How BTC Layer2 Co-managed MPC Custody Solution of SINOHOPE Protects Trillion dollars of Bitcoin Ecosystem
2024, the year of BTC Layer2
The rise of the Bitcoin Inscriptions in 2023 has focused the attention of the market and capital on the Bitcoin ecosystem, and at the same time exposed the serious lack of Bitcoin scalability.
First of all, the successful experience of Ethereum’s Layer 2 scalability has pointed out the direction for developers. Secondly, the underlying public chain carrying assets and applications can seize the first-mover advantage and has a high enough ceiling. With the dual support of technology and market, Layer 2 scalability has reached the forefront of Bitcoin ecological scalability.
In February this year, “Bitcoin Magazine” listed standards for Bitcoin Layer 2, which mainly include the following three points:
1. Use Bitcoin as a native asset.
2. Use Bitcoin as a settlement mechanism to enforce transactions: L2 users must be able to return control of their assets at L1.
3. Demonstrate functional dependence on Bitcoin: If the Bitcoin network fails but the related system can still keep running, the system is not Bitcoin’s L2.
According to incomplete statistics, there have been more than 70 BTC Layer2 projects officially announced in Q1 of 2024, and at least 10 projects have been officially launched.
BTC L2: 10x speed, 100x ceiling
In February this year, the mainnet of Merlin Chain was launched, and its TVL reached an astonishing US$3.5 billion within 30 days of its launch, attracting more than 200 projects to build on it. The explosive growth of Merlin Chain has kicked off this round of BTC Layer 2 ecological transition. Next, the successive releases of B², BounceBit, and Bitlayer also caused varying degrees of splash in the Bitcoin ecosystem.
In terms of data performance, the overall market value of Ethereum in Q1 this year is estimated to be US$424.75 billion, while the market value of the Bitcoin ecosystem has reached US$1.36 trillion as the price of Bitcoin continues to rise, which is three times the ecological market value of Ethereum. Let’s look at the performance of Ethereum L2 and Bitcoin L2 TVL. This year’s Q1 BTC Layer2 TVL achieved a growth of 155%, overtaking the Ethereum ecosystem for the first time. With the rapid implementation of more BTC Layer2 projects, it can be expected that Q2 BTC Layer2 TVL will achieve faster growth.
The above data comparison shows that BTC Layer2 has completed the 2–3 years of iteration of the Ethereum ecosystem in one quarter.
While growing rapidly, BTC L2 faces multiple challenges
While BTC L2 is developing rapidly, Bitcoin’s L1 assets are migrating to L2. In order to attract users and promote asset mapping, Layer2 projects have started pledging layer-1 assets. As of April 1, 2024, more than US$5 billion in assets have been staked to Bitcoin L1. As more projects are officially released, it is expected that the staking assets will reach more than 10 billion US dollars in Q2.
As data grows, the security and management of crypto assets are becoming challenges that every BTC L2 has to face.
During the communication and research with the BTC L2 project, SINOHOPE sorted out three major challenges of the BTC L2 project at the asset management level:
Firstly, the staking assets and the assets on cross-chain bridges are over-centralized, which naturally brings high security risks. At the same time, the process of staking and claiming is very complicated, which brings various threats to security prevention and control;
Secondly, the technical challenges of self-developed custody solutions are very high, with high research and development costs and long implementation cycles; among the highly competitive BTC L2 solutions, the excessive time cost is unacceptable to the market and users;
Finally, business upgrades are difficult; the interconnection of the BTC ecosystem has introduced a variety of compatibility issues to be solved, such as multi-chain compatibility, multi-level business process compatibility, and multi-protocol custody wallet compatibility. These have brought difficulties to the BTC L2 projects in system upgrade iteration.
How SINOHOPE empowers the BTC L2 solutions
Facing the triple challenge of BTC L2 solutions, SINOHOPE(Stock Code: 1611.HK) proposed BTC Layer2 Co-managed MPC Custody Solution.
