Stephen: This is your host, Stephen Sargeant. We were able to track down the Charlie Hu. We got him in a restaurant. We asked him, can you record an emergency podcast? He's former Polygon for Tezos Chain, and now he's the CEO and Co-founder of Bitlayer. We're they're building layer two on top of Bitcoin, one of the most powerful blockchains.

In the world. You've all heard about it. We talk about his early days in crypto. Since 2013. We talk about DeFi on Bitcoin, including NFTs, Ordinals, STAKING Bridge List Building. This is an amazing conversation to find out everything that's going on with the next revolution of Bitcoin.

Tune in and thank you Charlie for interrupting your dinner and sitting and talking with the Around The Coin podcast.

Stephen: This is your host, Steven Sargent. We have Charlie Hugh live on location at a restaurant. He took time out of our day to tell us how he is building on Bitcoin. Charlie, the CEO and co-founder of Bitlayer. I was just saying before the show, we just interviewed Matt from Arch Network, so we're excited to have back to back episodes.

Talking all about the different ways you can build on Bitcoin. You're an early builder and investor in Polka dot, you worked and you kind of like have that southeast region working on several different projects there, including Tezos.

Tell us a little bit about your background, how you got all wrapped up into crypto and Bitcoin, and then we're gonna jump right into it.

Charlie: Yeah. Thanks. First of all, for having me. on the podcast, on the show. Yeah, the journey with Web3, it's been almost 10 years.

So my, I brought my first big Bitcoin in 2013 in Amsterdam via a pretty random like Amsterdam big Bitcoin meetup. But obviously that's kind of how I first have a good understanding about what is proof of work, what is decentralized network.

Ethereum got me at my full attention in a way. I feel this is the industry I wanna be the like, lifetime career. Yeah, as I me. My first major gig involvement as a project was polka.as an investor. We build like a ecosystem brand. kind of like Solana, we call Base I that we end up with investing, incubating around quite a few DeFi summer I moved back to two stuff, so I I joined, actually, polygon became the head of APAC Ecosystem Builder, so that was great experience learning building, doing BD and the dev rail for very major Ethereum ecosystem.

But my journey with Bitcoin was actually 2023 with auto. So I was pretty, I was pretty lucky. My friend was like literally day one on auto.

They were inscribing, like first white paper on Bitcoin, all kind of different. He told this is gonna be the next big thing. In the beginning. I was like, I don't get it. And then I realized, okay, Bitcoin native assets natively inspired on Bitcoin. block, Bitcoin Native NFTs and then the C 20 Fung token meta protocols. Okay. So like that was like after one week of research I start actually educating what is auto those. Yeah, like early 2023 BI C 20 token camp. It become quite a big adoption in Asia and I was like wow. Their first wave of adopter and an educator and I was on space five days. five hours a day in the first like six months.

And Obviously the pivotal moment for me at least to really start deep dive building things on Bitcoin was because the auto summit, September 2nd, 2023,

during the, token 24 9, Singapore conference, Domo, who was a creator of VC 20, he was sharing all the traction, all the things happened the last six months. during this BC 20 mania, and they, they entered this Debate between.

Domo and Casey that all the unchain UTXO generated, right? People paid all the, you know, crazy gas fees with Bitcoin and all that. What, what, what's the end result of that? Right. The Bitcoin network become very congested. People have to pay so much gas fee to do the basic payments as well. And Manpo was always full. We need to sell scale Bitcoin, right? Regardless, one way or the other. And and that's kind of for me to really feel like, okay, this is the vote important problem to solve in this, in this space.

I be obviously. past color Coin, they all had the attempt. But the BBM was kind of, for me, really feel like, okay, this is I wouldn't say holy grail, this is like a very exciting approach. Really inspired and probably the highest chance we can be successful. So after BBM White Paper came out, you know, published by, of the very good Me and my cofounder Kevin, we started talking about how.to build things, approach. So we started as a group and then we it's gonna be a very exciting journey. So start decided to full-time building things with with this company brand kind of build Layer. It turns out to be a very good brand and people like the name. Yeah, that's how we started the journey. Yeah.From Surprised

Stephen: Surprised there's any names left after, you know, 13 years of bit and, you know, Coin so many different plays on that. I'm curious, you talked about the early days buying your first Bitcoin in Europe. Who else, was there anyone else at the meetup at that time? That's quite notable now.

