Layer-2 protocols built on the Bitcoin blockchain are rapidly emerging, drawing inspiration from innovations within the Ethereum ecosystem.

Since its mainnet launch, Bitlayer has successfully locked $409 million in value, primarily attracting institutional clients seeking higher yields.

Co-founded by Charlie Hu, Bitlayer recently secured $11 million in Series A funding, focusing on scalable Bitcoin transactions.

During the Bitcoin 2024 conference in Nashville, Marathon's product lead, Julian Duran, emphasized the significance of cross-border payments as a key use case for blockchain technology.

Duran highlighted that traditional overseas money transfers in emerging markets incur costs between 8% to 10% and take 3 to 4 days to settle, whereas Bitcoin transactions typically settle in under 10 minutes.

Marathon Digital is actively seeking partnerships with blockchain developers to create Bitcoin Layer-2 solutions specifically for cross-border payments.

Despite the significant value locked in, Bitcoin layer-2 solutions are still in early development and face challenges related to security and user experience.

A dedicated layer for NFT transactions is being considered to alleviate network congestion, which was notably increased by the rise of the Ordinals protocol.

Recent research proposes a new cross-chain secure transmission technique that integrates the Trusted Platform Module (TPM) and the SM algorithm to enhance security in cross-chain communications.

Layer-2 solutions must address security complexities, as demonstrated by vulnerabilities encountered in Ethereum's layer-2 protocols.

Duran noted that developers might find a more favorable regulatory environment in emerging markets, which tend to approve new payment systems more quickly and at lower costs.