Charlie: 0:00

More and more people now they count on chain. They buy and sell NFTs, they buy and sell the meme coins they enter like AI agent or the other new protocols on chain. You have completely decentralized like DeFi kind of model.

Joeri: 0:15

Hello everyone and welcome to the Web3 CMO Stories podcast. My name is Joeri Billast and I'm your podcast host, and today I'm honored to be joined by Charlie. Hello, Charlie, how are you? I'm doing good. Thanks for having me, Joeri. Yeah, happy to have you guys. If you don't know, Charlie, Charlie Hu is the CEO and co-founder of BitLayer. He's an early builder and investor in Polkadot, ex-head of business development at TeasersChain and ex-head of Southeast Asia at Polygon. Wow, you have an impressive background. You're building an impressive business. I would say so, charlie. Yeah, I'm curious what inspired you to transition into Bitcoin development and then, of course, just start where you want to start. But, of course, I'm curious how that journey led to BitLayer.

Charlie: 1:10

Sure. Thanks again, Joeri, for having me. Yeah, so I think now it's Bitcoin. You know my crypto journey started from Bitcoin as well. I bought my first Bitcoin in 2017. As 2013, I was doing my previous startup that was before crypto in Amsterdam. At that time, bitcoin was pretty early. It was still FPGA mining of Bitcoin. So I got to know Bitcoin mining because there was a pretty interesting Bitcoin Amsterdam meetup. I went there. Some of the Bitcoin OGs were showing approval work and how FPGA miners can actually mine out Bitcoin and so on. I got pretty inspired, interested as well. So I started reading about the Bitcoin white paper and everything, but I will say I was never a Bitcoin maxi or laser eyes, so to speak.

Charlie: 2:04

The main pivotal moment for me to enter crypto was because of Ethereum. In 2015, I went to Berlin, got to know the Ethereum core guys heresy team and so on who were kind of building the Ethereum clients, ethereum wallet yeah, obviously you mentioned. So I was early involved with Polkadot as a first-run investor in 2017. I was a translator interpreter for Web3 Foundation for Gavin when they were doing the Asia Tour, polkadot events and DeFi Summer came. I moved back to Ethereum. In 2021, I joined Polygon. It was pretty interesting to go grow the ecosystem with Polygon in the last cycle. I was very excited. I learned a lot working with them.

Charlie: 2:46

But of course, the pivotal moment for me to orange peel myself back to Bitcoin was because of Arnos so pretty interested, pretty lucky as well. My friends told me about this interesting you know protocol called Arnos, very inspired by the whole idea you can create assets writing data natively on Bitcoin Right. So obviously people are talking about native Bitcoin NFTs, not like just putting the metadata on Ethereum and the actual JPEG is actually on like third-party storage, no matter it's like IPFS or even just AWS Bitcoin Ardinos storage, no matter it's like IPFS or even just AWS Bitcoin. Audinose is like native on Bitcoin. It's type of proof, it's always there, it's natively on Bitcoin, it's like you know, back to the mother chain and so on. So I was like pretty early involved with the Audinose stuff. Audinose was very heavy, very active in Asia. So I was like promoting quite a lot of Audinose early days, almost next month, first week, some 5K, 10k.

Charlie: 3:49

I get to know all this Bitcoin net primitives across, like ReaSense, brc20, and, you know, paystamp and so on. A lot of those traders get very excited about the Bitcoin ecosystem, especially in Asia, and I think the more people talk about it, the more you're like okay. When people pay hundreds of dollars of a gas fee of Bitcoin right, they hard earn Bitcoin for all these, like all those assets, like crazy mints and so on, I think that's like okay. We have to deliver another, better solutions for people to, you know, easy to use all these like protocols around Bitcoin and paying less fees, right. So that's kind of the whole journey.

Charlie: 4:31

But for us, for me, why I started Binlayer was actually because of the DVM solution. Okay, so I was doing research about all these like scaling solutions. Obviously, in the history of Bitcoin in the last 15 years, there were multiple attempts right, they want to bring the programmability for Bitcoin. There was like Connect Points, liquid, right, rgbs, and then like Rootstack. So Rootstack was also kind of the sidechain approach as well. But basically it was interesting, you know. But BVM was interesting, you know, without actually soft fork, without actually depending on another BIP, we can use existing Bitcoin script to dive on BVM solution and putting a lot of actual codes into work and as one of the biggest BVM team in the space so far.