Like you always run

into those people in the early days. And then they turn out to be, you know, some of the biggest builders

and including yourself now, was there any other

people that you remember that were early days and you're like, oh, I remember like talking to them in a, in a

small group. they, they,

Charlie: they, they're mostly miners. Yeah. So.

Bill, right as, as a matter of fact, we are

talking to quite a lot of mining groups. We have a big press release. We gonna publish by the end this month,

But a specific person in that specific event in Amsterdam 2013, I think it was just few people ended up with studying this Bitcoin mining pool called pu.

So one person called Andy, I.

met him there.

We, we disconnect for quite some years until like, obviously now we are actually gonna partner with. PU on The PVM bridge side as well.

So

That, that's

awesome. back in days,

back in days

even like gen was kind of trying to contribute in Bitcoin, and network, Right.

The, the Fact. that He couldn't do that much what he wanted. to. That, was the reason he started Ethereum from the very beginning. you know?

Yeah.

Stephen: Yeah. That's really interesting.

Talk to me, 'cause you said you were in Asia at the time. What was it like? Like you spent a lot of time there.

What were the, you know, what was the ecosystem like in Asia? 'cause I feel when it comes to crypto technology,

they've always been a a little

bit of a ahead in some ways, especially when it comes to culture.

Right now with meme coins and

blockchain gaming. What was the culture like down early days as you were building on Tezos and Polka dot.

Charlie: Great

question.

Yeah, with

Polka

was great journey. Polka Dot

has huge adoption

of.

Builders in terms of the interoperability mindset. A lot of people love the idea of, you know, have so many different chains. Interconnected. It's like, it was like a network of networks. Gavin, who was the CT of Ethereum When he started Polka dot and it was Gray vision.

And somehow, you know, he has, I

he's a great founder, great charisma,

very technical. actually one of the gig chat like coder developer. But he also was very good public speaker. He get a lot of fan base. When he had a first tour in China, I was his fir I volunteered, became his interpreter and a lot of people loved asking a bunch.

of questions.

Know, It was it was like a nice coincidence I being his investor. And also I, I know I love the Pol so I managed to really interpret the way he speech, right? Like his speech was very fast, very technical. I was probably the only person actually understand what he was trying to say. a lot of people get to know Polka by me by, by translating.

So building things with, ecosystem in China,

South Asia is very different.

It's very fragmented market and the retail high retail energy is very, very high. People like to be, risk taking, they like to try new things. So a lot of the retail pioneer came from Asia, including auto. so in 23 auto community, actually came from Asia. 99% of the adoption was in Asia, and then the Western community

picked up our

follow up because of the traction, because all the other integration, like the major wallets integrating.

Right. And also also a lot of the interesting KOLs talking about building things on Bitcoin, especially from auto and so on. So that's that. In terms of develop community in Asia, it's very different

The countries vary lot in, let's say, southern part of China. or let's say. In Vietnam, it's actually very, very advanced and so very forward looking. They're not, they are always, people try the new things like Vietnamese community, the, you know, somehow the Chinese community was like first wave of adopter in terms of DeFi summer in. two 20.

A lot Of people building DeFi protocols such as a carbon Network and a few others.

They were like first wave in

DeFi BER network

founder

who who actually initiated the btc

He's also our energy investor. So those are the like absolute OGs, like first Wave, right. In terms of, you mentioned qua, right. So the retail wise, I would say. Asia Depends, some of the very smart little cabal, those people start everything like first wave in the world.

But obviously there's a lot of other retail. They kind of be

adopter for things like NI

think 2 20, 2 21. the DeFi Asia was a later adopter. NFT Was a later adopter as well. Like, like you yoga labs, crypto stuff from the United States, right? And then eventually Asia picked up unfortunately some became like the liquidity they, they buy, they stopped buying some nft, really high price,

Stephen: right?

They picked up too

late. yeah,

They picked up the trend a

little too late.

