📱 Join Dev Workshop 🐦 Subscribe Updates

Learn BTCFi & Bitcoin Layer 2

Master Bitcoin DeFi with comprehensive guides, code examples, and resources for building on Bitcoin Layer 2 protocols

🆕 What's New in BTCFi

Solv Protocol Solana Integration Nov 24, 2025
SolvBTC now accessible on Solana - expanding Bitcoin DeFi to 14+ chains with seamless cross-chain transfers via SAL.
Move Language Guide Updated 2025 Edition
Comprehensive 2025 guide to Move programming - learn resource-oriented development for Sui, Aptos, and Movement Network.
ZK Proofs on Bitcoin Tutorial New Resource
Step-by-step guide to implementing zero-knowledge proofs on Bitcoin using Zokrates and Groth16 verification.

What is BTCFi?

BTCFi (Bitcoin Finance) transforms Bitcoin from a passive store of value into an active DeFi asset. By leveraging Layer 2 solutions, smart contracts, and cross-chain bridges, BTCFi enables Bitcoin holders to earn yields, provide liquidity, and participate in decentralized finance without selling their BTC.

Bitcoin's base layer processes only 7 transactions per second, making it too slow and expensive for complex financial applications. Layer 2 solutions process transactions off-chain and settle on Bitcoin, achieving thousands of TPS while maintaining Bitcoin's security.

Explore 11 Bitcoin Layer 2 Protocols

Learn about the leading protocols building the future of Bitcoin DeFi

All BTCFi Protocols

Comprehensive overview of Bitcoin Layer 2 and BTCFi solutions

BTCFi Learning Center

Understand Bitcoin DeFi and Layer 2 technology from basics to advanced

📘 The Ultimate Guide to Move Programming Language (2025)

Move is a specialized programming language designed for blockchain development with a focus on security and digital asset management. Unlike traditional languages, Move uses resource-oriented programming where digital assets are first-class values that cannot be copied or implicitly discarded.

Key Concepts:

  • Resources: Unique, non-duplicable assets representing digital currency or NFTs
  • Modules: Encapsulated code with functions and data structures
  • Type Safety: Strong static typing prevents entire categories of bugs
  • Bytecode Verifier: On-chain verification ensures safety properties

Move vs Solidity:

M
Move: Resource-oriented
Assets cannot be copied, safer by default, no reentrancy possible
S
Solidity: General-purpose
Flexible but requires more security expertise, manual safety checks

Move is used by blockchains worth $18+ billion combined market cap including Sui, Aptos, Supra, Movement Network, Starcoin, and 0L.

Move - Resource Model Example
// Move's resource-oriented programming
module bitcoin_staking::stake_pool {
    use sui::object::{Self, UID};
    use sui::transfer;
    
    // Resource - cannot be copied or dropped
    struct StakePosition has key {
        id: UID,
        amount: u64,
        staker: address,
    }
    
    // Only one mutable reference at a time
    public entry fun stake(
        pool: &mut StakePool,
        amount: u64,
        ctx: &mut TxContext
    ) {
        let position = StakePosition {
            id: object::new(ctx),
            amount,
            staker: tx_context::sender(ctx),
        };
        // Resource must be explicitly transferred
        transfer::transfer(position, tx_context::sender(ctx));
    }
}

🔐 Zero-Knowledge Proofs on Bitcoin: Complete Guide

What are Zero-Knowledge Proofs?
ZKPs allow you to prove a statement is true without revealing the underlying data. On Bitcoin, this enables complex computations with minimal on-chain footprint.

