Charlie Hu, Co-founder of Bitlayer, recently sat down at Bitcoin 2025 to discuss his vision for the future of Bitcoin and decentralized finance. Bitlayer, a leading Bitcoin Layer 2 solution, aims to unlock the potential of Bitcoin within DeFi through innovative scaling solutions and bridges.
Discovering Bitcoin and Early Interests
Hu’s journey into Bitcoin began in 2013 when he bought his first bitcoin in Amsterdam. Initially fascinated by Bitcoin’s mining processes and proof-of-work systems, Hu quickly developed an interest in the broader blockchain ecosystem.
His early experiences at Bitcoin meetups provided a foundation that would eventually steer him deeper into blockchain technology.
From Ethereum to Polkadot
In 2015, Hu shifted his focus to Ethereum, engaging deeply with smart contracts and becoming actively involved in the Ethereum community. This phase included close interactions with key figures like Ethereum’s former CTO, Gavin Wood.
Hu later became a crucial contributor to Polkadot, significantly expanding its presence and ecosystem in Asia. His roles in Ethereum and Polkadot taught him invaluable lessons about the importance of programmability and innovation in blockchain technology.
Why Bitlayer? Filling the DeFi Gap
Observing Bitcoin’s expanding ecosystem around 2023, including the rise of Ordinals and NFTs, Charlie recognized a critical gap – Bitcoin lacked the robust DeFi capabilities available on Ethereum and other platforms.
This observation inspired him to co-found Bitlayer, with the goal of integrating Bitcoin’s security and liquidity with powerful DeFi functionalities.
Bitlayer focuses on creating a scalable Layer 2 environment for Bitcoin, specifically addressing Bitcoin’s limitations in DeFi. The key technology driving this initiative is the Bitcoin Virtual Machine (BitVM) bridge, which employs a trust-minimized approach.
Unlike traditional multisignature bridges, Bitlayer’s bridge uses a cryptographic challenge-response system, ensuring only one honest participant is needed to secure the network.
Securing Strategic Investment
In 2024, Bitlayer secured substantial funding totaling $25 million from high-profile investors, including Franklin Templeton and Polychain Capital.
These investments highlighted institutional recognition of Bitcoin’s growing role in DeFi and validated Bitlayer’s innovative approach.
Franklin Templeton’s involvement was particularly noteworthy due to their prominent role in the asset management industry and interest in expanding crypto utilities.
Collaborating with Bitcoin Miners
A key aspect of Bitlayer’s strategy is collaboration with major bitcoin mining pools, including Antpool, F2Pool, and SpiderPool. These partnerships are designed to facilitate priority handling of Bitlayer’s unique transaction types, enhancing transaction speed and reliability.
Miners benefit by gaining additional transaction fee revenue, an important consideration as Bitcoin’s block rewards diminish over time.
Addressing Criticisms and Concerns
Critics have raised concerns that prioritized transactions could disadvantage regular Bitcoin users. Hu counters this by emphasizing Bitlayer’s commitment to maintaining a fair market environment.
Transaction fees will determine priority, maintaining equitable access for all participants. The overarching goal is to create efficient, secure transactions without compromising the decentralized ethos of Bitcoin.
Vision for the Future of Bitcoin DeFi
Charlie envisions a multi-chain future where Bitcoin integrates seamlessly with ecosystems like Ethereum and Solana, enhancing liquidity and utility across decentralized applications.
Bitlayer’s technology aims to enable sophisticated DeFi applications on Bitcoin Layer 2, including decentralized exchanges, lending platforms, and high-frequency trading systems.
Looking ahead, Bitlayer plans to launch several critical updates, including their governance token, major institutional financial products, and a V2 upgrade promising higher performance and scalability.
Conclusion
Bitlayer represents an ambitious effort to revolutionize how Bitcoin interacts with DeFi.
With robust financial backing, strategic mining pool partnerships, and groundbreaking Layer 2 solutions, Bitlayer is positioned to play a pivotal role in Bitcoin’s ongoing evolution, ensuring that Bitcoin remains not just a digital store of value but also a versatile and powerful asset within the broader financial landscape.