Joeri: 5:36

Wow, that's impressive. And if you now want to say it in a nutshell, and if you were sent as someone asks you how is BitLayer different from other Bitcoin layer 2 solutions in the market? What would you say?

Charlie: 5:51

I think Bitcoin L2 is definitely one of the hottest trend, especially last year, early last year in Q1. A lot of tea jumped on the Bitcoin L2 race. I think so far in terms of one difference as compared to other Bitcoin L2 race, I think so far in terms of what differs us compared to other Bitcoin L2s, is one we've been growing pretty fast. We are one of the fastest growing Bitcoin L2 with already over 25 million transactions, over 280 projects already. We're making decent amount of gas fee revenue every month, especially in the last three months this month. We're expecting decent amount of gas fee revenue every month, especially in the last three months. This month we're expecting another $800,000 gas fee revenue, especially the campaign with Binance Wanted.

Charlie: 6:36

On the technical side, as I mentioned, we are one of the first teams to deep dive on BVM research and engineering work and trying to deliver the trust-minimized bridge with Bitcoin, the L1, and all the other EVM, other EVM compatible chains or non-EVM chains. And, yeah, we have a decent amount of traction on TVL All the time. We've hit almost like 1 billion TVL Kind of. These are protocols already work with us On the BVM side. We are the official BVM alliance member and contributing quite a lot of open source code, especially on the BVM chunker solution, which is a very innovative feature we came up with to divide the Zakey proofs into smaller pieces without actually sacrificing the security level for BVM. Yeah, so that's kind of on the technical side.

Charlie: 7:25

In terms of ecosystem side, I think we are one of the first ecosystem on the Bitcoin L2 space Actually have a pretty interesting developer communities. We have this unique design. We call this the ecosystem leaderboards. We started out the top TVR top transaction projects on the website. Yeah, we are the first project ever in history backed by Bitcoin ETF firms. It's very contemplative and they give us a very strong foot in the door in the international, especially US, institutional sites. Currently we're talking to many other institutions that are Bitcoin issuers. They want to put their Bitcoin assets into work, into staking as well. Yeah, that's kind of set up in the business side and also technical side.

Joeri: 8:13

You mentioned that fact in Templeton like an industry giant, institutional giant, also exploring Bitcoin yield strategies. What are the opportunities and challenges that you see in abridging traditional finance and then, yeah, Bitcoin DeFi?

Charlie: 8:31

The challenges. One is before ETF rates. Actually, most of trade-fied institutions don't have their compliant way to have the Bitcoin exposure. So the Bitcoin ETF is amazing legal process, right for them to actually properly, legally now embrace Bitcoin as one of their alternative assets. They can actually properly put investing Bitcoin into part of their asset management strategy. But of course, those institutions, they are not in the position to just trade Bitcoin. They actually don't want to sell the Bitcoin in the next one or two years and, of course, by holding the Bitcoin ETF or by holding the Bitcoin assets, they want to get them additional yield. Right, so that's it. But the yield from Bitcoin is pretty challenging, right, bitcoin has layer one that doesn't have the native yield as Ethereum layer one and they want to know. Institutions like Franklin Temple, they want to know what are the risks involved, right To put their Bitcoin into staking, and so on.

Charlie: 9:38

Ging is also another major issue. Previously, before the BVM bridge, most of the Bitcoin bridge is basically multi-sig, right, so you have to trust majority of signers are honest, otherwise you know the funds sent to the bridging is not safe. Bvm bridge basically lowers down the trust assumption from the majority honest signers to one out of an honest, so it's much lower in terms of trust dependent. They make it more decentralized, and so institutions they want to make sure it's secure. Right, if they put that Bitcoin into an L2 environment. When crazy things happen there's like security attacks and so on their funds, their bitcoin and who that enter the l2s can easily withdraw back to bitcoin l1 right. So that's a very important part. So that's the thing, I think, why we need to build bitcoin security equipment L2, not just sidechain. So that's a key difference Bitcoin sidechain. When crazy things happen people who bridge the assets from Bitcoin L1 to the sidechains it's not easy to actually pull the assets back For actual Bitcoin L2 with Bitcoin security equivalent. When some extreme security vulnerability event happens, users' funds are actually still safe to prove that, as long as they are willing to pay the fees with Bitcoin financial verification. So that's the part number one why this is important.

