaling solutions have saved users a lot of time and money.

, which runs on the Rootstock chain, is another popular option. Rootstock is inspired by Ethereum virtual machine (

) scaling solutions. It's a sidechain that uses a proof of work (

 to simultaneously mine both Bitcoin and Rootstock (RSK). As transactions are validated, Rootstock bundles them and sends them to Bitcoin to merge the two chains' histories.

Rootstock is only slightly faster than the main Bitcoin chain. Its bundling methods allow some scaling, but the PoW mining method still slows it down. It tends to have a TPS rate of around 20 to 300, which at times is just twice the speed of Bitcoin. The main benefit of Rootstock outside of slightly increased transaction speed is its in-depth set of smart contracts. Developers can use Rootstock and the Rootstock Infrastructure Framework for a variety of storage, payment and naming solutions. It also offers a variety of helpful integrated features, including a rollup service and a wallet for users.

The current interest in Bitcoin has led to a lot of opportunities for Rootstock. Though most people don't rely on it for fast transaction processing, Rootstock's system has attracted the attention of traders who like using DApps to handle their Bitcoin. 

Bitcoin's price spike has also been promising for Rootstock's native token, which is called Rootstock Smart Bitcoin (RBTC). When BTC prices began to climb on Feb 25, 2024, RBTC prices also took off. The coin is designed to match Bitcoin’s price one-to-one, so its price always mirrors that of BTC. For those who help to maintain Rootstock’s network security by mining RBTC, this price spike has been quite favorable.

Liquid Network is a Bitcoin sidechain. It operates in parallel with Bitcoin and aims to increase scalability by sharing the computing power load with Bitcoin. Liquid’s native token, Liquid Bitcoin (L-BTC), corresponds to Bitcoin in price and helps to back the network’s transactions with reliable collateral. Users swap their Bitcoin for Liquid Bitcoin, conduct as many transactions as they desire on the sidechain and then turn it back into regular Bitcoin.

Liquid Network specializes in secure, private transactions. Unlike some other Layer 2 systems, Liquid has special protocols in place to ensure users' transactions are confidential and entirely safe. It also has smart contract capabilities with features such as trustless 

 between users. Many people choose Liquid when they're working with large amounts of crypto or a high volume of transactions.

Liquid Network's scalability has been useful for investors during Bitcoin's price spike. Its network has a TPS roughly double that of Bitcoin, but its real value is in the size of the transactions it can handle. Since it posts far more blocks per hour than Bitcoin, Liquid can handle vast sums of data. Up to 

 can be processed at a time, while Bitcoin can only handle around 450 vbytes per transaction. This makes Liquid ideal for busy times, when traders are buying and selling every few minutes to take advantage of minute price shifts, but don't want to pay pricey transaction costs.

 is a type of blockchain technology that relies on participation from community members known as Stackers, STX token holders who validate and approve blocks. The system’s proof of stake (

) system requires less computing power while still ensuring each block on the Stacks chain is valid. Stacks further scales Bitcoin by adding extra protocols to its blockchain. These smart contracts help to manage complex transactions off-chain, so less data needs to be transmitted to Bitcoin’s network.

Stacks is one of the Bitcoin Layer 2 systems that aims to mimic the design of the Ethereum blockchain, which includes the ability to design projects that wouldn't be operable on Bitcoin. People can design web3 products with ease on Stacks, and the Layer 2 then translates the more complex language into simple transactions that Bitcoin's base chain can handle.

STX's recent price movements provide a unique look at how Bitcoin's prices affect related chains. The token doesn’t match Bitcoin's price one-to-one, but it still follows the same general price patterns as Bitcoin. After sitting at around $2.50 for a year, STX soared to $3.34 when Bitcoin's prices started trending upward in February 2024.

This community-driven project aims to tackle several Bitcoin issues at once. By running an additional layer of smart contracts alongside the Bitcoin blockchain, 

 can process transactions off-chain, which speeds up the main Bitcoin chain by moving several essential types of transactions off-chain. Conflux uses a 

 that provides PoW and PoS systems to obtain a transaction processing speed of 3,000 TPS.

Conflux is one of the most versatile Bitcoin Layer 2 networks. Its system is fully EVM-integrated, so it can handle a broad range of assets. In addition to using Conflux to scale Bitcoin, you can also use it for transferring assets between chains and minting a variety of 

 and ARC-20 tokens. This makes Conflux ideal for users who want to run 

 (DeFi) projects or work with complicated smart contracts.

Since the February 2024 price surge, Conflux has been able to support a lot of DApps running on Bitcoin. People who rely on the blockchain for assistance with daily tasks, such as running a DeFi app, often struggle with crypto trends randomly bogging down transaction throughput. Companies that choose to rely on Conflux's decentralized finance services have found they can keep running smoothly, no matter how high Bitcoin's price goes.

, which means it's a blockchain that started out identical to Bitcoin and then gradually differentiated as its creators added more features. To help with scalability, Drivechain has multiple large-block sidechains. These chains process larger blocks of data, so they can handle larger transactions than the main chain can. The system also uses a type of security mechanism called a 

 escrow, which allows users to maintain token value as they move between the mainchain and the Layer 2 network.

Drivechain was created by LayerTwo Labs with the mission of improving user experience (UX) and reducing public reliance on non-Bitcoin tokens. The focus is on adding extra functionality that makes the main network more straightforward to use. Drivechain's mission also involves more experimentation: the LayerTwo Labs team believes that Bitcoin has stagnated, and wants its forks to become a testing ground for new innovations.

