LumiBit is a Layer-2 scaling solution for Bitcoin that aims to provide a faster, more efficient, and inclusive Bitcoin ecosystem through the use of a technology called ZK-rollups, which allows for off-chain transactions that are secured by the Bitcoin blockchain.
The layer-2 scaling solution is fully compatible with the Ethereum Virtual Machine (EVM), which means that developers can easily port their decentralized applications (dApps) onto it to create a decentralized finance ecosystem on top of Bitcoin, known as BTCFi.
In short, LumiBit provides users with a Bitcoin layer-2 solution that relies on ZK-rollup technology to offer lower transaction fees and fast transaction confirmations on an ecosystem comparable to that of Ethereum.
LumiBit and the Blockchain Trilemma
The Blockchain Trilemma is a well-known hurdle for blockchains. Ethereum co-founder Vitalik Buterin first coined the term and describes a blockchain network that has to make trade-offs between three critical components: decentralization, scalability, and security.
Blockchains are distributed digital databases with chains of blocks of data secured and linked by cryptographic proofs. Bitcoin, for example, sacrifices its scalability to excel at security and decentralization.
The same is true for Ethereum, but other networks end up sacrificing decentralization — and security as a direct consequence of that — in a bid to scale to accommodate thousands of transactions per second.
An innovation that helps solve the Blockchain Trilemma is the use of layer-2 networks, meaning networks that are built on top of other networks and help overcome obstacles that the layer-1 network had.
LumiBit is a layer-2 built on top of the Bitcoin network that helps solve the scalability part of the Trilemma through the use of ZK-rollups, which move computation and state off-chain, while using bundled-up transaction data batches on-chain.
Essentially, ZK-rollups compute state changes off of the main blockchain — Bitcoin in LumiBit’s case — and then prove the validity of these changes through zero-knowledge proofs, which prove to third parties that a statement is true, without revealing that statement.
This concept was first introduced in a 1985 paper, “The knowledge complexity of interactive proof systems,” which formally defined zero-knowledge proofs that are still widely used today.
LumiBit uses efficient transaction verification using Halo2 as well as rollup optimizations to further reduce costs, addressing the current challenges of other layer-2 networks and creating an ideal scenario for high transaction throughputs on top of Bitcoin.
EVM Compatibility
One of the key features of LumiBit is its EVM compatibility, which means that smart contracts built on Ethereum can be easily deployed on the LumiBit network.
The Ethereum network has billions of dollars in total value locked on its protocols, while EVM-compatible networks, according to DeFiLlama, have over $60 billion in total value locked, with most being on Ethereum and Tron.
EVM compatibility makes it easy for developers to deploy their existing Ethereum smart contracts on LumiBit, without having to make any major changes, empowering the potential BTCFi ecosystem that can be created on it.
Benefits of LumiBit
There are several benefits to using LumiBit, including faster transaction processing than on the main Bitcoin blockchain given the use of ZK-rollups and off-chain processing, avoiding on-chain congestion during periods of heightened activity.
On top of that, transactions being processed off-chain and without congestion mean lower transaction fees for users exploring the world of BTCFi. LumiBit can scale to support a large number of transactions per second.
The network supports BTC asset bridging, allowing users to bring Bitcoin native assets onto an EVM-compatible ecosystem, meaning that tokens issued on Bitcoin are usable on a plethora of decentralized finance protocols.
The use cases on these protocols include lending, swapping, borrowing, play-to-earn, collectibles, and a lot more.
About LumiBit
LumiBit redefines Bitcoin’s ecosystem with a Layer-2 scaling solution utilizing ZK-rollup technology for secure, off-chain transactions, ensuring faster and more affordable digital finance operations.
Its seamless integration with the Ethereum Virtual Machine (EVM) facilitates an easy transition for developers to bring decentralized applications to Bitcoin, fostering a new decentralized finance (BTCFi) landscape.
Website: https://lumibit.xyz/ | X: LumiBitL2 | Telegram: LumiBit | Medium: LumiBitL2 | Discord: discord.gg/u5KVyjDq3z