Charlie: 11:16

The second part is actually more economic alignment. Sidechain doesn't really contribute the fees back to Bitcoin L1. So if you are Bitcoin miners, you're not actually getting any value to recoup from on Bitcoin sidechains, whereas real native Bitcoin L2, we are basically contributing fees back to Bitcoin L1 through the verification process, right? So any transaction happening on our L2 environment. If we want to settle those transactions, settle back to Bitcoin L1, we pay the fees.

Charlie: 11:52

We work with Bitcoin L1 or other Bitcoin online DA and data availability. There the transaction will achieve the Bitcoin salinity. It will be eventually settled on Bitcoin blocks. So that's the process. We're paying fees back to miners. So basically, the more transaction we have on our L2 environment, the bigger the ecosystem, our ecosystem becomes, the more fees we're going to be contributing back to the Bitcoin miners. So those are the fees miners can get benefits with our ecosystem, and so those are the very important thing In the upcoming future. Bitcoin price goes up, but if we have more and more housing, the miners will have less and less rewards just based on the mining rewards. Bitcoin, in order to become more sustainable, we need more fees for the miners to continue getting incentivized to contributing on a security network right. So that's very important for the future of Bitcoin in the long run to have additional fees for the miners, not just the mining blocks, but also the conduction fees and so on as well.

Joeri: 13:03

Yeah, yeah, I read somewhere you're really growing fast. A Bitlayer I think, accumulating nearly 900 million fees in September Maybe that's a figure I found. What factors are contributing to the success, to the growth that you have, would you say?

Charlie: 13:24

I think the speed of growing ecosystem is very important. It's a race of my share developer attention, but also the TVL right, liquidity as well. I think we have been trying and growing very iteratively to figure out how to work with other ecosystem together with other wallets. So far since last April, since we launched our mainnet, v1 mainnet, we've been effectively growing our ecosystem by working with the top three wallets, which is OKEx wallet Currently. We're now still in the campaign with Binance wallet.

Charlie: 14:02

We're getting quite a lot of on-chain users for all these wallet providers and we learned a lot how to push our ecosystem project on the spotlight. Let them embrace with all the Web3 wallet users and then we gain a lot of user feedback right by having those campaigns. So we get quite a lot of transactions. A lot of, you know figure out the user adoption. Users who use the wallets actually participate in our e-codes campaign. They share a lot of user feedback right and it campaigns. So those are the real important feedback. We, you know we lend and also improve ourselves. So I think that's very important to really help our ecosystem projects that define our network to figure out their product market fit, the product market fit in terms of the on-chain users who are actually doing on-chain transactions, to use on-chain protocols across Bitcoin lending, bitcoin, restaking, cdb, stable coins, bitcoin option protocol and so on.

Charlie: 15:06

Yeah, in crypto we kind of say it's a very broader community and so on. A lot of the crypto traders are still using centralized exchanges to buy and sell their Bitcoin. All the others, but I think more and more people now they count on chain. They buy and sell NFTs, they buy and sell the meme coins, they enter, like AI agent, all the other new protocols on chain In a completely decentralized DeFi kind of model. So those are the users we want to embrace. We want to attract them to our ecosystem and they can try our Bitcoin DeFi use cases in our ecosystem and you know our yields, but I guess they're Bitcoin and other things.

Joeri: 15:50

Yeah, I see more and more people indeed, because, like we are again in a boom, I would say Web3 is again, again, a positive world. More and more people understand the dangers on centralized exchanges and you know, they are more and more obviously educated. Partnerships are really important. You mentioned the partnerships that you have. I would say, for a bit layers, adoption strategy partnerships are key, right, that's what you are confirming.

Charlie: 16:19

Yes, I think yeah. Partnership with other ecosystem solutions such as Day and Zero can be very important. They give us access to, like RWA and other networks. Partnership with other Web2 wallets very important. As I mentioned, all these campaigns bring us a lot of new users. On-chain Partnership with other Web2 wallets Very important.

