Why Bitcoin DeFi?
Bitcoin Market Opportunity
The untapped potential in Bitcoin DeFi is enormous, with current Bitcoin Layer 2 solutions having a Total Value Locked (TVL) of only ~0.1% of Bitcoin's value, compared to Ethereum's Layer 2s which have locked in 10% of Ethereum's value.
Given that Bitcoin's market cap is approximately three times larger than Ethereum's, the growth potential for Bitcoin Layer 2 solutions represents a staggering opportunity in the hundreds of billions of dollars.
Bitcoin Current DeFi Options
Current Bitcoin DeFi options are limited and flawed. Ordinals/BRC20 on Bitcoin Layer 1 face issues of network congestion, high costs, and limited scalability. Alternatively, wrapped tokens on Layer 2s or other chains introduce risks of centralization and potential hacks.
Mintlayer introduces a game-changing third option: direct BTC Cross-Chain Swaps (Atomic Swaps). This solution enables the use of native Bitcoin in DeFi applications, eliminating the drawbacks of Layer 1 congestion and the security risks of wrapped tokens. With Mintlayer's Atomic Swaps, users can leverage their real Bitcoin directly in dApps, opening up new possibilities for secure and efficient Bitcoin DeFi.
Bitcoin Utility
Bitcoin's Layer 1 functionality is intentionally limited. However, the DeFi ecosystem demands expanded capabilities like lending, staking, and complex smart contracts.
Mintlayer enables these functionalities without congesting the Bitcoin network. Through Atomic Swaps, users can utilize native Bitcoin in various dApps and DeFi protocols without intermediaries or wrapped tokens. This approach maintains Bitcoin's core principles while unlocking its full potential in the broader blockchain ecosystem, bridging Bitcoin with innovative decentralized finance applications.
Why Mintlayer?
Robust Architecture
Mintlayer's development team has created a robust, thoroughly tested architecture with a running mainnet, achieving a CertiK AA security score. Using Rust for node development ensures speed and security, leveraging its unique borrowing system and thread safety features.
Atomic Swaps
Secure, trustless cross-chain swaps without intermediaries. Trade native assets directly with Atomic Swaps which eliminate counterparty risk and allow truly decentralizing finance without the need for wrapped tokens.
Accessible Decentralization
Low hardware requirements enable widespread node participation. Even a Raspberry Pi can run a full node, fostering true decentralization and network sustainability while reducing energy consumption.
Mintlayer Philosophy
In addition Mintlayer is inspired in its architecture by Bitcoin, giving simplicity more importance than flexibility, in fact it doesn’t implement turing complete smart-contract and it’s based on UTXO instead of accounts block time is 2 minutes instead of few seconds, it’s slower but more reliable. This makes Mintlayer easier to use.
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Mintlayer enables you to use native Bitcoin within DeFi applications like the Atomiq DEX, expanding Bitcoin's functionality beyond traditional limits. With Mintlayer, Bitcoin is not just a store of value but also a significant contributor to the DeFi space. Engage in lending, borrowing, payments or staking, and ensure Bitcoin stays relevant in the DeFi revolution.
Furthermore, Mintlayer unlocks atomic swaps, RWAs, simple tokenization, smart contracts, Non-Fungible Tokens (NFTs), dApps and more.
The potential use cases for projects built on Mintlayer are too numerous to list here but to learn What Kind of Projects Can Be Built on Mintlayer head over to our blog.
Mintlayer's DEX uses the same smart contract used by the Lightning Network but specifically for exchange purposes. It's called HTLC (Hash Time-Locked Contract) and, in our context, allows two parties to exchange assets minted on Mintlayer with real bitcoins on the Bitcoin network. Additionally, we are currently investigating how to tighten the integration with Bitcoin even more, adding read-only functions on Mintlayer for advanced smart contract capabilities, as well as a Lightning Network integration.
Mintlayer is designed from the ground up to be interoperable with Bitcoin using cross-chain swaps (i.e., Atomic Swaps). This has two main advantages: 1) There is no need to manage a wrapped or federated version of Bitcoin; 2) Bitcoin security is not traded off, as your BTC remains in your Bitcoin wallet, eliminating the risk of a centralized third party being hacked.
To learn more about what Mintlayer offers, check out What Makes Mintlayer Unique.
Native Cross-Chain Swaps also known as Atomic swaps represent a revolutionary method for conducting direct, peer-to-peer cryptocurrency exchanges without the need for intermediaries such as centralized exchanges. This technology relies on Hash Time Locked Contracts (HTLCs) to ensure that both parties either complete the trade successfully or the transaction is voided, eliminating the risk of one party defrauding the other.
