Have Ordinals Fueled Bitcoin’s L2 Arms Race?
The introduction of Ordinals has ignited a surge of innovation within Bitcoin’s ecosystem, particularly through various Layer 2 implementations. These include a variety of rollup-based Layer 2s, anchored-chains, sidechains, state channels, liquidity pools, and Proof of Stake L2s, all aimed at enhancing Bitcoin’s scalability and functionality. By enabling off-chain transaction processing, these solutions increase transaction throughput and reduce fees, maintaining Bitcoin’s security while supporting complex applications. This wave of innovation bridges the gap between Bitcoin’s conservative “sound money, store of value” approach and the experimental, versatile world of Ethereum’s DeFi and Web3, ultimately expanding Bitcoin’s utility while paving the way for DeFi on Bitcoin.