Charlie: Yeah,

yeah, yeah, yeah. So, but I think building things in Asia community with global projects, I think it's very fun. Also very challenging because it's different culture.

right? the communication flow. You need actually proper bridge. to really Translate the content into local languages,

actually goes through the local regional channels and communities. The gap or information isolation is still, was very big. Now it's getting less and less because

everybody start interacting. You know, with all the conferences. Everybody kind of mingle with each other very easily. like Big ecosystem like Solanas. We have a very deep community in Asia. we start from Asia.

I basically in Singapore, Right. We have a big community in South Asia. I think the gap, what? We thought the gap was huge from United States and in Asian community. Now it's getting less and less.

Everybody's kind of in the same page now.

Stephen: Yeah.

I'm curious why Bitcoin, you know, you worked on other blockchain, you know, you even said you, you were focused on EBM with some of the projects you're working on.

Why'd you kind of go back to Bitcoin and being like, Hey, this is where I want to put my flag in the

ground and we're building here.

Charlie: Great question. Thanks for asking.

So I built things in

E right? With Polygon

Pol was kind of like

a new version

like, but wants to even improve E right? In the next level with Interopability.

So. I I never claim I'm a Bitcoin maxi. I never claim my laser eyes. The fact that we're building things around Bitcoin, we're not Bitcoin maxi.

So when people say, oh, you, you build things at Bitcoin, you must be Bitcoin maxi.

I always confront them in a way. No, we're not. We actually try to pioneer Bitcoin, try new things, not just only digital gold. So that's that. Right. So why Bitcoin? I think three major

One,

because my frustration with Ethereum, there was a lot of issues with Ethereum.

Foundation.

Ethereum

Ethereum and Token Price has been underperformed massively by Bitcoin, right? Due to various reasons. I can, you know, we can elaborate that maybe ne next time another, another talk talk, right? It's, you know, we can, open, we can keep talking about this forever, I think the Ethereum dynamics become, become a very strong problem.

Ethereum Foundation. stopped focusing on the product or product market fit, They start start focusing on more on the governance.

infinity garden, the, the whole politician stuff. That really frustrates me a bit as a user, as a, as a, as a to holder. So that was one thing. Second thing, just the sheer amount of Bitcoin, TVL, right? The whole market cap is so big already.

It's just huge potential, which which is, we call this asymmetrical potential. There's so much things happening in Ethereum, DeFi, even just 10% of the Bitcoin market cap getting activated.

You know, to entering the yield protocols and so on. we can get

much.

Right.

on the demand side, Bitcoin holders exploring what they can do with the Bitcoin earning yield, getting more stable, Coin borrow against and so on. But due to lack of programmability or infrastructure, they can't really do that on the supply side, especially Bitcoin DeFi, the DeFi builders or protocols, they want access to new assets.

You know, they wanna embrace new TB, so the Bitcoin TBR is gonna be the very major source they wanna embrace. I know We All know what happened with Ethereum, right.

The, it's like there are over like 150, like Ethereum L twos, so the liquidity per fragmentation, Ethereum is very big problem, and I don't really think there's a very, very quick fix nearly soon, Right.

So all these dynamics intertwined for me, like it's very obvious. The other things are Bitcoin more potential high upside and it. just like makes history. For me, like I'm always gonna hold Bitcoin, especially certain percentage of my portfolio for the long run. I'll never sell that per position of Bitcoin Your Beauty. Things with Bitcoin is, is always kind of part thing, part of the history.

Bitcoin is the only network, which is still kind of the same. Didn't really change the consensus in the

15 years. It just keep running

as we are. Like all the way from NY in 2 0 9 till now. You know, it's been multiple cycles, a lot of history there.

Ethereum, Solana, many other big ecosystem with all due respect is still very early.

So it just feel everything you contribute in Bitcoin network, in Bitcoin history, it just more meaningful in the long run. And I feel like there's nothing more inspiring than building things with Bitcoin to make contribution.

on.

Stephen: I love it. I love it.