Charlie: 16:37

As I mentioned, all these campaigns bring us a lot of new users. On-chain Partnership with other chains we work with our BVM bridge. It's very important. Currently we're exploring the synergies with many other major L1s on the Rust and the Move-based language and also working with other Ethereum L2s as well. Use our bridge to access to more Bitcoin assets and add their new type of TVL Partnership with institutional. You know it's very important, right, very contemplative, talking to other Bitcoin issuer that can potentially bring their Bitcoin liquidity to our ecosystem and, more importantly, partner with other use cases. Other builders actually build actual design protocols that deploy our ecosystem. Yeah, these are the very important partners that without them, we wouldn't have a real ecosystem. Their collective success is our success.

Joeri: 17:28

Yeah, yeah, so institutional capture is a growing concern in the Bitcoin ecosystem, but how does BitLayer maintain then the decentralization you know while collaborating with those large financial institutions?

Charlie: 17:46

Yeah, first of all, our funds are still all funds are holding, you know on-chain Web3 custody across like Fundbase, prime, kobo, standard, hope and so on. Five blocks Our network with tens of different validation sets. It's fairly decentralized. Once we're going to launch the v2 mainnet we're going to make it even more open to the validators and so on. So make it more decentralized. Working with centralized kind of certified institutions that are very fast and competent, they don't really we don't actually sacrifice our security and decentralization level, meaning the assets they actually potentially bridge over, enter our liquidity pool and so on. It's still on chain base and it's still entering through our BDM bridge right, which is also decentralized and trust minimized. So working with credit fund institutions is very important, especially access to liquidity. But I think we try to stay on the first principle of fully on chain, trust minimized and a decentralized base.

Joeri: 18:56

Yeah, If I'm correct, you have an upcoming launch Bitlayer 2, right. Can you tell me about what new functionalities or improvements can we expect and how they might impact users and developers?

Charlie: 20:23

Yeah, so our V2 is launching. Actually, we already launched the testing version last December.

Charlie: 20:28

We launched the main version next month. We're going to announce that in Istanbul as well. So the three main features is we're delivering one of the first time, plus minimized BVM bridge right For Bitcoin L1 users to bridge their liquidity from their Bitcoin L1 to all kinds of EVM compatible chains or other and like out, you know, l2s and so on. Then it's the main features to activate and, you know, bring more Bitcoin liquidity into use cases, right? The second feature we're delivering is the Bitcoin verification. That's a key feature.

Charlie: 21:08

We, you know we are building to delivering the Bitcoin finality, meaning it's no longer just a sidechain. The transaction happening on L2 environment can actually be settled back to Bitcoin into the type 3 model, so in that way it's Bitcoin security equivalent L2. So the security level is the same as Bitcoin. If people trust Bitcoin security, they can trust our transaction is secure because it's actually settled back to Bitcoin blocks. So these are the very two major features we're delivering. The third feature we're going to deliver in the near future is high performance. Real-time VM DECO allows us to empower high-performance, more high-performance, fast transaction-required application. That's very important to bring more massive option use cases to the Bitcoin world.

Joeri: 22:11

Right. So a lot of things happening. You're building a lot, but at this moment, what are you now the most excited about? When it comes to what you're doing with BitLayer, or maybe the market in general? What makes you happy? What makes you excited at this moment?

Charlie: 22:29

I think what makes me excited is, potentially you get more you know instruction from the traditional world to actually figure out the Bitcoin strategy this cycle in 2025, I strongly believe you know Donald Trump become the new president, which is pro-crypto right. A lot of different countries are now figuring out the Bitcoin strategy, even figuring out establish their Bitcoin ETF as well. A lot of Fortune 500 companies are going to embrace and figure out their Bitcoin strategy, no matter if it's Bitcoin mining or putting Bitcoin as part of their strategy management strategy, or use Bitcoin ecosystem use cases to do all kinds of things. So we're still working in progress, but hopefully we'll get more and more institution to embrace the Bitcoin DeFi. When they hold Bitcoin, they buy more Bitcoin as well. They actually can put their liquidity into all kinds of DeFi use cases to earn yield and so on.

