SatLayer: Secure the Future, Earn Rewards

Wednesday, April 30, 2025

You own Bitcoin, the world’s most secure and valuable cryptocurrency, but it’s just sitting in your digital wallet, not doing much beyond holding value. What if there’s a way to make your Bitcoin work for you - earning extra rewards, powering exciting new apps, and making the internet safer - without giving up control of your money?

That’s what SatLayer does. It is a Bitcoin restaking platform built on Babylon Labs’ protocol and designed to leverage BTC as the primary security collateral for decentralized applications and protocols.

SatLayer operates as a set of smart contracts deployed on the Babylon Chain, enabling Bitcoin holders to stake or restake their BTC (or Bitcoin-based assets like WBTC) to secure Bitcoin Validated Services (BVSs). These decentralized applications utilize Bitcoin’s security through SatLayer, offering full Turing-complete programmability with minimal trust assumptions.

SatLayer addresses several key challenges in the Bitcoin ecosystem:

1. Underutilized Bitcoin Security - Bitcoin has immense economic security, but is primarily confined to store-of-value use cases. SatLayer enables BTC to serve as collateral for securing BVSs, extending its security to dApps and protocols beyond simple PoS chains
2. Lack of Programmability - Bitcoin’s scripting language is not Turing-complete, limiting its ability to support complex smart contracts or DeFi applications. SatLayer provides a Turing-complete environment where developers can build programmable dApps backed by Bitcoin’s security
3. Idle Bitcoin Capital - Many Bitcoin holders cannot earn yield on their assets without sacrificing custody or liquidity. SatLayer’s restaking mechanism allows holders to stake or restake Bitcoin (or Bitcoin-based assets like LBTC) to earn rewards from BVSs, making BTC a productive asset while maintaining security
4. Fragmented DeFi - Bitcoin DeFi has been limited by trust assumptions and reliance on centralized solutions or sidechains. SatLayer offers a trust-minimized, modular security layer, enabling interoperable and decentralized Bitcoin-native DeFi ecosystems
5. Scalability for Bitcoin-Backed Services - Traditional Bitcoin scaling solutions (e.g., Lightning Network) focus on payments, not general-purpose dApps. SatLayer supports a wide range of Bitcoin Validated Services (BVSs), from rollups to oracles, by leveraging Bitcoin’s security in a scalable, flexible framework

SatLayer’s use cases leverage its ability to extend Bitcoin’s security to decentralized applications (BVSs) through restaking on the Babylon Chain. Here are some of the primary use cases:

• Decentralized Oracles - SatLayer supports oracles that provide real-world data to Bitcoin-backed smart contracts, enabling use cases like price feeds for DeFi, prediction markets, or automated financial instruments
• Cross-Chain Interoperability - By integrating with projects like Sui and Flamma, SatLayer facilitates trust-minimized bridges and cross-chain interactions, allowing Bitcoin to secure applications across different blockchains
• Reward-Bearing Assets - Through partnerships with Lombard Finance, SatLayer supports assets like LBTC, which provide liquidity and staking rewards, enabling Bitcoin holders to participate in DeFi without sacrificing custody or liquidity

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