Types of ZK Proofs:

  • zk-SNARKs: Succinct, non-interactive, smaller proof size (~288 bytes), requires trusted setup
  • zk-STARKs: Transparent, no trusted setup, slightly larger proofs, post-quantum secure
  • Groth16: Industry standard, most efficient for Bitcoin verification
Bitcoin ZKP Workflow
1
Design Circuit
Define computation logic in Zokrates
2
Compile & Setup
Generate proving/verification keys
3
Create Proof
Calculate witness with secret input
4
Verify on Bitcoin
Deploy verifier, submit proof in transaction
Zokrates - ZK Circuit
// Prove knowledge of Bitcoin private key without revealing it
import "ecc/edwardsOnBabyJubjub" as edwards;

def main(private field priv_key, field pub_key_x, field pub_key_y) {
    // Using BabyJubjub elliptic curve
    field[2] result = edwards(priv_key);
    
    // Verify computed public key matches
    assert(result[0] == pub_key_x);
    assert(result[1] == pub_key_y);
}

// Workflow:
// 1. zokrates compile -i circuit.zok
// 2. zokrates setup
// 3. zokrates compute-witness -a 
// 4. zokrates generate-proof
// 5. zokrates export-verifier-scrypt
// 6. Deploy verifier on Bitcoin
// 7. Verify proof in transaction

⚡ BitVM and Bitcoin Smart Computation

What is BitVM?
BitVM enables complex computations on Bitcoin by splitting verification into manageable chunks using optimistic computation.

Chunking Strategy:

  • Large verification algorithms split into segments
  • Only one segment executed per Bitcoin transaction
  • Challenger can dispute results within timelock window
  • Makes Groth16 verification practical on Bitcoin

Real-world: GOAT Network zkRollup

GOAT Network uses BitVM2 with 1000x cost reduction vs previous approaches, combining zkVM for off-chain computation, BitVM for on-chain verification, and decentralized sequencers for coordination.

🚀 BTCFi Development Guide 2025: From Concept to Production

Comprehensive 8-step guide to building scalable Bitcoin DeFi protocols in 2025.

Step 1: Define Purpose & Audience

Determine if you're building lending/borrowing, staking, DEX, or derivatives. Identify your target users (retail or institutional) and key competitive advantages.

Step 2: Choose Your Layer 2

Protocol options and tradeoffs:

  • Lightning: Fast payments, limited smart contract capability
  • Stacks: Full smart contract support, Clarity language
  • Rootstock: EVM-compatible, established ecosystem
  • BOB: Hybrid L2 combining Bitcoin and Ethereum
  • GOAT: zkRollup with zero-knowledge proofs
  • Arch: Bitcoin-native with Rust

Step 3: Select Development Language

  • Clarity (Stacks): Decidable, safe by default
  • Rust (Arch): Bitcoin-native, performance-focused
  • Move (Sui, Aptos): Resource-oriented, asset-focused
  • Solidity (BOB, EVM chains): Familiar to Ethereum developers

Step 4: Design Architecture

Decide between off-chain matching engine vs on-chain settlement. Choose batch settlement intervals, custody model (custodial vs non-custodial), and whether to use multi-sig, MPC, or smart wallet abstraction.

Step 5: Develop Core Modules

Build order matching engine, liquidity pools (AMM), atomic swap/bridge layer, and market maker incentives.

Step 6: Implement Security

Get smart contract audit by reputable firm, apply formal verification where applicable, add rate limiting and circuit breaker mechanisms, and implement emergency pause functions.

Step 7: Test & Monitor

Deploy to testnet for user testing, conduct load testing for throughput, set up security monitoring with real-time dashboards, and optimize performance.

Step 8: Launch & Grow

Deploy to mainnet with TVL caps, provide community education and support, create liquidity provider incentives, and establish partnerships with other protocols.

🔗 Solv Protocol Multi-Chain Architecture

Solv is a Bitcoin reserve protocol enabling yield on BTC across 13+ blockchain networks through semi-fungible tokens and abstracted staking layers.

