On April 9th, the Bitcoin Layer 2 network Mezo completed a $21 million Series A financing round, led by Pantera Capital, with participation from Multicoin, Hack VC, Draper Associates, and others. The rapid development of “Inscription” has promoted the prosperity of the BTC ecosystem, but it has also intensified the competition for BTC network resources. The high gas fees are continuously increasing the entry barriers for BTC ecosystem players.
The demand for Layer 2 is urgent, and various Layer 2 projects are attracting attention from the community and investors. Many BTC Layer 2 projects prioritize the needs of Bitcoin miners rather than the needs of users. However, Mezo prioritizes the economic needs of users and Bitcoin holders and proposes the concept of the Bitcoin economic layer. In order to achieve this vision, Mezo focuses on long-term HODLers who are active in the BTC ecosystem.
The Mezo team has stated, “We want to ensure that people who own Bitcoin can truly operate on this chain.” To achieve this, Mezo provides incentives for users who contribute to the security of the Bitcoin network to ensure that they continue to hold Bitcoin. The team hopes that anyone who has truly touched Bitcoin should be able to make money with Bitcoin, rather than just being a useless display on the shelf.
So, what is the Bitcoin economic layer? From the current Bitcoin Layer 2 projects, we can roughly see that well-known Bitcoin Layer 2 projects were established early and have explored related technologies for a long time. The developers are partly the builders of the original Bitcoin ecosystem, partly the builders of Ethereum Layer 2, and partly the builders of connected technologies.
With the maturity of the Bitcoin base protocol and the gradual formation of underlying technologies such as Segregated Witness, Taproot, Schnorr signatures, MAST Merkleized Abstract Syntax Trees, and Tapscript, new projects entering the Bitcoin Layer 2 construction generally do not have much accumulated advantages. Emerging teams need to find their own latecomer advantages, such as researching the latest technologies, first solving lightweight and attractive needs, and attracting a certain number of applications to enter.
Because most BTC Layer 2 will use BTC as gas as an important part of Layer 2 narrative, from a strategic level, this increases miner revenue and stimulates community developer interest. But whether this can stimulate overall growth is still a question mark.
Therefore, Mezo’s goal of building the Bitcoin L2 is not only a technical connection but also an economic connection, that is, to build the economic layer of Bitcoin. According to Mezo’s description, the Bitcoin economic layer focuses on user interests and aims to increase users’ wealth, community, and productive uses, while extending the core functions of Bitcoin and changing the way users interact with Bitcoin, combining the core technologies and functions of Layer 2 with the economic needs of Bitcoin holders.
Mezo aims to deepen the functionality of the Bitcoin infrastructure by assisting in achieving cheaper and faster transactions without deviating from the network’s fundamental principles. To achieve this vision, Mezo focuses on long-term active holders in the BTC ecosystem and has set up three mechanisms: HODL Proof, HODL Score, and deposit custody.
Based on tBTC, Mezo uses tBTC as the foundation, which is a Bitcoin bridge created by Threshold Network. Threshold Network is a privacy-focused merging network that combines the functionalities of Keep and NuCypher. Keep enables any user who owns BTC (and some ETH) to create tBTC by using a signer network.
Unlike previous solutions, the locked Bitcoin does not have a central custodian. Signers are randomly selected, and different signer groups are chosen for each forged tBTC. Signers provide collateral (ETH) to ensure that they cannot easily run away with the funds. In addition, the deposit is always overcollateralized. This means that for every 1 BTC deposited, the signer must provide 1.5 BTC worth of ETH as collateral.
Another interesting aspect is that signers create a unique address using threshold signature protocol. This means that an individual signer cannot take away the funds. Cooperation from all allocated signers is required to execute operations. If all signers want to break the protocol and steal the locked BTC, they need to cooperate to do so. If they deviate from the protocol, anyone can provide evidence of improper behavior by the signers. As a reward, the plaintiff will receive the collateral from the signers. Since the signers’ deposits are overcollateralized, the loss from stealing BTC is greater than the gain.
As an Ethereum token equivalent to the value of BTC, tBTC serves as a bridge between Bitcoin and Ethereum. BTC holders can deposit BTC into a smart contract and receive tBTC in return.
All BTC in Mezo is stored in a smart contract, and the locking contract can be upgraded through a multisignature operated by the Mezo development team. Each forged tBTC is backed by reserve Bitcoin cryptocurrency in a 1:1 ratio and is protected by signers who manage Bitcoin deposits and redemptions.
Mezo uses HODL Proof as a consensus mechanism. When the Mezo mainnet is launched, users can contribute to the network’s security and earn rewards through HODL Proof. A portion of the gas will remove Bitcoin from circulation, and as network activity grows, this method can reduce supply, reward long-term holders, and strengthen the security and economic foundation of Bitcoin.
