Bitcoin Base Layer Receives Smart Contracts and DeFi Support With BRC2.0 Upgrade

The Bitcoin network has received a major upgrade in BRC2.0 that has enabled Ethereum-like smart contract functionality on its base layer. The upgrade has introduced Ethereum Virtual Machine (EVM) compatibility into BRC-20’s core indexer system, allowing for smart contracts to be deployed on Bitcoin. 

Developers Can Now Run Smart Contracts on Bitcoin 

The BRC-20 token protocol on the Bitcoin network has just completed its most significant upgrade to date, named BRC2.0. The upgrade, which was activated at block height 912,690, directly brings Ethereum-like smart contract functionality to the Bitcoin network. 

With this upgrade, developers on the Bitcoin network can now directly build decentralized applications (dApps). They can also directly deploy smart contracts on the Bitcoin network without using bridges or external platforms. 

Infrastructure company Best In Slot developed the BRC2.0 upgrade in partnership with the pseudonymous creator of BRC-20, Domo, and the Layer 1 Foundation. They implemented EVM functionality into the indexer of the protocol that tracks metadata of BRC-20 assets. 

Eril Binari Ezerel, the CEO of Best In Slot, explained that the implementation of Bitcoin meta-protocols like Ordinals, Runes, and BRC20 will enable indexers to operate the same way simple calculators do. Thanks to the upgrade, BRC-20 tokens on Bitcoin can now be connected to EVM-compatible tools to create composable use cases like we have on Ethereum.

Now, developers are able to create dApps that use Bitcoin as a secure base layer but operate with Ethereum’s standards for smart contracts.

The Next Step for the Bitcoin Network

The upgrade aims to expand the functionality of the Bitcoin and BRC-20 tokens. Since the BRC-20 token standard launched on the Bitcoin network, it has recorded over $3 billion in asset volume. However, most of this value has come from meme coins and speculative assets because of the limited programmability of the Bitcoin network.

With support for smart contracts and dApps, Bitcoin can now be used as more than a store of value, while Bitcoin tokens launched on the network can evolve from just meme coins into programmable assets that can support financial applications.

The BRC2.0 upgrade positions the Bitcoin network to directly support decentralized finance, lending, modular applications, and trading on its base layer. By adding a DeFi ecosystem, Bitcoin can now compete with other programmable blockchains like Ethereum, Solana, and others. 

Ethereum Standard Smart Contracts With Bitcoin’s Security 

One of the biggest advantages of BRC2.0 is that it brings Ethereum-standard smart contracts while offering native smart contract support within Bitcoin’s ecosystem. It means that Bitcoin can now serve as the most decentralized and safe network to EVM, which is the largest virtual machine.

BRC-20 creator Domo explained that the reason for the upgrade is to give Bitcoin users the experience of Ethereum composability and programmability but with the highest level of security that Bitcoin offers. The inclusion of EVM into BRC2.0 is a new dawn in the history of Bitcoin, and it could lead to a change in priorities in favor of practical use over speculation.

Ethereum has benefited from the rise of liquid staking protocols like Lido and stablecoins. With Bitcoin offering more security, the launch of these kinds of protocols on the network could make Bitcoin more than just digital gold.