Charlie: 23:34

I think that's very important. I'm very excited For the retail side. While they're already in the Web3 space in the last two cycles, we want to bring new use cases for their Bitcoin usage right. Bitcoin is no longer just a big digital gold which you use in people's cold wallet doing nothing, with no yield, no interest and so on. We might provide use cases actually yield for those Bitcoin holders, which is very important and exciting Absolutely.

Joeri: 24:06

And if now, Charlie, if there was one advice you would give to entrepreneurs, marketers looking to build, looking to scale projects within the Bitcoin ecosystem, what would that be?

Charlie: 24:20

I think for builders in the blockchain space, one of the most important advice I will give to any of them Cambodia is the space is getting bigger and bigger. Right, we have to figure out how to provide good use cases with good UI UX and a good value proposition to the non-crypto bro, like inner circle, where we need to embrace the mass adoption and figure out what kind of product can solve interesting, real problem for the non-crypto bros as well. Right, so it's not just no longer this small echo chamber of crypto bros talk about all this trading, icos and whatnot and so on. Right, this space is getting much bigger and much higher market cap and so on. A lot more new users who are not like OGs the veteran is entering the space because all kinds of use cases. That's very important. Second thing is also figure out what's the long-term strategy and also embrace the innovation while being compliant.

Charlie: 25:34

I think compliance is also another major trend upcoming, with governments trying to regulate crypto. Crypto is no longer just this weird wide west with Silk Road, all these things anymore. Regulated companies, fortune 500, even all the compliance you know 25 firms are also embracing that. So it's the important new chapter of the industry, right? So, yeah, I think this is very important to be compliant, to understand. You know what kind of mass audience, what new users want and you know satisfy the demand. You know what kind of mass audience, what new users want and you know satisfy the demand. You know solve their problems. I think that's very important.

Joeri: 26:19

That's a great message, and maybe the last thing I would like to ask you is if you can talk about that, because everything is going so fast. But what is your vision for the future for BitLayer, maybe the next three, five years? If you can see so far in the future, I think five years is a bit too long.

Charlie: 26:40

I honestly have to humbly say I don't know. I have to stay humble and stay agile and flexible Next two years. We have pretty clear vision. We want to be one of the technical solution provider team builder that contributing in the BVM journey. Bvm vision delivering this Bitcoin security equipment to L2, bringing more fees back to miners, delivering more use cases to the users and providing native yield to the Bitcoin holders across the institutions and also retail. That's the plan that we want to achieve with our better and better version of technology and architect and also empower some successful use cases which can be very important for the market. Fit right. That's something. Being an ecosystem builder, I truly hope we have some successful use cases actually can hit some home run.

Joeri: 27:42

Well, thank you so much, Charlie, for sharing all of that. Thank you so much for sharing your story. If now my listeners, you know they want to know more about BitLayer and everything you are doing, where would you like me to send them?

Charlie: 27:58

Yeah, thanks a lot, Ayrun, for the podcast. For the people who are interested about what's going on with BitLayer, what's the upcoming things especially? You know we're going close to TGE. We're launching our governance token as well. We have a few very major announcements we are launching next month about our BVM bridge and so on. Stay tuned and follow us on Twitter. Our Twitter is BitLayerLabs. We're getting close to 1 million followers soon, so, yeah, hopefully to find a way to engage with us. We welcome you to join our community on Bitlayer Labs, on Telegram, on Discord. There's some interesting benefits we're giving to the early adopters before our TGE. Yeah, there's some interesting alpha there, yeah, so stay tuned.

Joeri: 28:49

Absolutely, and as my listeners know, charlie, there are always show notes. All the links that you have mentioned, or maybe the ones that you will still send me or and I will send me, will be in there in the show notes so people can always go and look there. It was really a pleasure to have you on the show, charlie. Yeah, thanks a lot. Yeah, guys, what an amazing episode with a lot of value in it. I learned a lot. If you also learned a lot and you think this is maybe useful for people around you, be sure to share this episode with them. If you're not yet following the show, this is a really good moment to do this. If you haven't given me a review yet, it would really help me if I get another five stars to get an even bigger audience for this podcast. And, of course, I would like to see you back next time.

Charlie: 29:41

Take care take care, thank you.