What Is BOB (Build on Bitcoin)? A Guide to the First Hybrid Bitcoin Layer 2 Stack

We are witnessing the emergence of several new Bitcoin layer-2 protocols that aim to bring new features and functionalities to Bitcoin while helping to address the Bitcoin network’s scalability challenges. Build on Bitcoin (BOB) is one of the latest entrants in the Bitcoin layer-2 market. 

Read on to learn more about Build on Bitcoin (BOB) and what it brings to the Bitcoin ecosystem. 

What is BOB?

BOB or Build on Bitcoin is a Layer-2 (L2) protocol that scales Bitcoin by leveraging the Ethereum Virtual Machine (EVM), enabling developers to write expressive Solidity smart contracts that can power decentralized applications. 

Besides EVM compatibility, BOB leverages OP Stack, a framework developers can use to build rollups and blockchains with ease. Optimism, Ethereum's L2 scaling solution, develops the framework. 

What Is the Vision for BOB? 

BOB is a programmable layer for DeFi protocols on Bitcoin, launching its mainnet in April 2024 alongside the Bitcoin halving.

Encourage Innovation

BOB is a protocol where developers can pioneer innovation and experimentation in diverse areas, such as rollups, AI, DAOs, DeFi, NFTs, and entertainment, aiming to unlock more use cases on Bitcoin and attracting a larger user base. 

BOB encourages innovation on Bitcoin while giving users access to various Bitcoin values such as immutability, robust security, scarcity, decentralization, and portability. 

Furthermore, BOB seeks to ensure that projects built on it can also be deployed on other chains and rollups.  

Improving Economical Sustainability Through Rollups

BOB plans to secure its rollup layer with merged mining, allowing miners to earn additional rewards. 

Rollups are scaling solutions that process transactions off-chain to alleviate congestion on the mainchain. They also compress transactions into batches before submitting them to the base layer for final settlement. The batched transactions occupy less block space, thereby improving storage efficiency. 

While BOB is focused on rollups, it is open to other scaling technologies that make their way to the Bitcoin ecosystem.

Seamless Interaction Between Bitcoin and Ethereum

BOB wants to make it easy for users to seamlessly interact with Bitcoin and Ethereum so they can benefit from Ethereum’s innovation and Bitcoin’s robust security. 

To achieve this goal, BOB is developing trustless bridges that will enable interactions between the two L1 blockchains and unified asset management for EVM assets and BTC. 

Also, BOB will have a bridge that relays information across the two chains, allowing EVM contracts to access Bitcoin transaction data needed to process peer-to-peer swaps directly between Bitcoin mainnet and BOB, such as selling an inscription on Bitcoin for USDC on BOB.

How Does BOB Work?

BOB is a unique Layer-2 network built on Bitcoin and connected to Ethereum. Here are the descriptions of its different components. 

Merged Mining

BOB will inherit Bitcoin’s security through merged mining, a process that allows Bitcoin miners to secure a Layer-2 protocol using the same resources. 

In other words, merged mining entails securing two or more protocols using the same hardware simultaneously. 

Bitcoin layers can then leverage the hashing power of the base layer to improve their security. BOB will introduce merged mining in the second phase of development.

Rollup Layer

BOB will kickstart operations with an Optimistic rollup layer developed on OP Stack but will later upgrade to zero-knowledge (ZK) validation. 

Optimistic rollups assume transactions are valid until proven otherwise through fraud proofs, while ZK rollups use validity proofs to confirm the accuracy of a transaction. Furthermore, Optimistic rollups post all transactional data to the base layer for final settlement, while ZK rollups only submit the validity proofs to the mainchain for settlement.

Although BOB is built on Bitcoin, the OP Stack rollup settles on Ethereum. BOB will add merged mining security to the rollup layer in the future, enabling Bitcoin miners to validate it. 

BOB allows users to access Ethereum assets and liquidity easily by adopting OP Stack. Moreover, the rollup layer is enhanced with the Risc Zero zkVM, improving transaction privacy and efficiency.

The OP Stack-powered rollup layer will feature account abstraction, permitting users to on-ramp from the Bitcoin blockchain and use their BTC to pay transaction fees. 

In the future, BOB will transition to become a rollup directly on Bitcoin once BitVM is ready.

Bridges

BOB will support several Bitcoin bridges, enabling Bitcoin-Ethereum interactions and unified asset management. This feature will allow users to transfer ETH from Ethereum to BOB and vice versa. 

Another type of bridge on BOB will allow EVM smart contracts to access the transactional and block data needed to process BTC transactions like P2P swaps. A P2P swap on BOB will allow users to buy or sell Ethereum assets or bridged versions of BTC. 

For instance, the Layer-2 network will soon allow users to purchase and sell Ordinals and BRC-20 tokens on testnet using the Xverse wallet. Users can also inscribe Ordinals on BOB testnet using their Xverse wallets.

BOB will also have an ETH L1/L2 bridge for accessing wrapped versions of BTC like wBTC and tBTC v2. Later in its development journey, the network will have a BTC bridge powered by BitVM, a computational engine that enables complex and expressive Bitcoin smart contracts.

Smart Contracts

BOB is EVM-compatible, enabling developers to build Bitcoin-secured decentralized applications with the Solidity programming language. EVM smart contracts are expressive and complex and can help promote innovation on Bitcoin. 

Additionally, this EVM compatibility means BOB supports existing Ethereum wallets, block explorers, data analytics platforms, and developer tools like Remix and Hardhat. 

What’s Next for BOB?  

At the time of writing, BOB is at the public testnet stage of development, where anyone can test asset bridging, P2P swaps, and inscribing. 

For example, you can sell your Ordinal inscription for an ERC-20 token by visiting the BOB testnet app and connecting your Xverse wallet.

Alternatively, you can wait for BOB to launch on the mainnet to access these products. 

BOB will roll out new features in five stages in the coming months. The first stage will introduce an Optimistic ETH rollup, giving Bitcoin users access to Ethereum assets. 

After this, BOB will enable merged mining to adopt Bitcoin’s security, upgrade from Optimistic rollups to ZK validation, introduce BTC-staked sequencers, and launch a multi-ZK rollup connected to BTC and ETH.

Xverse: Your Gateway to Web3 Built on Bitcoin

Xverse is at the forefront of streamlining the Web3 experience for Bitcoin users, supporting Bitcoin (BTC), Ordinals, Runes, BRC-20 tokens, and Rare Sats. This means users can interact with different products within the Bitcoin ecosystem from a single, easy-to-use interface. 

In the future, Xverse plans to add support for Bitcoin layers like Lightning and Build on Bitcoin (BOB), in addition to Stacks, giving users access to everything the Bitcoin ecosystem has to offer. 

Click here to download Xverse for Android, iOS, or Chrome.