Key Innovation: ERC-3525 Semi-Fungible Tokens

ERC-3525 combines properties of fungible and non-fungible tokens:

Slot 1: 6% Yield
1M tokens - all fungible within this slot
Slot 2: 8% Yield
1M tokens - all fungible within this slot
Transfer Between Slots
Tokens can move between different yield strategies

Staking Abstraction Layer (SAL)

Unified interface for Bitcoin staking across chains:

  • LST Generation Service: Create SolvBTC, SolvBTC.ENA, SolvBTC.Babylon
  • Staking Validation Service: Verify Bitcoin stakes
  • Transaction Generation Service: Build transactions across chains
  • Yield Distribution Service: Distribute rewards

BTC+ Vault (4.5-5.5% yield)

  • Automated yield farming
  • Dual-layer architecture (custody ≠ execution)
  • Built-in risk segmentation
  • Shariah-compliant option available

What is BTCFi?

BTCFi (Bitcoin Finance) transforms Bitcoin from a passive store of value into an active DeFi asset. By leveraging Layer 2 solutions, smart contracts, and cross-chain bridges, BTCFi enables Bitcoin holders to earn yields, provide liquidity, and participate in decentralized finance without selling their BTC.

Why Bitcoin Needs Layer 2

Bitcoin's base layer processes only 7 transactions per second, making it too slow and expensive for complex financial applications. Layer 2 solutions process transactions off-chain and settle on Bitcoin, achieving thousands of TPS while maintaining Bitcoin's security.

1
User Transaction
User initiates transaction on Layer 2 network
2
Off-Chain Processing
Transactions processed quickly and cheaply off Bitcoin mainnet
3
Batch Settlement
Multiple transactions bundled and settled on Bitcoin
4
Bitcoin Security
Final state secured by Bitcoin's proof-of-work

How Layer 2 Solutions Work

Layer 2s take transactions off Bitcoin's main chain, process them quickly and cheaply, then batch-settle the results back to Bitcoin. This is like settling multiple trades at once instead of one by one - much faster and more efficient.

What are Zero-Knowledge Proofs?

Zero-Knowledge proofs let you prove something is true without revealing the underlying data. In BTCFi, this means validating thousands of transactions with a single small proof on Bitcoin, dramatically reducing costs and increasing speed.

How zkRollups Work

zkRollups bundle hundreds of transactions, generate a cryptographic proof that they're all valid, then post just that tiny proof to Bitcoin. Bitcoin verifies the proof without checking each transaction - like checking a sealed envelope's signature instead of reading every letter inside.

1
Collect Transactions
Bundle 1000s of transactions together
2
Generate ZK Proof
Create cryptographic proof of validity
3
Post to Bitcoin
Submit tiny proof instead of all transactions
4
Verify Proof
Bitcoin verifies proof - all transactions confirmed!

Why ZK Technology Matters for Bitcoin

ZK technology enables Bitcoin to scale to millions of users while maintaining security. It's the key to bringing complex DeFi applications to Bitcoin without compromising its fundamental properties. This means lower fees, faster transactions, and more sophisticated financial applications - all while keeping Bitcoin's security guarantees.

Developer Learning Path

🎯 Beginner: Understand the Basics

Start by learning Bitcoin fundamentals, UTXO model, and basic cryptography. Explore how transactions work and understand the limitations that Layer 2 solves.

📚 Intermediate: Learn Layer 2 Concepts

Study different Layer 2 approaches: state channels, sidechains, rollups, and validiums. Understand trade-offs between security, speed, and decentralization.

⚡ Advanced: Build on BTCFi Protocols

Choose a protocol (Arch, Stacks, GOAT, etc.) and build your first dApp. Study smart contract development, integrate SDKs, and deploy to testnet.

🚀 Expert: Contribute to Ecosystem

Build production applications, contribute to protocol development, create developer tools, and help grow the BTCFi ecosystem.

🌾 BTCFi Yield Farm 🌾

Learn BTCFi by farming protocols and earning yields

Level
1
Coins
1000
XP
0
Total Earned
0

Your Farm Slots

Plant protocols, harvest yields, and level up!

🏆 Achievements

Unlock rewards by reaching milestones

All Learning Resources

Comprehensive collection of documentation, SDKs, tutorials, and guides

📚 Technical Documentation

🛠️ SDKs & Integration Tools

📖 Tutorials & Guides