Bitcoin Virtual Machine (BVM) is a fast-growing L2 protocol on Bitcoin. It allows users to create their own layer 2 networks and drives the value of the native BVM tokens.
Developers told CoinDesk that the team is planning “juicy” airdrops for BVM stakers, which could boost demand for the tokens.
Bitcoin Virtual Machine, a protocol founded in late February, is gaining popularity among traders betting on the overall growth of the Bitcoin ecosystem, driving demand for its BVM tokens.
Data shows that the project’s BVM tokens added 35% in the past 24 hours, outpacing an overall market decline. The CoinDesk 20 Index fell 5.3% over the same period. The tokens have risen from 20 cents on March 8 to $3.5.
The project allows users to set up their own layer 2 networks on the Bitcoin blockchain. Bitcoin and Ethereum are known as layer-1 protocols, and attempts to scale and extend them are layer-2 protocols. While the Ethereum ecosystem has had several layer 2 projects aimed at providing faster, cheaper transactions for years, the Bitcoin version only really took off in 2023 after the introduction of the Ordinals technology.
The value proposition for the token is determined by rewards for BVM holders and a reduction in fees generated by the service, developer @punk3700 told CoinDesk in a direct message interview on X.
“We have 40%-50% circulating shares from our holders. I’m working on some airdrop deals for BVM strikers,” said @punk3700. “Some of them can be quite juicy.”
On Friday, the team said that Naka Chain, a Bitcoin layer-2 build on BVM, will airdrop 10.5 million tokens to BVM token stakers. The airdrop is proportional to a user’s stake and is locked for three months.
Tokens based on the Bitcoin blockchain first began to emerge as an investment thesis in mid-2023, led by Ordinals technology and BRC-20 tokens.
The BRC-20 standard (BRC stands for Bitcoin Request for Comment) was introduced in April and for the first time allowed users to issue transferable tokens directly over the network. The tokens, called inscriptions, function according to the Ordinals Protocol. That protocol allows users to embed data into the Bitcoin blockchain by writing references to digital art in small Bitcoin-based transactions.
@punk3700 previously told CoinDesk that the use of bitcoin in decentralized finance (DeFi) applications has so far been limited to tokenized representations of bitcoin on other chains, such as Ethereum or Solana, but that a gap exists for wealthy bitcoin holders to use their assets on native platforms. applications, fueling the investment thesis.
The BRC-20 tokens have a cumulative market cap of $3.5 billion as of Friday, CoinGecko data shows.