Can you tell me what bit

Layer is doing? Like maybe explain it. We have an understanding now, you know, arch Network, they were doing it a certain

way. We know Babylon

chain is building DeFi on Bitcoin as well, or

you know, staking on. Bitcoin

kind of show us like what is your lane?

What are you working

on? And maybe what's

novel about your approach versus some of the other approaches of other companies are building on Bitcoin.

Charlie: Yeah, thanks for asking. So Bitlayer focus on the B VM approach, which is we are one of the first team doing research and engineering about bi BBM. We've been contributing as one of the largest engineering team and research team altogether over 45 engineered research and been working on BVM, on the Bitcoin Trust minimized Bridge on the Bitcoin verification, with

Vivian, like in the last 16 months.

Right. We start,

late 2023 and until now is like over a year, around 16, 17 months now. So a lot of our like a lot of hours, a lot of hard work has been put into that. So we're leading the efforts on the Vvm Alliance, on auditing on 16 verifier. A lot of other technical works as well. We established V VM Asia Community, Over a hundred thousand people get to know BVM and all these ideas and the concept of what's the potential via our articles and education and evangelism. So that's that.

What

are we trying to do and what's the difference between us and maybe a few other protocol? mentioned

Arch and is across D

three parameters to scale Bitcoin. There's three, different ways you have the state channel, which is, lightning, right? That they, they have been successful doing that supporting faster, cheaper transaction of payment in.

Bitcoin, right? With channel. I think that's already there With certain product market but the problem with lightning is they can. You can't really do more complicated, smart country based kind of DeFi use case, including lending, stable Coin, propex staking you, you, you name it, they have certain limited programability, right? With the state channel. There's no smart country capability, capability and so.

on. they, you know, that's kind of limitation Latin is still, there and that lightning in a way, we can call it's like the first ever Bitcoin L two,

right?

With approach. We believe Bitcoin DeFi in the long run can be much. more than just payments. We wanna do more complicated, smart country based, kind, high programmable, logical use cases, and the ones that we just mentioned, all the Bitcoin primitive with Bitcoin as gas free, Bitcoin as assets, right?

So we want to build this trust minimized

programmable

infrastructure Bitcoin settle on Bitcoin, Bitcoin assets,

but in a a, a like programmable.

The difference we are we, well, the of our architect compared to stacks or other big Bitcoin side chain previously is the Bitcoin settlement. So with our Bitcoin verify, we're gonna launch the transaction happening on our L two will be settled through our Z key proof on Bitcoin.

block.

There's gonna be fees being paid to the miners, And, and, and there will be security

budget T

More importantly, on the technical side, because the transaction actually

Bitcoin have

the similar security level as Bitcoin on layer one.

People trust Bitcoin security. They can trust that the the transaction verified on our network.

So that's a key difference.

Bitcoin?

Stephen: Yeah. I wanna interrupt there. So is it other, you know,

applications, are they sometimes settling outside of

Bitcoin? Like, you know, the transaction or

the, you know,

infrastructures Bitcoin, but they're selling it, I

think on EBM or other, so other so side

Charlie: chains, so for example, all, all the Bitcoin side chains currently, like Stacks And a few others, the settlements is on their own validator sets.

Right,

It's not settled back either the, the Bitcoin finale doesn't happen on Bitcoin one,

Stephen: right.

You know, so that's kind of the

Charlie: the key components

Stephen: Yeah. And That leverages the security of Bitcoin. But I,

I'm, and I wanna jump in here because you know, you have a bridge, you know, protocol, aren't you? Con Do you lose some of that? You know, security because of bridges. Like I know on the Ethereum bridges, we know the Ronan hack $600

million. Once you get to that

bridge ecosystem, you, you know, extend out to

bridge risk and other attackers.

Does that

similar thing happen on

Bitcoin when you build a bridge on Bitcoin?

Charlie: so that's exactly the reason we want to lower down the trust assumption. Make it mom trust minimized

and, make it a higher security level than the multisig, right? The rapid BTC start from 2018. It's essentially a multisig, two out of three, three out five kind of multisig approach.

