The Bitcoin Scaling Boom: 5 Bitcoin Upgrade Projects Without Changing Its Code.
A surge of development in Bitcoin is occurring without the need for a blockchain fork. Here are a few examples.
The so-called “Bitcoin Renaissance” has given rise to NFTs, token standards, staking, and dozens of new scaling solutions and “Layer 2” developments built on the oldest and most popular blockchain. Indeed, while Bitcoin’s recent price has been volatile, developers say the biggest stories of this network are unfolding under the surface—and the next few months may be the most exciting time yet.
Here’s a look at five projects redefining what’s possible on Bitcoin:
- BitcoinOS
BitcoinOS claims to be the first project to validate zero-knowledge proofs on Bitcoin as of July. Last week, the team released a manifesto stating they’ve unlocked the “ultimate upgrade for Bitcoin” without requiring “any consensus change in Bitcoin Core.”
The BitcoinOS website states, “The goal of BitcoinOS is to be the last platform you need in the blockchain space. By enabling Bitcoin to do anything, we are creating a future where the most trusted and valuable blockchain becomes the foundation for all decentralized innovation.”
In early January, BitcoinOS and similar projects celebrated the possibility of “aggregation” on Bitcoin—a powerful Layer 2 scalability solution that has become very popular in the Ethereum ecosystem.
BitcoinOS claims to have validated the first zero-knowledge proof on the Bitcoin Mainnet.
Bitcoin may have just crossed a revolutionary technical milestone this week—one developer claims it allows the network to upgrade without needing to fork its code. Developers at BitcoinOS assert they have successfully validated a zero-knowledge proof (ZKP) on the Bitcoin mainnet for the first time in history. According to Decrypt, this was accomplished during a series of on-chain transactions on Tuesday, with the final confirmation occurring in Bitcoin block 853626. The team also showcased this achievement in front of a large audience.
BitcoinOS, using its unique BitSNARK technology, states that true aggregation on Bitcoin is now possible, offering one of the best solutions for the trilemma of scalability, security, and expressiveness of Bitcoin.
In an interview with Decrypt, the team explained that BitcoinOS is neither a “layer 2” nor a “rollup.” Instead, it serves as an infrastructure layer where numerous rollups with varying functionalities can be created while inheriting Bitcoin’s security and decentralization.
The platform integrates liquidity and user bases across all its rollups into a cohesive user experience, akin to a single chain: a fully unleashed Bitcoin.
Their website states: “Our goal is to unify the fragmented blockchain world and drive the next wave of adoption and development.”
2. Brollups
In mid-June, developer Burak Kecli proposed a native Bitcoin alternative called “Brollups.” Unlike BitcoinOS, Brollups does not utilize zero-knowledge technology. While BitcoinOS and other optimistic aggregation systems have minimal trust assumptions regarding bridging Bitcoin, Kecli claims that his rollup design is genuinely “trustless.”
Kecli told Decrypt, “Brollup enables unilateral exits, meaning you can settle your coins without needing permission, unlike BitVM-based rollups, where you have to ask for them.”
To create this trustless bridge, Brollups uses pre-signed transactions, allowing users to deposit their unspent transaction outputs (UTXOs) in exchange for virtual transaction outputs (VTXOs). In the Brollup system, VTXOs can be exchanged for contact data that executes a payable condition in a smart contract. In other words, Brollups can enable smart contracts on Bitcoin that, according to the documentation, “cover over 90% of DeFi use cases”—including selling NFTs for Bitcoin or placing token sell orders on a DEX.
Brollups is an extension of the Ark protocol, initially designed to address some of the UX issues of the Bitcoin Lightning network. However, Ark still has limitations, including specific trust assumptions and liquidity issues surrounding Ark service providers (ASPs).
In July, Kecli argued, “Validating [zero-knowledge proofs] on Bitcoin means nothing unless users can exit.” He added, “If a unilateral exit path is not available, it’s not layer 2.”
3. Bitcoin Fractal
Fractal is a Bitcoin sidechain focused solely on scaling Bitcoin transactions. Its model is distinctive as its code aims to mimic Bitcoin’s base layer as closely as possible, making it familiar for native Bitcoin developers.
The website states: “Fractal enables plug-and-play continuity. Its recursive scaling of the Bitcoin core code, without any external structure, allows for native support of existing infrastructure, such as wallets.