Users can lock BTC on Mezo to establish a HODL Score, which is calculated based on the user’s Bitcoin deposits on Mezo and the results of inviting new users to participate in HODL. The longer the lock-up period, the higher the score. In addition to locking BTC, users can also lock MEZO tokens and protect the network by verifying transactions through the CometBFT consensus.
Currently, BTC, tBTC, and wBTC are supported for deposits.
Furthermore, when users HODL on Mezo, they will receive 5 one-time-use invitations that can be shared with friends. The inviter of the user will also receive 5 one-time-use invitations. Users can earn HODL Score based on their own deposits, their inviter’s deposits, and the deposits of the inviter’s inviter. Users can choose to lock their deposits for 2, 6, or 9 months. It is worth noting that locked deposits cannot be withdrawn before the lock-up period ends, and only unlocked deposits can be used.
HODL Score accumulates based on the amount of BTC deposited and the lock-up period, and all versions of BTC deposits can earn the same score. Locking 1 BTC per day can earn 1,000 points, longer lock-up periods can bring score bonuses (3x for 2 months, 10x for 6 months, and 16x for 9 months).
To obtain HODL Score, the project currently supports wallet connections such as Metamask, Taho, and Unisat. For native BTC deposits, Mezo currently accepts “legacy” or “native SegWit” wallet address types, i.e., addresses starting with “1” or “bc1q”. The project is working on adding support for nested SegWit addresses (starting with “3”).
First, visit the project’s website and enter the invitation code. If you don’t have an invitation code, you can join the project’s Discord channel to obtain one. After entering the channel, contact the administrator in the waiting room to enter the invitation code channel.
After entering the invitation code, click the arrow to access the deposit page. Mezo only accepts native BTC as the currency for depositing on the platform. If users want to deposit tBTC or wBTC, they can click the link at the bottom of the website after entering the invitation code.
After clicking “Connect Bitcoin Wallet,” the system will prompt you to enter the “Log in with Bitcoin” page. Please note that once you continue to log in and sign the transaction, your wallet will be bound to the invitation code. One invitation code corresponds to one wallet address, and you can only deposit more BTC using the same address.
After clicking “Log in with Bitcoin,” click “connect” and “sign” in order to complete the UniSat connection and sign the transaction.
Once these steps are completed, you have successfully bound the invitation code and can proceed with the deposit operation.
For BTC deposits, users can choose different lock-up periods to increase their HODL Score by 3 to 16 times. In the upper right corner, users can view their daily HODL Score based on different lock-up periods and deposit amounts.
Enter the deposit amount and click “Deposit BTC.” After signing the transaction, your deposit will be processed, and you can see your score ranking on the leaderboard.
For tBTC minting and deposits, when minting tBTC, users need to deposit BTC into a wallet generated by Threshold Network, using the supported BTC wallet address types. The wallet is generated and signed by 51 out of 100 wallet signers. After the depositor sends the funds, they leave their Ethereum receiving address. The tBTC bridge will check the Bitcoin network to ensure consistency, and if everything is normal, tBTC will be deposited into the user’s Ethereum receiving address.
After completing these steps, you will have tBTC in your Ethereum wallet, and you can directly deposit it into the Mezo portal. After entering the invitation code, click the “Deposit tBTC” or “Deposit wBTC” link at the bottom of the page to go to the ERC-20 deposit page.
Users can choose whether to deposit tBTC or wBTC on the deposit page, select the type of BTC to deposit, and enter the desired amount. Click the “Deposit tBTC” button to complete the deposit. The page will display your HODL Score based on the deposit.
On April 9th, the Bitcoin Layer 2 network Mezo completed a $21 million Series A financing round, led by Pantera Capital, with participation from Multicoin, Hack VC, Draper Associates, and others. Mezo, launched by the Thesis incubator in 2014, uses HODL Proof as a consensus mechanism. Users can protect the network by locking BTC and MEZO tokens and verifying transactions through the CometBFT consensus. Users can lock BTC on Mezo, and the longer the lock-up period, the higher the HODL Score. The HODL Score may serve as a weight for future airdrops. When the Mezo mainnet is launched, users can contribute to the network’s security and earn rewards in return. Mezo was established to help achieve cheaper and faster transactions without deviating from the network’s fundamental principles and to deepen the functionality of the Bitcoin infrastructure.
According to the project document, Mezo is divided into three stages, and the project is currently in the first stage. In the first stage, only early project partners are invited to participate, and tBTC and wBTC deposits are launched on the Mezo portal. This stage has a deposit limit. In the second stage, Mezo will open community testing, and HODL scoring will begin, as well as partnerships with project partners. The TVL limit of the first stage will be increased, and more BTC address types will be supported for deposits. The third stage will launch the Mezo mainnet, expected to start in the second half of 2024. At that time, MEZOTOKER will be launched with the main network and unlock TVL, and the HODL Score total will be settled, bridging TVL to the mainnet.
[Source: The Block Beats]