Bitlayer: Bitcoin L2 with ZK proof system, BTC staking, EVM
compatibility. Early BTCFi entrant (2024); TVL down ~99.9%
from peak as of September 2026.
USE WHEN: evaluating Bitlayer for deployment, BTC staking products.
Installs into .claude/skills of the current project.
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---
name: bitcoin-l2-bitlayer
description: |
Bitlayer: Bitcoin L2 with ZK proof system, BTC staking, EVM
compatibility. Early BTCFi entrant (2024); TVL down ~99.9%
from peak as of September 2026.
USE WHEN: evaluating Bitlayer for deployment, BTC staking products.
allowed-tools: Read, Grep, Glob
---
# Bitlayer
Bitcoin L2 with focus on **BTC staking** for yield, plus EVM
smart contracts.
## Architecture
- **ZK rollup** with state commitments to Bitcoin.
- **EVM compatibility** for Solidity contracts.
- **BTC staking** — bridged BTC earns yield via Bitlayer's protocols.
- **Federation peg** (planned BitVM upgrade).
## Position
Among the "BTCFi" Bitcoin L2s competing on yield products, but the
TVL has collapsed. DefiLlama chain TVL peaked at ~$406.9M on
17 December 2024, was ~$361.2M on 1 January 2025, ~$2.98M on
1 January 2026 and ~$463k on 16 September 2026 — a ~99.9% drawdown
from peak. The contraction is sector-wide rather than
Bitlayer-specific (Merlin and BSquared fell on the same curve), but
size any deployment against the current figure, not the 2024
headline numbers.
## Use cases
- **BTC staking** for yield.
- **DeFi protocols** (lending, AMMs).
- **Bridge integrations** to Ethereum L2s.
## Limitations
- **Federation trust** until BitVM bridge.
- **Yield sources** sometimes unclear / require careful audit.
## See also
- [bsquared/SKILL.md](../bsquared/SKILL.md)
- [merlin/SKILL.md](../merlin/SKILL.md)
- [babylon/SKILL.md](../babylon/SKILL.md)
- [citrea/SKILL.md](../citrea/SKILL.md)