Bitcoin's Layer-2 networks show slow growth, but some projects like Merlin stand out as leaders. With significant BTC deposits, Merlin retains its leading status despite a lack of major breakthroughs in its token’s value.

The Rise of Bitcoin L2

Bitcoin L2 projects began to gain momentum in the first half of 2024. However, attention shifted to other narratives, slowing their progress. Unlike Ethereum’s L2, which grew rapidly due to rewards and airdrop promises, Bitcoin L2 is considered riskier and more expensive for retail investors.

Features of Merlin and Other L2 Projects

Merlin maintains its leadership due to its first-mover advantage, being one of the most well-funded chains by locked BTC. As of October 2023, the platform reported liquidity of around $24 million. Merlin also offers EVM compatibility and collaborates with Particle Network to integrate BTC wallets with other networks.

Current Situation and Future of Bitcoin L2

Bitcoin L2 chains face low app activity and debatable definitions. Analysts debate whether Lightning Network counts as L2. Despite this, projects continue to evolve and attract funds, as seen with Babylon Labs aiming to provide non-custodial staking solutions.

Bitcoin L2 networks continue to advance and attract new users, remaining a focal point for analysts and investors. Despite the challenges, projects are making significant strides in advancing their technologies and services.