A Bitcoin layer-2 govt defined how Bitcoin narratives that have been “overhyped” have now wholly vanished whereas the ecosystem develops.
In a Cointelegraph interview, Bitlayer co-founder Charlie Hu laid out three Bitcoin narratives that he believed have been overhyped. This included narratives that surrounded Ordinals, layer-2s and re-staking.
In accordance with Hu, one of many overhyped narratives in Bitcoin was non-fungible tokens (NFTs). The chief instructed Cointelegraph that whereas inscriptions might have gone “to the moon,” Hu stated the period is “utterly gone.”
CryptoSlam knowledge reveals that within the first quarter of 2024, Bitcoin NFTs had a quantity of $1.4 billion. In 2025 Q1, the quantity is barely at $280 million, displaying an 80% drop. The chief believes that the 1,000x days of Bitcoin NFTs could also be over and that folks can’t anticipate related “loopy” value performances anymore.
Are Bitcoin layer-2s operating out of steam?
Other than Bitcoin NFTs, Hu instructed Cointelegraph that the hype round Bitcoin layer-2 and Bitcoin re-staking has additionally declined amongst enterprise capitalists.
Hu instructed Cointelegraph that at the least 80 layer-2 networks aimed to get funded in the beginning of 2024 when the layer-2 narrative was robust. The chief stated many initiatives pitched their concepts to buyers, the media and completely different communities. Hu stated that whereas there was some hype, this was “undoubtedly over.”
Many different crypto executives and entrepreneurs resonate with Hu’s perspective in regards to the dying hype round layer-2 ecosystems. On Feb. 20, Stacks co-founder Muneeb Ali stated the “honeymoon part” for Bitcoin layer-2s is over. The chief stated that the majority initiatives will stop to exist as their preliminary pleasure fades.
In the meantime, Hu additionally instructed Cointelegraph {that a} third “overhyped” narrative was Bitcoin re-staking. He stated that for the time being, there are solely two or three initiatives nonetheless surviving after the height of the narrative’s hype part in 2024.
Whereas some hyped narratives began to fade, Hu believes there are numerous issues to stay up for within the rising Bitcoin ecosystem. The chief stated that whereas layer-2s are an excellent narrative, they see it extra as an engine that powers Bitcoin’s decentralized finance (DeFi) ecosystem, which might enable holders to discover yield alternatives. Hu instructed Cointelegraph:
“Bitcoin layer-2s are offering structure as a programmable, trust-minimized type of infrastructure that would present yield for the Bitcoin whale holders or establishments. That’s a vital narrative. I feel we’ll broaden increasingly with the use circumstances with adoption.”
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Bitcoin DeFi is but to take off
In the meantime, Dominik Harz, the co-founder of hybrid layer-2 Construct on Bitcoin (BOB), instructed Cointelegraph that Bitcoin layer-2s ought to be seen as a long-term play.
“Taking a look at Bitcoin Layer-2s by means of a short-term lens misses the purpose. Hype cycles come and go, however lasting developments in crypto, like Bitcoin itself, are inherently long-term performs,” Harz stated.
The chief additionally believes that Bitcoin DeFi has not but reached its full potential. “Bitcoin DeFi hasn’t even actually taken off but. We’re very early. Solely 0.3% of Bitcoin’s market cap is lively in DeFi proper now in comparison with 30% for Ethereum,” Harz instructed Cointelegraph.
Harz identified this was a 100x discrepancy, saying it will lower quickly as Bitcoin DeFi explodes. The chief additionally stated layer-2s are mandatory technological developments for Bitcoin DeFi to hit the market.
Max Sanchez, the chief know-how officer of layer-2 protocol Hemi Labs, additionally believes that Bitcoin layer-2s usually are not shedding steam.
He instructed Cointelegraph that the area is coming into a maturation part the place fundamentals matter. Sanchez stated that many early initiatives within the Bitcoin layer-2 area introduced know-how from Ethereum with out adapting it to Bitcoin’s distinctive structure “in a method that really extends Bitcoin.”
Sanchez, who works on a hybrid mission connecting to Ethereum, additionally stated that constructing a layer-2 in only one silo and forgoing interoperability with Ethereum-based protocols is a “false notion.”
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