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Bitcoin Layer-2 developers propose BTCFi as the forthcoming solution for institutional access.
Executives from Citrea, Rootstock Labs, and BlockSpaceForce contended that the scaling layers of bitcoin focus more on transforming the asset into a programmable financial base layer rather than merely increasing throughput.
Bitcoin layer-2 builders at Consensus Hong Kong 2026 (CoinDesk)
What to know:
- On Thursday, bitcoin layer-2 developers asserted that the forthcoming stage of cryptocurrency development will not focus on replacing bitcoin as “digital gold,” but rather on enhancing its utility.
- During Consensus Hong Kong 2026, executives from Citrea, Rootstock Labs, and investment firm BlockSpaceForce maintained that the scaling layers of bitcoin prioritize creating a programmable financial base layer rather than merely increasing basic throughput.
Hong Kong — Bitcoin layer-2 developers asserted on Thursday that the next stage of cryptocurrency development will not center on substituting bitcoin as “digital gold,” but on increasing its functionality.
During Consensus Hong Kong 2026, executives from Citrea, Rootstock Labs, and investment firm BlockSpaceForce maintained that bitcoin’s scaling layers focus more on transforming the largest cryptocurrency into a programmable financial base layer rather than just enhancing its raw throughput.
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“The primary objective is to render Bitcoin a productive asset,” stated Gabe Parker, head of business development at Citrea, a zk-rollup built on Bitcoin. He emphasized that Bitcoin’s base layer was not designed for expressive smart contracts. “It’s about integrating existing concepts like DeFi, lending, and borrowing, and adding that framework to Bitcoin… It’s more about programmability than scaling.”
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Diego Gutierrez Zaldivar, CEO of Rootstock Labs, highlighted that the industry’s focus on the term “layer two” overlooks the essential points.
“Layer one serves as a store of value. Layer two functions as an economic coordination layer… and layer three acts as a scaling layer that facilitates payments,” Gutierrez Zaldivar explained. “We should begin discussing networks that serve as economic coordination layers.”
Panelists noted the growing institutional interest in bitcoin-backed lending and yield strategies. “Bitcoin has matured into a macro financial asset that many wish to hold,” remarked Charles Chong of BlockSpaceForce. “The next breakthrough is to construct a financial system around it.”
However, trust assumptions remain a critical aspect of the discussion. Parker from Citrea critiqued the dependence on centralized custodians behind wrapped bitcoin products on Ethereum. “If you examine what secures wrapped bitcoin, it’s merely a three-to-five multisig,” he stated. “That framework is not scalable. To manage hundreds of billions or trillions, protocol-based assumptions are necessary, not counterparty-based ones.”
Nonetheless, institutions are proceeding with caution. “On one hand, they can collaborate with regulated counterparties and have legal recourse in a centralized manner,” said Chong of BlockSpaceForce. “On the other hand, they can engage in BTCFi on a permissionless basis, but in that scenario, they are relying on protocol governance while assuming smart contract risks. Considering this, many institutions are likely to choose the former option at this point.”
Gutierrez Zaldivar from Rootstock Labs suggested that hybrid compliance models might help bridge this divide temporarily, but stressed that the long-term vision extends beyond this.
“For Bitcoin to gain significance globally, it must be more than just a store of value,” he asserted.
For advocates of Bitcoin’s scaling, the hope is that even a fraction of bitcoin entering decentralized finance could transform both the network and global markets in the coming years.
Read more: As DATs Face Pressure, Institutions Could Soon Look to BTCFi for Their Next Strategic Shift
