Bitcoin Virtual Machine: One L2 Metaprotocol to Power Them All

Bitcoin has only just woken up to the utility of Layer 2 protocols, with the 2023 launch of the Ordinals technology opening the way for Bitcoin NFTs. Since then, many developers and teams have gotten passionate about building L2s to expand Bitcoin adoption and scale transactions while maintaining Bitcoin’s famed security.

Many experts have pronounced 2024 the year of Bitcoin L2s due to the immense amount of traction seen over the past months. Bitcoin may have finally entered a new era. In any case, a pertinent question is, what if there was a way to scale the building of Bitcoin L2s themselves?

Bitcoin Virtual Machine, an ambitious project announced in February 2024, might have an answer: a meta protocol fit with all the tools developers need to build their own Bitcoin L2s. This must sound familiar, given the popularity of the Ethereum Virtual Machine.

In this article, we’ll explore how BVM works and the particular challenges it is solving in the Bitcoin ecosystem.

Bitcoin L2 as a Service

For any developers looking to build or scale their own Bitcoin Layer 2, BVM provides all the infrastructure and tools they need. In simple terms, all a developer needs to do is select their required modules and set the specifications to get their Layer 2 up and running. A Bitcoin L2 requires interactions between different kinds of modules, including roll-up, data availability, and cross-chain bridge protocols, among others. Bitcoin makes various tools available, and developers or teams simply have to pull together all they want.

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Here are some of the modules available via BVM:

• AI modules: Tensors, CNN, DENSE, LSTM, Transformers
• Data modules: Ordinals, Polygon, Celestia, Eigen, NearDA, Avail
• Execution modules: Optimism, Polygon, ZKSync ZKVM, Arbitrum, Starknet
• Rollup modules: Optimism, Sovereign, Rollkit
• Cross-chain Bridge modules: BRC-20, Ethereum, Solana
• Settlement modules: Bitcoin
• dApp modules: Uniswap, GMX, Compound

The process of launching their Bitcoin L2 is very straightforward. First, the developer selects their preferred network. Bitcoin Testnet comes with a free trial, but launching on the mainnet requires 350 BVM for setup and a monthly charge of 1750 BVM. Afterwards, they select their rollup, Bitcoin validity, and data availability protocols. They also set the block time (between 2 and 10 seconds), minimum gas price, block gas limit, and withdrawal period. Bitcoin L2 creators also get to use their custom native token to pay transaction gas; otherwise, they can always use BVM.

Ultimately, BVM aims to expand support to allow developers to select pre-installed dApps before launching their L2 projects.

Bitcoin Virtual Machine: Ethereum VM-Equivalent

The Bitcoin Virtual Machine was created with support for Solidity smart contracts from the get-go. This means Ethereum developers can easily build all kinds of dApps on Bitcoin and even migrate existing dApps from Ethereum to Bitcoin with little to no friction. Of course, Bitcoin remains the data layer for transaction-level consensus, which enhances security.

BVM uses a version of the Optimism codebase, modified to add support for Bitcoin, and while the Optimism team is working to enhance their system, the BVM team aims to add their new process to the Bitcoin L2 once it is completed.

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Success Stories

One of the strengths of BVM is that it has so many use cases, which have brought about success stories in various fields, including DeFi, GameFi, SocialFi, Education, and even AI. Of course, all these works on Bitcoin and successful projects demonstrate how Bitcoin’s utility can be expanded just like Ethereum’s and perhaps even greater.

• Bitcoin Arcade: Bitcoin Arcade uses Optimistic Rollup with Bitcoin and Polygon as its data validity and availability modules, respectively. Though still in testnet, Bitcoin Arcade has recorded nearly 200,000 games played and almost 5 million transactions so far.
• Naka: Naka launched back in January as a Bitcoin L2 focused on DeFi. It has so far recorded almost $11 million in transaction volume and is, in fact, the fastest and cheapest way to buy BVM.
• Alpha: Alpha, a SocialFi Bitcoin L2, is one of the earliest adopters of BVM, having launched in June 2023. It has raised thousands of dollars for charity.
• Modular: an education project launched on Bitcoin to teach users about modular blockchain using a fun Lego game.

In addition to these, BVM can also support lending protocols, NFTFi projects, infrastructure tools, and other kinds of Bitcoin L2 applications.

BVM and AI

One of BVM’s key promises is bringing decentralized AI modules to the Bitcoin L2 experience by providing infrastructure and tools for deploying neural network models. The idea is to use an ERC-721 smart contract to oversee the ownership of the models stored on the blockchain. Some layers being supported include Dense, Rescale, CONV, and LSTM, with more in the works, including support for transformers. It comes with an AI contracts feature that enables developers to code neural networks in Solidity and directly embed AI models into their dApps.

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Already, Eternal AI is a Bitcoin L2 launched via BVM and allows, among other features, users to build AI models tokenized as NFTs and enable AI trading. It is built upon the Optimism roll-up protocol with Bitcoin as the data validity layer.

$BVM and $SHARD Tokenomics

$BVM is the native cryptocurrency of the BVM ecosystem, while $SHARD is the governance token. By staking $BVM, users can mine $SHARD and participate in making decisions to steer the direction of the ecosystem alongside other holders. The BVM DAO Treasury holds 50 million BVM (worth approximately $270 million).

Holding $BVM and $SHARD gives participants access to airdrops run by different Bitcoin L2s, including the 50 million airdrop program planned by Eternal AI ($EAI), as well as exclusive access to crypto deals and launchpad projects.

In terms of tokenomics, 50% of the total $BVM supply will be going to the BVM community, with 10% reserved for liquidity purposes. At the same time, core team members and developers, as well as advisors and partners, will get 25%. 15% of BVM available has been fully released in the recently launched public sale to encourage early backers. 833k of the community tokens have been released, and the same amount will be released monthly. Team release and advisors' release will commence in April 2025 and October 2024, respectively.

Conclusion: BVM’s Upcoming Goals

In line with its roadmap, BVM already had a public sale in February after spending a year testing the protocol and infrastructure. It also had a TGE event in March to allow investors to claim BVM tokens and get the tokens listed on various exchanges. Exchanges currently supported include Naka, Uniswap (Ethereum), Uniswap (Arbitrum), OKX Web3, Unisat, Gate.io, MEXC, and Bitmart.

The upcoming agenda on its roadmap is to introduce BVM staking and offer staking rewards to participants. This will lead to a ramp-up in adoption ahead of the launch of the modular store in June 2024, which will also open access to developers to deploy pre-installed dApps for their own Bitcoin L2s.