HTLCs are smart contracts that create a time-based escrow using a cryptographic passphrase. This type of smart contract requires the recipient to claim the payment within a specified timeframe using the correct passphrase, or else forfeit the funds.
Mintlayer’s first incubated project Atomiq DeFi is currently building a Decentralized Exchange (DEX) using Mintlayer atomic swaps technology.
If you're interested in the technical details of how this works you can head here.
Atomic swaps utilize smart contracts to ensure cross-chain transactions are executed simultaneously and securely. If one party fails to meet the conditions, the transaction is canceled, and both parties retain their original assets.
This approach is superior to wrapped tokens (like WBTC) or token bridges, which introduce trusted third parties and additional attack surfaces. Token bridges have been the most significant cause of losses in DeFi, with $1.4 billion lost in 2022 alone, mainly through social engineering attacks.
By allowing direct use of native Bitcoin in DeFi applications, Mintlayer eliminates the need for wrapped tokens or other forms of token bridges to move liquidity off Bitcoin's blockchain. This not only enhances security but also maintains true decentralization in cross-chain transactions.
For a deeper understanding of different Bitcoin bridging methods and their pros and cons, check out our blog post: "Bitcoin Bridging: A Comparison Between Methods to Move Liquidity Off Chain".
At its core, Mintlayer is designed to interact and be interoperable with Bitcoin and The Lightning Network.
It enhances interchain connectivity with Bitcoin by utilizing native BTC cross-chain swaps, also known as atomic swaps. This allows the direct use of native Bitcoin in DeFi applications, while other blockchains require wrapped tokens or other forms of token bridges to move liquidity off of Bitcoin's blockchain.
Additionally, the team is working on the ZK Thunder Network, which will be a superfast, EVM-compatible smart contract execution layer 3 that will settle on Mintlayer. It combines the robustness of Mintlayer L2 with the scalability of ZK rollups and the additional capabilities of EVM.
Mintlayer is designed to be truly permissionless and open source, enabling anyone and everyone to build and innovate on its platform.
Open source projects enhance transparency and security by permitting anyone to access and review the source code.
Note: Some of the initial token purchases, airdrops and giveaways did require a KYC process and certain regions where not allowed. However the overall protocol is designed for anyone to use and build on.
Mintlayer has a myriad of potential use cases as it unlocks Bitcoins capabilities via atomic swaps. Opening bitcoin to smart contracts, Non-Fungible Tokens (NFTs), RWAs, simple tokenization, dApps and more.
Smart Contracts:. Mintlayer's smart contracts are built-in and are tested and secured by core engineers. Unlike Ethereum's complex Turing-complete smart contracts, which have led to a number of security issues, our non-Turing-complete smart contracts significantly reduce security-related errors, are easier to audit, and take up less space to execute on the blockchain. On the Thunder Network, you can still execute EVM-compatible smart contracts, but the trade-off is explicit, and limited to the execution of the smart-contract on the Layer3.
Decentralized Exchange (DEX): Mintlayer allows for the creation of decentralized exchanges (DEXs), facilitating efficient asset trading while users maintain self-custody.
Token Generation: Mintlayer simplifies the process of token creation with a special transaction type, enabling anyone to generate tokens for their organization or project without the need for a deployer contract.
Real World Asset (RWA) Tokenization: Mintlayer's RWA SaaS Platform will enable institutions to seamlessly tokenize and deploy real-world assets with built-in compliance services, bridging traditional finance with the blockchain ecosystem.
Non-Fungible Tokens (NFTs): Beyond digital art and collectibles, Mintlayer supports wider applications for NFTs like voting, record-keeping, supply chain management and healthcare records. Learn more about future use cases for NFTs on our blog.
Marketplaces and Derivatives: Mintlayer supports the creation of tokenized derivatives and the digital marketplaces to trade them. Using blockchain technology users can increase efficiency, transparency, and accessibility during the process of creating, buying, and selling digitized assets.
Infrastructure: Lastly, Mintlayer ecosystem will need infrastructure, including on-ramps, oracles, wallets, analytics tools, and other developer tools. We intend to nurture infrastructure development through our crypto grants initiative.
To learn more about the projects that can be built on Mintlayer, check out our blog.
Although there are varying definitions for the term "Layer 2" when used in blockchain, we see it as a secondary framework or protocol that's built to work alongside a pre-existing blockchain system.
Layer 2 solutions are designed with the core objective of enhancing the feature set in order to address the limitations posed by Layer 1 blockchains. This can be in the form of increasing scalability or speed of transactions, or adding completely new features that were not possible with the original chain.