From

Bitcoin one to Ethereum one, it's been there, but a few of the multi owners of B BTC changed their ownership. So Big Global, which is essentially owned by Justin Song, own multiple private keys on that big gold and few other OG initiator and founding members of the

the

BTC already stopped, actually operating.

So I think

Stephen: Hmm.

Charlie: we have a

conclusion We can fairly. easy

Wrapped BTC

Bitcoin

or this multisig approach is not

end

game of Bitcoin bridging.

So obviously you mentioned about atri, there's a meta protocols and some other kind of layer one scaling approaches. They try to do the native Bitcoin L one kind of programability.

We, we tried that route as well, but I. Think it's gonna be very limited in terms of probability and using Bitcoin script to do native Bitcoin Smart. Is gonna be very limited in terms of the time, the whole performance on transactions and so on. So our approach is focusing on high programmability, high performance, and the, you know, the B VM bridge, which we down from majority honest to one out of a model is kind of.

Majority solving the problem of bridging security, make it more trust minimized, but having the high level programmability, I think that's the important thing.

So,

and

Stephen: that, and that

programmability

programmability allows you to offer things like the Bitlayer yield, BTC, right, where you can offer yield. Is that

accurate?

Charlie: the Bitcoin

yield. now are The Bitcoin yield.

Yeah. And

also high performance on chain option protocols, the

propex, all that. yeah.

Stephen: Yeah. Okay. Getting into the, yeah.

decentralized exchange, what, what are your thoughts about yield? There's been like a, a four year time period where the word yield had a bad, bad connotation. We saw what happened with Celsius Anchor and other projects that, you know, promoted high yield. Do you feel like we've gotten rid of

that stigma and now yield is more utilized with actual legitimate staking projects than others?

Charlie: It's a great question.

So block and a few of course ftx, a lot of them are centralized CFI kind of approach, right? You have to socially trust those counterparties and entities institutions to the fund properly, and that was kind of the reason we had all this. Crazy crash in 22, right? The counterpart risks, the commingle funds, all that.

So I think as a matter of fact, we have to focus on the first principle of self custody. DeFi focused yield and yield DeFi protocols, right? So that's kind of what do we want to stick for. Obviously there's, people prefer to trust. Big goal. I You're the custody provider, which is institutional driven. I think they're doing well.

I mean, big, big respect on those institutions kind of level of custody. I think, I think people, especially the Bitcoin communities, they want high level of self custody, lower down the, you know, the risk with the counterparty risks and so on. You know, that's the important thing in terms of yield with a.

Unreasonable.

40%, even a hundred percent API. That error is gone.

That's the DeFi number two 20,

right? People realize it's not sustainable. A lot of those yield just kind of inflated for with some, fake points or other tokens on top of it, and all this retaking, which we had a lot of hype last year. Now people more marketing rationalized, okay?

Some are.

How sustainable is this gonna be? Right. The good thing and also the things that we feel, okay, we have a still are we're gonna gonna hit? An interesting is Bitcoin holders had no yield in the past. By ling your Bitcoin code, you're not receiving any single dollar yield, you know, by just doing that. Right. And a lot of the Bitcoin holders, especially the new ones, are exploring low rate yield.

Adjusted right. Some people are okay, even with 2% yield, Right.

So there's a lot of proper long products

protocol.

They provide the range around five to 10% with certain kind of parameters, and they also off offer some kind of unchained DeFi option protocols to cover some of the risks into the, in the principal protection and so on.

I

think that will get into more and more interesting comfort zone for a lot of big

corners to properly into all.

Obviously there's some other high risk, kind of high kind of protocol, which you, they give you 25% of the

for the three month period, Right.

Boosted by some of the other additional incentives.

So things like that still happening. now we see that as well. So if they eventually building things in Bitcoin, we need to.

focus on three, three principles. One is self custody, two is Like trust minimization, right? Third is liberal, liberal market. If people wants to take high yield with higher risk, so be it, right? They had, there's like product market on that, but then other people wants to have a low yield but low risk.

They,

I think that there's certain different category of risk taker

and risk adverse people, but still taking not like a completely zero risk.

to to go for it, right? So I think we.

