The first-tier blockchain Tron is considering launching a Layer 2 solution for Bitcoin, which would support a “wrapped” version of the Tether stablecoin (USDT), allowing billions of dollars in liquidity to flow into the Bitcoin ecosystem.
In February, Tron founder Justin Sun announced in an X post a roadmap for the Tron Bitcoin Layer 2 solution, enabling stablecoins and TRC-20 tokens to move between Tron (TRX) and Bitcoin.
“This integration will not only link TRON directly with Bitcoin but also facilitate access to over $55 billion in value to the Bitcoin network, thereby injecting financial vitality into Bitcoin,” Sun said at the time.
A Tron representative stated that the plans will likely include creating a wrapped version of Tether (USDT). Currently, more than half of the 104 USDT circulating in multiple blockchains are on the Tron network.
“As the home of leading stablecoins like USDT, we bring significant liquidity and stability to the table,” said the Tron spokesperson.
He added that the integration is likely to attract new users to the Bitcoin ecosystem and expand network usage capabilities, especially in decentralized finance.
Sun stated that the Bitcoin Layer 2 solution will allow TRON-based tokens to “seamlessly” interact with Bitcoin.
“This solution introduces a protocol that compatible with Bitcoin, aiming to maintain the speed and low fees of POS systems while ensuring the safety of POW & UTXO in conjunction with BTC L2!“
The Tron head stated that the plan is still in the development stage but is likely to be implemented.
#TRON Announces Its Bitcoin Layer 2 Solution and Road Map
Today is a significant day for #TRON.
Let's make #Bitcoin fun again!
As the protocol behind the world's largest stablecoin market, boasting $55 billion, and the decentralized finance Total Value Locked (TVL) of $22…
— H.E. Justin Sun 孙宇晨 (@justinsuntron) February 15, 2024
Currently, the firm will utilize existing cross-chain protocols to connect USDT and other tokens between Bitcoin and Tron. Part of Tron’s plan also involves collaborating with several Bitcoin Layer 2 protocols.
Competing stablecoin USD Coin (USDC) may be a different story, as its issuer Circle halted the minting of USDC on Tron in February.
The Tron head stated that the recent surge in community interest in expanding Bitcoin’s functionality and scalability has been one of the main reasons why he is considering creating a Layer 2 solution.
He added that developing decentralized applications on Bitcoin has the potential to improve Bitcoin’s price dynamics since fees will be denominated in Bitcoins.
Meanwhile, the decentralized autonomous organization Tron, TRON DAO, also aims to create a convenient wallet and toolkit to support oracles and BRC-20 tokens on the Bitcoin blockchain.
