Build on Bitcoin (BOB): A Hybrid Layer-2 Network Revolutionizing Bitcoin's Involvement in DeFi

Build on Bitcoin (BOB) is a hybrid layer-2 network that brings out the best of Ethereum and Bitcoin blockchains. Combining Bitcoin's security with Ethereum's liquidity and flexible smart contracts, BOB finally brings meaningful use to the Bitcoin network aside from just hedging against inflation.

Build on Bitcoin (BOB) is a project that aims to bring DeFi and other advanced use cases to the Bitcoin network. It does this by creating a hybrid Layer-2 (L2) network that combines the security of Bitcoin with the liquidity and smart contract capabilities of Ethereum.

Here's a simplified overview of how BOB works:

It begins with a Rollup Layer, where BOB is built on the Optimism OP Stack, which is a modular framework for creating L2 networks. This technology is also used to build the Optimism Mainnet and is compatible with some of the advancements planned for BOB.

At its core, BOB utilizes the Ethereum Virtual Machine (EVM) as the engine that powers the entire network. This allows BOB to be compatible with some of the most popular dApps and protocols on Ethereum, without the need to create new technologies.

Since most applications on Bitcoin are written in Rust programming language, BOB developers had to find software that could execute Rust code. RISC Zero zero-knowledge virtual machine (zkVM), is an experimental software that lets you prove the correct execution of arbitrary Rust code.

The BOB team leveraged this tool to allow builders to zero-knowledge applications that leverage existing Bitcoin Rust packages.

With the help of the Rust zkVM, BOB builders can create new Bitcoin-Ethereum bridges or integrate existing ones.

Through a BTC light client, BOB has access to Bitcoin block and transactional data which smart contracts on Ethereum can process Bitcoin transactions such as Ordinal auctions, and BTC DEX swaps.

BOB also has access to wrapped Bitcoin (wBTC) and threshold Bitcoin (tBTC), allowing smooth bridging of Bitcoin-based assets.

Finally, the stack that everyone sees – the BOB Software Development Kit (SDK) provides a powerful platform where builders can access tools to build on Bitcoin.

The launch of BOB's L2 protocol is only in its first phase. There are three more phases BOB will go through before completion.

In phase 1 of the launch, BOB developers were bootstrapping the network as an Optimistic Rollup on the EVM using the OP stack. This phase is already complete.

In phase 2, Bitcoin Proof of Work (PoW) will be introduced to the BOB Ethereum rollup version. This will be possible through the new merged mining, a way of mining multiple cryptocurrencies through something called Auxiliary Proof of Work (AuxPoW). This phase will introduce Bitcoin’s security into the mix.

Phase 3 will bring Bitcoin as a settlement layer to BOB. Currently, Ethereum is the settlement layer as BOB is built on OP Stack which uses the EVM. The BOB team is looking to use the Bitcoin Virtual Machine (BitVM) for Bitcoin settlement & on-chain fraud proof.

Finally, phase 4 of the launch will see the deployment of zk-Rollups directly on Bitcoin. However, this development is overly dependent on whether Bitcoin will be improved with the necessary opcodes. Should this come to pass, BOB itself can be proven in the zkVM and verified by Bitcoin consensus.

Even though phase 4 is in the roadmap, BOB developers think it is “very unlikely that Bitcoin will support a ZK verifier in the near future.”

The BOB project offers a myriad of benefits for those who will use it. Some of the most significant ones include:

Bitcoin Defi Summer is Coming

The launch of BOB comes at a time when there is an emergence of new Bitcoin layer-2 protocols such as Babylon Chain and SatoshiVM, among others. The launch of such networks on Bitcoin will not only usher in Bitcoin defi summer but will give Bitcoin the credibility it needs to remain the number one cryptocurrency in the blockchain space.

The launch of Build on Bitcoin (BOB) is a significant development in the world of cryptocurrencies. It has the potential to open up new possibilities for Bitcoin and bring it closer to becoming a truly multi-chain asset. As the project continues to evolve and new updates are released, we can expect to gain a deeper understanding of its capabilities and the role it will play in the future of Bitcoin.