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Why Do We Need Bitcoin L2s?

Why Do We Need Bitcoin L2s?

The BlockThe Block2025/09/14 16:00
By:By Sponsored
Why Do We Need Bitcoin L2s? image 0

With bitcoin the asset smashing all-time highs every month, and its parent the Bitcoin network regarded by experts as the undisputed leader in blockchain security, it’s fair to ask: does Bitcoin need any help? 

And diving even deeper: If the Bitcoin network is the pinnacle, why do we need Bitcoin L2s? 

Layer 2 Networks: The Answer to Dwindling Miner Rewards

The biggest appeal of the Bitcoin mainnet is its security. But that security assumption depends largely on the economic incentive that Bitcoin miners get. 

With Bitcoin halving events making mining rewards increasingly scarce, those incentives are at risk, with miners now only able to earn a sliver of transaction revenue. 

That means the underlying security and health of the Bitcoin network depends on finding additional sources of rewards – such as rewards based on transaction fees, as seen on GOAT Network. 

Generally speaking, the more transactions that happen on Layer 2, the more finality will be needed on the Bitcoin network…and miners will in turn benefit from all of those transactions. So a healthy and prosperous L2 ecosystem will bring in more transactions, and more revenue streams to incentivize security mechanisms. 

That makes healthy and prosperous Layer 2 networks a must-have for the Bitcoin ecosystem.

Layer 2 Networks: The Key to Off-Chain Computations 

Though it’s known as the gold standard for blockchain security, the Bitcoin network still has a lot of limitations. Most notably, it lacks the programmability of other blockchains, like Ethereum. 

That means complex computations, such as the kind you would need to run robust decentralized finance (DeFi) apps, need to happen off-chain.

In the blockchain network, off-chain computations typically happen on Layer 2 networks. A Layer 2 network processes transactions for the Layer 1 parent chain, enabling faster and cheaper finality, with the Layer 1 network only needed for final verification and ledger recording.

Five years ago, networks known as side chains helped the Ethereum parent chain process transactions faster and cheaper than possible on Layer 1. But it wasn’t until Optimistic Rollup technology emerged that protocols could imbue that tech into their native bridge, and thus become true Layer 2 networks that inherited native Ethereum security.

The Bitcoin ecosystem today finds itself in the same situation as Ethereum was in five years ago, with numerous projects claiming to be Layer 2s, but none of them yet at the point of development to justifiably make that claim.

Bitcoin, ZK Proofs, and Native Bitcoin Security 

If you want to offload computations from the Bitcoin network to an off-chain environment, the fastest, most efficient approach is to use zero-knowledge proofs. 

Unfortunately, the development of zk proofs within the Bitcoin ecosystem has been fraught with challenges, as zero-knowledge technology in new sandboxes (such as within the Bitcoinsphere) can be bandwidth-intensive, and thus slow and clunky.

That’s where GOAT Network comes in. 

GOAT Network is a Bitcoin zk Rollup that boasts one of the fastest zero-knowledge virtual machines in the industry. GOAT uses real-time zk proving , so that the same complex computations that can overwhelm Bitcoin mainnet happen in seconds on GOAT.

With that said, introducing off-chain computations raises security questions. If transactions occur off-chain, how can we be sure those transactions still benefit from native Bitcoin security, thus ensuring the security of your assets?

GOAT Network is building BitVM2 , an advanced form of technology that enables zk proofs to be verified and finalized on Bitcoin mainnet. If any disputes happen, Bitcoin miners can decide if that block or that transaction is valid or not. 

In short, once a Bitcoin ecosystem chain imbues its native bridge with BitVM2 tech, it earns the right to be called a true Bitcoin Layer 2 network, one that can legitimately claim to inherit native Bitcoins security…the same way Optimistic Rollups earned the right to be called true L2s years ago.

Yield and Utility, Not Just Security

While we all want to know that our assets are secure, what many blockchain users crave the most is the ability to earn attractive yields. 

GOAT Network enables BTC holders to earn yield in BTC. It does so in two key ways. 

First, the network’s off-chain computation power enables the development of a lucrative and versatile suite of BTCFi dApps – from staking to restaking, borrowing and lending, yield and volatility markets, perpetuals trading, and more. 

Second, GOAT’s proprietary economic model enables an architecture in which transactions on the network are paid in BTC, and that BTC transaction revenue is in turn shared with both sequencer node operators and stakers. The result is a flywheel effect, in which real network activity (not opaque Ponzinomics) fuels sustainable BTC yield. These types of opportunities could soon become essential for the health of the Bitcoin network. 

Security, speed, yield opportunities – the future of Bitcoin will have all of the above. Its future depends on it.

 

"Bitcoin isn’t just about HODLing anymore."

Kevin Liu @kevinliub CEO of @GOATRollup Network, explains how Bitcoin Layer 2 tech + zero-knowledge proofs (ZKPs) could unlock real yield for BTC holders:

Native security: Layer 2 inherits Bitcoin’s security assumptions.

Sustainable… pic.twitter.com/QmXyMurysc

— The Bitcoin Economy (@21RatesHQ) September 5, 2025

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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