The goal of SINOHOPE is to provide all-in-one custody services for Layer2 projects, which can not only custody bitcoin network assets, but also other main EVM and non-EVM public chain assets. SINOHOPE supports not only the custody of bridge assets, but also the custody of assets within the L2 ecosystem. Moreover, all of these assets are managed by SINOHOPE’s most advanced MPC multi-signature solution, and have their own business risk control system, KYT/AML audit, and multi-disaster recovery to ensure asset security from multiple dimensions.
Security enhancement
SINOHOPE’s MPC custody solution enhances asset security from three core levels: zero-trust architecture, full life cycle and full business process.
- Zero-trust architecture, only the customer has the sole control of the root key and root authority, and no one can execute any signature logic without customer participation;
- The full life cycle not only manages the generation of secret keys, but also covers the entire process of distribution, derivation, use and disaster recovery of secret keys;
- The full business process covers all aspects of custody, binding, authorization, revocation, authentication, approval, recovery, and export.
Fast access through WaaS
In order to help the BTC L2 projects seize the time window, SINOHOPE relies on mature WaaS services to provide 2-week fast access services.
Through the full set of WaaS API and SDK provided by SINOHOPE MPC custody, the BTC L2 project can complete the access of bridge custodying services within 2 weeks, while creating addresses in batches, initiating transactions in batches, flexibly configuring security policies and flexibly deploying MPC nodes, truly works out of the box.
Continue to expand the BTC ecosystem
SINOHOPE MPC custody solution is the first custodian in the industry to support MPC native multi-signature of BTC ecological assets such as BRC20.
It is different from some custodial products that fall back to centralized management when supporting BRC20 assets; SINOHOPE MPC hosting is the solution for MPC Native. At present, SINOHOPE MPC custody supports more than 100 protocols and 500 tokens; With the BTC L2 main network coming online, the new BTC L2 network can be connected within 1 week, which has very strong scalability.
SINOHOPE BTC Layer2 co-management MPC custody solution has high security, fast access, and very good asset and protocol scalability.
Advantages of SINOHOPE
In addition to helping the BTC L2 projects solve business problems, SINOHOPE is more concerned with faster and more stable growth with customers. Join hands with SINOHOPE, you will gain the following three advantages:
Technological advantage
The team of SINOHOPE comes from the world’s three major crypto asset exchanges, has accumulated more than 10 years of experience in the developing of custody wallets, and has managed more than 10 billion dollars of crypto assets; Especially in MPC custodying, SINOHOPE innovated 8 core technology innovations, and successively published two MPC technology research papers in IEEE Xplore, one of the world’s three major literature databases, which also side certified the professionalism and advanced nature of SINOHOPE custodying technology.
Ecological advantage
As the first Web3 stock in Hong Kong,SINOHOPE has empowered ecological partners for a long time and formed a strong Web3 ecosystem. At the capital level, the starpups using SINOHOPE MPC custody products can apply for $50 million BTC L2 TVL pool funded by SINOHOPE and ABCDE, and a single project can apply for $5 million to $10 million.
At the security level,SINOHOPE and the industry’s top security companies SlowMist and Certik are long-term partners to jointly protect ecological security. At the market level, we help partners in terms of developer ecology and community support.
Price advantage
SINOHOPE is committed to the large-scale popularization of MPC technology. We have launched a price package that is 1/10 of that of traditional MPC custody companies. We hope to create more win-win opportunities with more L2 projects.
Serve customers
SINOHOPE has successively reached strategic cooperation with Merlin Chain, B² Network, Bitlayer and other projects in the bitcoin ecosystem, and in the future, SINOHOPE will reach ecological and strategic cooperation with more projects in the bitcoin ecosystem.
More BTC L2 projects are welcome to join SINOHOPE’s bitcoin ecosystem, jointly safeguard asset safety, and accelerate the construction of BTC layer 2 ecosystem.
🌍 Company Website：www.sinohope.com
📮 Investor Inquiry：ir@sinohope.com
📮 Media Inquiry：pr@sinohope.com
