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In this exclusive interview, we speak with Alexei Zamyatin, co-founder of BOB, a groundbreaking hybrid Layer-2 that combines Bitcoin's unparalleled security with Ethereum's DeFi innovation. With over a decade of blockchain experience and research contributions to deploying smart contracts on Bitcoin, Alexei shares his insights on the evolution of Layer-2s, the potential of Bitcoin in DeFi, and what the future holds for blockchain technology. From addressing the ZK rollup debate to outlining the vision for trust-minimized BTC liquidity, Alexei provides a comprehensive look at how BOB aims to revolutionize financial systems.
Can you explain the core vision behind BOB and how it leverages the strengths of Bitcoin and Ethereum to support a new model for DeFi?
BOB is a hybrid layer-2 blockchain that combines the strengths of Bitcoin and Ethereum to create the ideal home for Bitcoin DeFi. With many years of experience working on Bitcoin scaling and DeFi, we saw what was needed to position Bitcoin at the heart of DeFi, leading to the development of BOB — a unique hybrid L2 that fuses Bitcoin’s security with Ethereum’s DeFi innovation.
BOB’s hybrid model inherits Bitcoin finality from billions of dollars of Babylon staked Bitcoin, uses BitVM for trustless BTC deposits from the L1, and integrates Ethereum’s EVM capabilities for innovation, ease of use and builder-friendliness.
Our vision is to place Bitcoin at the heart of a new DeFi model. Bitcoin has the scale, the brand, and the trust that will allow it to open up access to DeFi innovation to retail and institutional users who have previously been reluctant to engage in the novel technology for regulatory or risk reasons.
Can you explain what BitVM is and how it works?
BitVM is a revolutionary system that enables complex computations and smart contracts to be secured by the Bitcoin blockchain. This unlocks new levels of utility and scalability for BTC, without compromising the network's security.
Having co-authored the latest BitVM2 technical paper, our core objective is simple — to enhance Bitcoin's capacity while preserving its core code and fundamental principles, including decentralization and censorship resistance. At BOB, we recently achieved a major BitVM milestone: our BitVM bridge is live on the BOB testnet ahead of a mainnet deployment in the coming months.
The way it works is by allowing you to execute programs on Bitcoin in an optimistic manner. The execution happens off-chain and any disputes are then resolved and enforced on-chain via ZK proofs. This gives BitVM bridges a far superior security model. The L2 verifies Bitcoin, Bitcoin verifies the L2.
They are trust-minimized and BTC deposits cannot be stolen as long as there is a single honest node in the network. This node can even be the depositor themself. Under correct operation, the bridging process completes in less than one hour each way, which is much faster than any existing Ethereum L1 or L2 bridges to Bitcoin.
What recent announcements have BOB made to support the goal of becoming the home of Bitcoin DeFi?
BOB has made significant strides in expanding its Bitcoin DeFi ecosystem since the start of this year through several key partnerships and developments. BOB introduced a Hybrid BTC yield product that allows BTC holders to explore enhanced yield opportunities across Ethereum and other chains direct from BOB. To further advance trust-minimized Bitcoin DeFi, BOB also launched its BitVM-powered Bitcoin bridge on public testnet, removing the need for centralized bridges and ensuring secure, non-custodial Bitcoin transactions. BOB also integrated with Fireblocks to strengthen institutional access to Bitcoin DeFi by merging Fireblocks’ secure wallet infrastructure with BOB’s network. And finally, leading Bitcoin wallet, Xverse, integrated BOB’s 1-click Bitcoin DeFi into their Xverse Earn platform, giving 1m+ Rune, Ordinal and BTC holders seamless access to Bitcoin yield on BOB.
Can you expand on the opportunities Bitcoin DeFi offers retail and institutional investors?
2024 marked a transformative year for Bitcoin, where its potential became more widely recognized and embraced. We saw an increase in institutional investment and the approval of Bitcoin spot and futures ETFs. These milestones accelerated Bitcoin’s maturation and provided greater legitimacy to users. However, 2024 was just a preview of what’s to come, making way for Bitcoin-focused DeFi to unlock Bitcoin’s almost $2T market cap. With unmatched security, global recognition and trust, improved UX, and security innovations, Bitcoin is well-positioned to bridge the gap for retail and institutional investors who are still somewhat wary of DeFi. There is huge potential to come in 2025, with DeFi currently accounting for just 0.2% of BTC's market cap compared to 35% for ETH. BOB’s mission is to close that gap.
Security is often cited as a barrier for Bitcoin’s integration into DeFi. How does BOB’s Hybrid L2 design address these concerns?
Now Babylon has launched their mainnet, BOB can complete the integration and become a Bitcoin Secured Network (BSN), inheriting Bitcoin finality from billions of dollars of Babylon staked Bitcoin. This will then mean that all transactions on the BOB network are secured by Bitcoin, the most robust, decentralized and censorship resistant of all blockchains. In addition, with our BitVM powered Bitcoin bridge due to land on the BOB mainnet in the coming months, it will be possible for retail and institutional users to deposit native BTC into DeFi positions on BOB without needing to trust a third party. This will dramatically improve the security of on and off ramp transactions compared to all existing custodial or multisig bridges. Ultimately, if Bitcoin breaks then, so does our industry as a whole so it makes all the more sense to use Bitcoin security for cross-chain DeFi.
How has BOB evolved since its launch as an Ethereum L2, and what key developments have enhanced Bitcoin DeFi on the network?
BOB launched as an Ethereum L2 in May last year, built with the OP Stack. In 2024, our primary focus was on improving Bitcoin UX in DeFi, for example through the launch of BOB 1-click BTC DeFi. This enables users to deploy native BTC into dozens of products, including LSTs and DeFi vaults - only requiring 1 BTC transaction.
Our most important recent developments were adding a Bitcoin finality protocol to the ETH L2 setup and successfully testing a BitVM Bitcoin bridge. This will result in better security, trust-minimized BTC bridging, and faster withdrawals on the native ETH bridge — accelerating the growth of Bitcoin DeFi on BOB. This will enable Bitcoin DeFi to become truly decentralized, putting BTC at the heart of a new financial ecosystem and giving institutions the confidence to deploy their large holdings.
What key developments or challenges do you anticipate for the growth of Bitcoin DeFi and Bitcoin-secured networks (BSNs) like BOB in 2025?
We have only seen the first wave of Bitcoin DeFi in 2024. Simply put, teams only started building. In 2025 all of these products will start going live, and we should see an influx of Bitcoin Secured Networks (BSN) like BOB. This will further boost the growth of Bitcoin liquid staking, making way for a strong flywheel effect for Bitcoin liquid staking token liquidity.
The more BTC LSTs are used in DeFi on BOB, the more fees are generated. As a BSN, a percentage of these fees are shared back with BTC stakers meaning more yield on staked BTC – that in turn attracts more BTC into staking. The risk-free return rate on BTC is almost 0 otherwise. This again brings more liquidity into BOB, more fees, and so on.
In addition, we want to see BitVM go to mainnet, which will significantly improve the security of Bitcoin L2s and wrapped BTC assets including BTC LSTs. While it will take more than 2025 for BitVM really to show effect, as building trust takes time, the fact that we finally have solved BTC bridges/L2s will be a big factor in growing BTC DeFi.