The Drivechain design offers several benefits for users during Bitcoins' price spike. It features payment channels that boast instant transactions without high fees. These fast transaction speeds are ideal for users who are rushing to purchase Bitcoin at the optimal moment. Furthermore, Drivechain offers some additional privacy features that are helpful for users who want to take advantage of BTC prices without compromising their identities.

Omni Layer is an open-source asset platform created by 

. It functions as a meta-layer of software that runs on top of Bitcoin. Its smart contract capabilities allow users to access a variety of DApps on Bitcoin. Omni Layer can leverage Bitcoin's security and processing power while also expanding Bitcoin's utility. One of the most unique methods it employs is altering Bitcoin transaction metadata. After processing transactions on the Omni Layer, the system takes bundles of transaction data and adds them to Bitcoin transaction metadata. This allows information to be stored on the main chain without needing to actually validate every transaction on Bitcoin’s network.

Omni Layer has many potential uses in the Bitcoin community. Originally, it was used primarily for trading and creating cryptocurrencies. Users can create 

 and then trade them with other members. Since Omni Layer is connected to Tether, its most popular coin is the USDT stablecoin. Because this Bitcoin Layer 2 has both scaling and programming capabilities, it's popular with users who want to extend Bitcoin's functionality as a tradeable coin.

 for Omni Layer. However, due to the market demand for USDT, Omni Layer has still played an important role in the Bitcoin price surge of 2024. Users can continue to redeem coins on Omni Layer until August 2024. While the network was stagnating, the impressive BTC price boost has encouraged many users to rush to Omni Layer and make sure they redeem their assets before the deadline.

Rollkit is a Layer 2 that uses a special type of scaling solution called a 

, sovereign rollups don't involve processing all transactions off-chain. Instead, Rollkit uses a blend of both the Bitcoin main chain and its own proprietary software to bundle rollups. This provides better security than some types of zero-knowledge proofs, while also ensuring that transactions are processed at a faster rate.

The Rollkit scaling solution is relatively new to Bitcoin. It was initially a Layer 2 designed for the 

 blockchain. However, its ability to take multiple transactions and bundle them into a single, compressed transaction has also attracted attention from the Bitcoin chain. Therefore, its developers decided to retrofit their technology and create a version that could leverage Bitcoin's security for processing transactions and extend Bitcoin's functionality.

Rollkit's services have attracted some attention in the wake of the Bitcoin price surge. As one of the only services offering sovereign rollups on Bitcoin’s blockchain, Rollkit is uniquely positioned to help developers. People looking for a faster and more efficient way of designing DApps may turn to Rollkit as the solution to their problem.

The Dovi Layer 2 network relies on the EVM for scaling, using the flexible design and smart contract capabilities of Ethereum to process Bitcoin transactions while lowering transaction costs. Dovi incorporates 

 to further improve security. These multi-signature authentications are ideal for confirming transactions in an efficient manner. Moreover, by optimizing block space, Dovi can process transactions more efficiently and speed up transaction processing times.

While Dovi does make the Bitcoin transaction process more efficient, its main aim is to improve the network's capabilities. Dovi contains a variety of flexible smart contracts that developers can use to create projects. It supports cross-chain communications and has an interoperable design that lets it run on multiple systems. This allows people to explore all of Bitcoin's classic services while also using more modern blockchain functionalities.

Dovi is still a fairly new Layer 2, so it hasn't had many chances to show what it can do yet. However, the recent pump in BTC prices has greatly motivated the Dovi community. Even though this Layer 2 hasn't assisted with many transactions during the price surge, its value has gone up a lot. Interest in BTC resulted in positive attention that gave the project's native token a chance to grow. DOVI tokens that were retailing for around $0.40 in mid-February are now worth around $0.60 as of early March 2024.

Many crypto enthusiasts believe that the 

 is increased programmability and functionality. There is a real need for Layer 2s that address Bitcoin's unique design instead of simply copying the scaling Layer 2s found on Ethereum. By offering more smart contract capabilities and programming options, Layer 2s could potentially allow developers to build more projects on Bitcoin. Potentially, the new Bitcoin Layer 2 explosion could help Bitcoin move beyond investing and payment processing and begin to focus on software and games instead.

Layer 2s on Bitcoin are also likely to lead to more integration with other projects in the future. 

 is a major focus for the web3 community right now, and the right Bitcoin Layer 2 project could make the network much more compatible with other systems. Not only can they work with web3 games, social media and exchanges, but Layer 2s can also make it easier to integrate Bitcoin into traditional financial systems. These implications could provide even more positive benefits beyond the scaling that Layer 2 systems currently provide.

Another trend to watch for in Bitcoin Layer 2 networks is a focus on user experience. Many developers are currently working on ways to make blockchain networks more accessible to the average user. Existing blockchains can feel overwhelming or confusing to people who aren't technologically proficient, but Layer 2s can help. By adding a cleanly designed user interface on top of the main Bitcoin chain, these technologies make it more straightforward to transfer funds or make payments. The most successful Layer 2s in the future may be the ones that do a good job of enhancing user experiences.

Ultimately, Bitcoin Layer 2 networks are an essential part of modern web3 development. If Bitcoin wants to maintain its position as one of the leading blockchain networks, it needs a way to process transactions quickly and affordably. Fortunately, many developers have decided to tackle Bitcoin's scaling challenge, so there are a lot of different Bitcoin Layer 2s for people to choose from when they want to reduce transaction fees and extend Bitcoin's functionality.

The Best Bitcoin Layer 2 Projects Fueling Bitcoin's Growth

Compete for 2,500 USDT Every Week

The Best Bitcoin Layer 2 Projects Fueling Bitcoin's Growth

Grab Up to 5,000 USDT in Rewards

Compete for 2,500 USDT Every Week

Grab Up to 5,000 USDT in Rewards