Mintlayer is a Layer 2 protocol for the Bitcoin blockchain.
What makes Mintlayer unique is that it allows for atomic swaps with native BTC, fosters true free market practices, ensures wide accessibility, and streamlines token issuance without the need for high-end hardware or a distinct gas token.
Native Bitcoin: We believe Bitcoin is the de-facto digital gold of the future. Uniquely, Mintlayer supports the use of native Bitcoin through atomic swaps, eliminating the need for wrapped tokens or token bridges. This reduces dependency on third-parties and decreases friction between Bitcoin holders and DeFi applications.
Promoting Democracy and Inclusion: Mintlayer is designed for universal accessibility. Unlike many blockchains with demanding hardware prerequisites, Mintlayer allows participation without high-end equipment; even a Raspberry Pi (small consumer pc) can run a full node.In addition, pools have limited growth capacities by design, ensuring no one can control the network with massive pools.
Embedded Tokenization: Mintlayer has built-in tokenization features, streamlining the process for users to create tokens. In contrast, on Ethereum, users must craft and deploy a smart contract in Solidity to produce tokens.
To learn more about What Makes Mintlayer Unique, check out our blog.
Mintlayer enhances the Bitcoin network by introducing new functionalities, ensuring seamless Bitcoin compatibility, and fostering growth through community engagement and investment.
Bitcoin Benefits:
Added Functionality: Mintlayer expands Bitcoin’s use cases by introducing tokenization, smart contracts, dApps and NFTs, functionalities that are currently very limited on the Bitcoin network.
Bitcoin Compatibility: The most substantial benefit Mintlayer brings to the table is the ability for Bitcoin holders to interact with decentralized finance and other applications directly via atomic swaps. This eliminates the need for wrapped tokens or token bridges, which have been the most prominent attack vector in DeFi.
Accelerate Bitcoin’s Growth: Ultimately, Mintlayer will strengthen the Bitcoin community by attracting developers and innovators that want to build tools that expand Bitcoin’s use cases. To help facilitate and accelerate this goal, we have developed the Mintlayer ecosystem fund, a partnership between the various stakeholders in crypto. The ecosystem fund provides direct investment, introductions to VCs, and mentorship to developers interested in Bitcoin.
To learn more about How Mintlayer adds value to Bitcoin, visit our Blog.
A sidechain is an independent blockchain designed to interact and complement a primary 'Layer 1' blockchain. For example, Mintlayer functions as a 'Layer 2' sidechain to Bitcoin, enabling advanced features and scalability while preserving the integrity and performance of the main Bitcoin chain.
Furthermore, sidechains create a space for the development of distinctive features and functionalities without necessitating any modifications to the primary Bitcoin protocol. This keeps the primary chain's integrity intact, while still allowing for innovation and progress in the blockchain ecosystem.
A common problem arises when most sidechains employ token bridges to generate wrapped tokens. This process exposes users to significant security vulnerabilities, as the token bridges are currently one of the most susceptible DeFi attack vectors. That's where solutions like Mintlayer's atomic swaps come in, offering a way to bypass these vulnerabilities while still enabling the benefits of sidechains.
Mintlayer and Ethereum share several features, such as enabling users to create tokens, NFTs and employing a proof-of-stake consensus mechanism. However, several important distinctions set these platforms apart.
Mintlayer, unlike Ethereum, is directly interoperable with Bitcoin, the largest pool of liquidity in cryptocurrency and the favored method of storing value.
From a technical standpoint, Mintlayer employs an unspent transaction output (UTXO) based accounting system, similar to Bitcoin, while Ethereum uses an account-based system. This UTXO model allows Mintlayer to process multiple transactions in parallel, boosting scalability and privacy.
Mintlayer's ML coins also have a fixed total supply which is deflationary long-term since some functions require ML to be burned, unlike Ethereum, which can increase its supply, potentially leading to inflation.
Mintlayer further differentiates itself by avoiding the need for token bridges or wrapped tokens, thus eliminating vulnerabilities that have led to significant losses in DeFi projects. This ensures that users can use Bitcoin natively, offering a frictionless route to tap into Bitcoin's existing liquidity.
MLS-01 is the main tokenization standard to help with the issuance of security tokens, stablecoins, and utility tokens. It features optional access control lists. Transactions can be limited according to rules set by the token issuer.
MLS-03 is for non-fungible tokens (NFTs). NFTs are unique tokens that allow users to tokenize art, collectibles, or even real estate. Learn more about the future use cases for NFTs on our blog.
