Executive Summary

Ligo Layer 2 seeks to resolve significant challenges faced by the Bitcoin network by introducing a second-layer solution designed to enhance scalability and reduce transaction fees. This initiative in

Since 2023, with the rise of Ordinals theory, the BTC ecosystem has regained user attention. A large number of users have begun to return to the BTC ecosystem, leading to a sharp increase in transaction volume on the BTC chain. Subsequently, based on the Ordinals theory, some innovative protocols along with relevant products have appeared on the Bitcoin network. These include BRC-20, Bitcoin NFT, BIP300, Brc-20 DEX etc. The innovation of these protocols has ultimately extended to the Bitcoin network, creating unlimited potential for the future development of the Bitcoin ecosystem.

However, as we all know, the Bitcoin network has certain issues, such as poor scalability, high transaction fees, and the absence of a Turing Complete virtual machine, among others. Besides the inherent problems of Bitcoin, the greatest issue with BRC-20 and other new Bitcoin protocols is their centralization. They rely on the computation and indexing of centralized servers. These new Bitcoin protocols exhibit disadvantages such as being centralized, susceptible to censorship, private, and unverifiable, among other issues. It is currently impossible to build a completely decentralized Web3 application based on the present state of the BTC chain. There is an urgent need to expand Bitcoin protocols in a decentralized manner and build a decentralized infrastructure for a new era of Bitcoin.

At this time, BTC Layer2 Ligo has been created. Ligo’s vision is to build a truly decentralized infrastructure for the Bitcoin ecosystem. This will enable all Bitcoin-Layer2 based DApps to run quickly, efficiently, and safely in a decentralized manner, without relying on a centralized server. Most importantly, Ligo L2 is compatible with the Multi-VM and other blockchain DApp ecosystem. This compatibility will afford BTC Layer2 great scalability and impressive liquidity.

The goal of Ligo Layer2 is to address the centralization of the current Bitcoin extension protocols, as well as BTC poor scalability, high transaction fees, and the absence of a Turing Complete virtual machine in the Bitcoin network itself. LIGO Layer2 will implement the BVM, Parallel Python VM (which outperforms parallel EVM solutions) to enhance Bitcoin's scalability. It aims to run Bitcoin L2 in a decentralized, cost-efficient, effective, and Turing Complete manner, which will help Bitcoin build a much larger decentralized ecosystem and attract more users to participate. Ligo Layer2 intends to allow the currently popular protocols like Inscriptions, Ordinals, BRC-20, Bitcoin NFT, ORC-20, and others to obtain decentralized support, eliminating the need for the assistance of centralized mechanisms off the Bitcoin network. This approach is much safer and more reliable.

In 2025, plan to migrate to the Mojo VM, as Ligo V2, for unifying the global AI and Wnciples. The following chapters will present Bitcoin Layer2 from the perspectives of Current Problems, Design Philosophy, and Underlying Architecture.