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Layer-1 blockchain network Tron, is working on a Bitcoin Layer-2 solution that will support a “wrapped” version of Tether and potentially allow billions of dollars in liquidity to flow into the Bitcoin ecosystem. In February, Tron‘s founder Justin Sun revealed a roadmap for Tron’s Bitcoin Layer-2 solution in a tweet; this solution will enable the movement of stablecoins and tokens between Tron and Bitcoin.
Tron Team’s Noteworthy Move
According to Sun, this integration will not only directly connect TRON to Bitcoin, but also facilitate access to over $55 billion in value, thereby injecting financial vitality into Bitcoin. A Tron spokesperson discussed the plans, likely including the creation of a wrapped version of USDT. Tron’s network currently hosts over half of the $104 billion of USDT issued across multiple blockchain networks.
The integration is expected to attract new users to the Bitcoin ecosystem and particularly expand the network’s use cases in the decentralized finance sector. Sun stated that the Bitcoin Layer-2 solution would allow TRON-based tokens to interact and work seamlessly with Bitcoin.
Tron spokesperson mentioned that the plan is still at the concept stage but is likely to proceed. For now, the firm will utilize existing cross-chain protocols to bridge USDT and other tokens between Bitcoin and Tron. Part of Tron’s plan also involves collaborating with various Bitcoin Layer-2 protocols.
Notable Details on the Process
USD Coin, a stablecoin rival to Tether, may be a different story due to issuer Circle halting USDC minting on Tron in February. A Tron spokesperson said that the recent increase in community interest in expanding Bitcoin’s functionality and scalability was one of the main reasons for considering a Layer-2 solution. They added that developing decentralized applications on Bitcoin, with fees in Bitcoin, could potentially improve Bitcoin’s price dynamics as well.
Meanwhile, Tron’s decentralized autonomous organization, TRON DAO, is also working to create a user-friendly wallet and toolset to support Bitcoin-based Ordinals and BRC-20 tokens. In January, cryptocurrency investment firm CoinShares predicted that a Bitcoin-based stablecoin could emerge in 2024, potentially competing with other stablecoins in speed and cost.