Discover the full details on our tokenization standard in our Whitepaper
Mintlayer's Pulsar consensus works through a novel Proof of Stake (PoS) protocol designed specifically for its role as a Bitcoin sidechain. The system uses Verifiable Random Functions (VRFs) to determine block production eligibility, with pools generating random numbers that must fall below a threshold based on network parameters and the pool's stake size. This approach aims to produce a block every 120 seconds on average, with larger pools having a proportionally higher chance of being selected as block producers. Mintlayer employs a unique chain selection rule based on "chain density," choosing the chain with the most filled block slots rather than simply the longest chain or the one with the most accumulated stake or work.
To learn more read the full white paper here.
The Mintlayer Ecosystem Fund represents a partnership between developers, blockchain investors, and key stakeholders of the Mintlayer ecosystem.
Mintlayer offers both Accelerator and Incubator programs. These initiatives cater to a broad range of project stages, from early-phase startups needing comprehensive guidance to more seasoned teams ready to forge ahead with execution.
We also offer cryptocurrency grants to developers that wish to build tools that may not have a source of revenue generation.
If you're a developer looking to build or an investor looking to fund the best new projects head over to our Ecosystem page.
Early-stage projects are highly encouraged to apply to our ecosystem program.
In fact, we have an Incubator Program specifically designed to nurture and develop projects that are in their infancy.
We provide extensive mentorship covering areas such as team assembly, technical roadmap design, legal structure formation, marketing strategy development, and fundraising guidance. This program aims to transform your unique idea from the drawing board into a thriving DeFi project.
If you're considering applying to our Incubator Program, we encourage you to visit our Ecosystem page to submit your application.Decentralized Finance (DeFi) - refers to financial applications and services that are built on blockchain technology and operate in a decentralized manner, with no traditional intermediaries, such as banks and financial institutions.
The Mintlayer Incubator Program is an initiative designed to support and nurture early-stage projects within the blockchain industry. It is a structured program that provides funding as well as invaluable assistance in crucial areas such as business strategy, software development, tokenomics, funding, and overcoming legal hurdles.
If you have a unique idea, the program aims to guide you in bringing it from conception to the stage of a thriving business.
The Mintlayer Ecosystem Fund primarily invests in projects that bring something innovative to the ecosystem, with most investments ranging from $50K-$200K. This coupling of mentorship and the potential for additional funding makes the incubator program a perfect launchpad for blockchain projects in their early stages.
If you're considering applying to our Incubator Program, visit our Ecosystem page to submit your application
The Mintlayer Accelerator Program is designed to port existing projects to Mintlayer or to boost existing projects to the next level. The program is specifically geared towards projects that already possess a clear idea and a concrete roadmap, ready for immediate execution.
Participants in the program can expect to be connected with a robust network of angel investors and venture capitalists. This rich networking opportunity aims to bridge the gap between project founders and potential investors. Additionally, the program provides a network of advisors for high-level strategic planning, enabling teams to benefit from expert advice and guidance.
If you're considering joining our Accelerator program, visit our Ecosystem page to submit your application.
Yes, Mintlayer also offers grants. Our cryptocurrency grants initiative is devoted to supporting free and open-source development within the Mintlayer ecosystem. We particularly encourage applications from projects that can add value to our ecosystem but do not involve issuing a premined token or generating a revenue stream.
The types of projects we aim to support include:
- Wallets that incorporate the Lightning Network
- Block explorers
- Analytics tools
- Developer tools
- Educational resources
If you have an innovative idea that you believe could benefit the Mintlayer ecosystem, we strongly encourage you to apply for a grant. You can submit your application via our Ecosystem page.Open source - Software whose code is available for everyone to see, modify, and use.premined token - refers to a cryptocurrency or token that is set aside or reserved for specific purposes or stakeholders, such as founders, advisors, or partnerships, before it's publicly available.A block explorer is an online tool that allows users to view and search transaction details, balances, and the history of individual blocks within a blockchain.
The Mintlayer Utility Coin (ML) serves as the lifeblood of the Mintlayer network, maintaining its security and functionality. The ML coin has three critical roles:
Staking: ML coin holders can partake in the blocksigner auction to stake coins and become a blocksigner for a week. By running a node, holders can collect transaction fees and rewards from the blocks they sign, thereby validating financial activity.
Community Engagement: ML coin holders are encouraged to contribute to the decision-making process, sharing their views on the protocol's future development.
Ecosystem Tools: The network incentivizes users to use ML coins to pay for fees, exclusive services, and products within the protocol.