What is Fractal? Everything You Need to Know About the Buzzy Bitcoin Scaler.
A hotly anticipated scalable Bitcoin network launched this week, although its code is nearly indistinguishable from the Bitcoin Layer 1 blockchain. What’s going on? On Sunday, Fractal Bitcoin announced the mainnet launch of its Bitcoin sidechain network. As a tribute, Fractal embedded the same message in its genesis block that was encoded in the first Bitcoin block regarding bank bailouts, attributed to the pseudonymous creator Satoshi Nakamoto. Despite a rocky start with some block mining issues,
the team claims that all Fractal transactions and hashes can be traced back to their source on the Bitcoin blockchain itself. Fractals can be built upon other fractals, scaling Bitcoin by a factor of 20 with each layer, and all transactions revert back to Bitcoin L1.
This system is secured through a combination of merged mining with Bitcoin L1 and native Fractal mining. It also supports Ordinals and BRC-20 tokens (like Bitcoin itself) and proudly lists UniSat, the BRC-20 marketplace, as one of its key contributors.
However, unlike the main Bitcoin chain, Fractal has reintroduced OP_CAT into its implementation, enabling smart contracts. Lorenzo, founder of UniSat, stated last month, “This is our initial step towards offering advanced programming on Bitcoin within Fractal.”
- Babylon
Babylon is introducing staking—the most popular DeFi application on altcoin chains—to Bitcoin.
Babylon Labs has already launched Phase 1 of its staking mainnet, allowing Bitcoin holders to lock up their coins on the base layer for staking readiness. Soon, these coins will be used to secure multiple proof-of-stake networks simultaneously, earning yields for stakers from each of these networks.
Babylon explained to Decrypt, “There’s no wrapping or bridging involved, which means staking Bitcoin requires no trust in intermediaries, IOUs, or any specific Layer 2 chains. The Babylon Bitcoin Staking Protocol enables proof-of-stake systems to introduce Bitcoin as a staking asset through its modular design and diminishing functionality, providing greater security than what native tokens can offer.
Babylon says native Bitcoin staking is coming to Bitcoin Layer 2 networks.
The deployment of Bitcoin is rapidly becoming a reality—an operation once exclusive to proof-of-stake networks. Thanks to Babylon, HODLers can lock their BTC, which will soon be used to secure and earn yields from multiple stake-based blockchains simultaneously. While this has significant implications for the entire crypto economy, its effects may be acutely felt in a nascent ecosystem: Bitcoin Layer 2 networks.In a recent interview, David Tse, co-founder of Babylon, stated that altcoins can economically secure their systems with Bitcoin without needing to enhance their native assets. He also highlighted Bitcoin L2 as a primary source of demand for Babylon’s services.
He explained, “Sharing Bitcoin becomes a mechanism by which L2s can receive security from Bitcoin. They want liquidity from Bitcoin, [and] they want security from the most secure chain in the world.”
With Bitcoin staking on the horizon, several projects, like the Zest protocol based on Stacks, are already enabling liquid staking on Bitcoin so savers can earn yields while retaining the freedom to transact with Bitcoin.
5. Nubit
Nubit will serve as a background service that secures several Bitcoin L2s.
The blockchain will be a “data availability” (DA) layer secured through Bitcoin staking and powered by the aforementioned Babylon protocol, which regularly sends security checkpoints back to Bitcoin L1. This chain will be optimized to store large amounts of data from both the Web2 and Web3 worlds while inheriting security similar to Bitcoin itself.
Yu Feng, one of the founders of Nubit, wrote earlier this month, “Nubit DA uses Bitcoin to provide reliable and scalable data across all chains in the ecosystem. Data availability ensures that all transactions of a blockchain are honestly stored and proposed on a network, and the state of the chain can be retrieved at any time.”
Researchers have found that for many Bitcoin rollup projects linking their transactions to Bitcoin, using Bitcoin L1 for DA is prohibitively expensive. This is why most are looking to utilize optimized DA layers that inherit Bitcoin’s security.
Feng wrote, “We offer an ecosystem solution that not only simplifies the transition from Web2 to Web3 but also fosters an open and collaborative environment where everyone can participate and earn rewards through the Nubit network.