Stephen: I love it. And some people wanna get their Bitcoin I love it. And some people wanna get their Bitcoin active. It's just sitting there. They want to do something with it. They want it to, you know, get some motion going on and do, you know, they want to tap into a lot of these resources, but I think that's important to note. There are some people that, hey, they want to take that risk, and those protocols aren't saying, Hey, this is what we saw back in 2020, which is this is 25, 30, 40%.

Absolutely no risk. You realize now like, Hey, this is risky, but you also have the option to be a little bit more conservative. Talk to me about the 400 trillion number, the trillions, you know, that's, there's a number already throwing around around Bitcoin and liquidity. Why haven't we, you know, been given access?

Why haven't users gotten access to these trillions

over the last few years? You know, why? are, Why are we still fighting to get access to this, this liquidity?

Charlie: Well, as I said,

Bitcoin ecosystem primarily was focused on mining, Right.

My

first Bitcoin I encountered was in a mining community event in Amsterdam. So a lot of miners have a lot of Bitcoin. Those miners actually operated that mining almost like a manufacturing business.

Right.

The only thing they care about is

the electricity costs and how much Bitcoin they could potentially mine. every single day. Yeah, So they don't

Those people have very little financial knowledge. They don't necessarily do asset management and so on, Right.

Those

Bitcoin is not contributing and entering like a liquidity pool across DeFi ecosystem and so on, right?

DeFi came from Ethereum because of that, right? There's like different crowd is different level of

financial knowledge

and.

Because the more and more people who are new Bitcoin across the institution and retail,

We use very high level Bitcoin, like financial knowledge because of et TF and so on. So we are encountering and talking to a lot of high level financial savvy product builders and also users and investors. So I think that's a very important thing, the demand supply side, getting more and more financial savvy.

They actually want to explore how to, you know, improve capital efficiency. and Getting opportunities, right.

to yield products

and

on.

So the community of Bitcoin holders changed quite a bit, right?

Or due to etf, due to the DeFi and all that? Right. We had, we had one of the first Bitcoin project backed by Frankton. You know, we're talking to many other Bitcoin, ETF firms. andrs like it was amazing conference in Digital Asset Summit in New York all, a lot of Wall Street institutions their knowledge their about three Bitcoin so So things changing, the changing,

and the level of people, the

level knowledge is changing, right?

not just minor

approach.

Minor, minor, pre

10 years ago, you talk about Bitcoin, you go to a Bitcoin meetup. Everybody just talk about mining weight. Everybody talk about the hash rate, power, the miners. That's it. There's no other things you, they talk about. There's no other things you can share, really talk about, right?

So this is very The second thing which we need to actually do to get with other builders or other protocols is the,

the new of high programmability trust minimized.

Proper design, high security level of infrastructure to empower those Bitcoin DeFi stuff. Without that, you can't do Bitcoin DeFi.

Then all these Bitcoin liquids on the code wallet is not gonna be accessible to any users. You building a DeFi use, DeFi use case or protocol, have very little correlation with all the Bitcoin liquidity on all the code votes or code right? So I think that that's the gap we wanna close. and We wanna let more users access to that liquidity.

Stephen: Yeah.

I love it. I love it. Talk to me, you, you know, you mentioned the Bitcoin ETFs and being backed by Franklin Templeton. I'm curious the, you know, I know you're not a, a Bitcoin Maxie, but it feels like, you know, the ETFs is moving us further away from the ethos of Bitcoin and turning us more into like a Wall Street financial product.

Do you think this is good for Bitcoin or do you think it's kind of like a double-edged sword? We're getting more institutional adopters, but I think, you know, sometimes we might look at, well, the Bitcoin's not really doing anything and that affects

transaction volumes

and it could hurt the ecosystem as well.

What are your thoughts on that?

Charlie: Well, Bitcoin layer one doesn't have too much transaction volume these days. Unfortunately,

that's the truth. Yeah. Since 2023 from all those crazy season till now, the manpo become more and more empty. Right? Like two years ago it was crazy. Congested

people paid hundred dollars, hundreds dollars worth of Bitcoin as gas fees, sold, right.

So that's very different et.

e.

Stephen: Mm.