Although you can use ML coins to pay fee’s Mintlayer's design allows it to operate without a specific gas token or coin. What this means is transaction costs can be paid by ML coins or any MLS token that is accepted by the block producer.
You can learn more about the ML Coin’s utility on our blog and the tokenomics on the ML Coin page.
The initial unlocked coin supply is set to 15,820,000 ML. At launch of the mainnet, 400,000,000 ML was created. 200,000,000 more ML will be available in the form of block rewards until the 600,000,000 ML hard cap, expected to occur approximately 10 years after the genesis block.
Various network operations, such as minting an MLS-01 token, require the burning of a certain amount of coins. As a result, the total supply of ML tokens decreases over time, creating a deflationary economic model in the long term.
To understand more about the ML coin supply head to ourML Coin page.
Mintlayer's ML coins are used for the proof-of-stake consensus mechanism the Mintlayer blockchain is built on.
ML coins serve various other purposes, evolving with the development of the ecosystem.
3 Phases of ML Coin Utility
The utility of ML coins unfolds across three phases.
1.In the Testnet phase which has already passed, ML coins were available for developers and the public, enabling them to purchase services from RBB Lab, sponsor the ecosystem fund, and accumulate enough coins for staking once the mainnet launches.
2. In our current Mainnet phase, ML coins are necessary for all transaction fees and executing smart contracts. Users can stake ML coins to participate in the consensus mechanism and earn block rewards.
3. The third phase in the future, Decentralized Finance Utility, sees ML coins continue as the native coin of the expanded DeFi ecosystem..
For the complete and in-depth understanding of the utility of ML coins, please read the full article at the Mintlayer blog.
Mintlayer's ML coins can be obtained from several major exchanges, including Gate.io, MEXC, Bitmart, Poloniex, Bitget, and BingX. If you're interested in acquiring ML coins, you'll need to create an account with these platforms.
At present, Mintlayer has not distributed any coins to DeFi exchanges. However Atomiq DeFi is working on the Atomiq DEX which will enable ML coins to be swapped directly with Bitcoin, Stable coins and any MLS-01 tokens.
Originally, prior to the launch of our Mainnet, we decided to launch the original token on Ethereum. Since the Mainnet launch, we have begun to migrate ML over to Mintlayer mainnet and are slowly phasing out the Ethereum version of the token.
If you still have ML as an ERC20 token, we highly suggest you migrate your tokens from ERC20 to Mintlayer Mainnet coins via our migration portal. The ERC20 version of ML will still be available but will be phased out, with the migration portal open until January 2026.
Currently, the only non-custodial light-wallet (a wallet that doesn’t require to download, store and validate the whole network) that can hold native ML coins is the Mojito Wallet. Mojito can store ML coins, MLS-01 tokens, and Bitcoin. Additionally, you can hold native ML on exchange wallets with Gate.io, MEXC, and Bitget, which are Mintlayer Mainnet compatible.
Alternatively, if you have the ERC-20 version of ML (Note: we are phasing out the ERC20 version), you can use any ERC20 wallet available like MetaMask or Trust Wallet. Some other exchanges which haven't added Mintlayer Mainnet compatibility, such as Bitmart, Poloniex, and BingX, allow you to store ML within their exchange wallets.
However, remember that only native ML coins can be staked using the Mojito wallet and Mintlayer block explorer.
First you must have the Mintlayer Mainnet native ML coins to be able to delegate your coins. After you have acquired the coins you need to move them to Mojito Wallet Wallet Browser Extension or Mobile app. Once you have the coins on the app you can head to the Mintlayer blockexplorer and choose a pool to delegate to. For more information head to the Mintlayer Staking page.
For maximum returns and control, you can manage your own ML staking pool. This option offers the highest APY and requires your active involvement in network operations. You'll need a minimum of 40,000 ML and must run your node 24/7—ideal for those deeply engaged in network governance.
To get started, download the Node GUI and set up your pool within the application. If you encounter any difficulties, please join our Node Operators Telegram channel, where you can receive direct assistance from other node operators and our team members.
Yes, ML coin can be used to pay transaction fees on the Mintlayer blockchain. However, we are currently investigating the possibility to allows users to pay fees with ML coin or any MLS-01 token that a blocksigner will accept. This means that users will have the flexibility to choose ML or whichever MLS-01 token they want to use for transaction fees, rather than being limited to only using ML coins.
It is worth mentioning that this adaptability is based on a free-market approach. This will allows for a more diverse and flexible fee payment system on the Mintlayer blockchain.
To learn more about the uses and benefits of ML coins, visit the Mintlayer coin utility post on our blog.