Charlie: Billion, even tens of billions of pressure for additional liquidity, right?

I think it's net positive for the industry in terms of support. Bitcoin price goes up, Bitcoin has been decoupled, has been the best performance assets across all the web assets, right? It's gonna be probably the reality in the next two years as well, right?

Bitcoin

with Bitcoin. Bitcoin ETF sticking is gonna be very exciting. Policies, potentially gonna, approve, Right.

We'll see more things happening with ETF with the position. But before that, yes, the ETF might be a temporary kind of short term somehow. Maybe get people worried, oh.

a lot of institutions are holding Bitcoin, not a retail anymore, but I think It's part of the adoption process.

It's,

it's it goes to every single industry. You have all the like the good old days with a lot of the people who have little group people holding that and then become industrialized. And then because industrialization and new adoption demand on the big companies and small guys as well.

The quality of the industry improve, right? So the conversation we are having with some institution, potentially technology to access Bitcoin

yield very legit. They're sitting on even thousands of Bitcoin. They properly wants to allocate the Bitcoin into asset management stuff.

These are real users

with real demand.

We need to offer real a real products to them. We couldn't really say, oh, because you're institution, you don't deserve Bitcoin. Bitcoin is permissionless anyways. So it doesn't really in the way saying, oh, Bitcoin should back to all the way 15 years ago. Let's back to this cyberpunk.

Everybody don't know who is their real name. Let's just don't do K-Y-C-K-M-L and they just

this para thing. You know, back to the S

I think that era was great, was good old days, but it's over. We can't really just go back on that. It's like the same thing goes to music industry. Some others will.

Right. I, I kind of, I'm a big music fan, so I kind of use that analog industry become more industrialized with institution entering that bring more net positive value and demand and adoption than used to be. I so

much important embrace.

By having like MicroStrategy holding almost 4% entire total supply, they might be, have people have concern that the distribution of the Bitcoin net will become more and more centralized,

Right.

but I would argue across all the Bitcoin or not what's ecosystem, especially all the proof of stake ecosystem.

Bitcoin

with proof of work, it's still the most decentralized, well distributed network internal tokens, distribution, and also the network distribution, Right. So that's still there compared many other ecosystem which start from prove a stake. There's lot of the pre minds, this and that Bitcoin is still the best network, you know, the most secure, decentralized network.

Regardless, we have.

institution option or not.

Stephen: Yeah, Right. I love it. Can you tell me a little bit about your ecosystem? Because you know, Bitlayer has, you know, ecosystem partners and different people or different projects building on it. Tell me a little bit about the ecosystem. Maybe some unique use cases. Or maybe, you know, since

Trump took office, some emerging use cases that you know, people are now coming to your network to build on.

Charlie: Great. Yeah. Thanks. So

compatible, our V1 main launched last April.

So far we have over like 280 projects apply our main net. The active ones are around, like still have like around 60 projects that are very still active. Like every day has over like a thousand transaction happening. Our network. All time high.

We hit half million transaction per day. Now still sitting around a quarter.

million transaction. So altogether, since the V1 that we launched launched VMA last year, We generate over 46 million transactions on our network. We made around 8 million on.

gas free revenue, and so it's being pretty active growth. We are one of the fastest growing Bitcoin L two ecosystem since last year.

We had this ecosystem leaderboard. In our website, you can easily find the

Pop transaction, pop, TV on top popularity projects. Most of the project, and in some use cases are center around DeFi, We have pretty much four, our average two to four.

different protocols in every single Like sectors, categories across all the Bitcoin

DeFi,

DeFi, pyramid primitives the ones you mentioned with Trump administration now with institution entering could be very exciting around our ecosystem. I think one of them I've been promoting and actively talking is Unchain Bitcoin option protocol. So we all know there a bit, right? one

of the biggest decentralized.

option trading exchanges. They require very rigorous YC and a lot of other things red tape as well. I would say a lot of Bitcoin holders doesn't want that kind of rigorous yc. They wanna have the kind DeFi version, non yc, more liberal kind of unchain version trading. They options

sometimes to shed the Bitcoin price going down and other things.

Every two hours. They have kind of round, round robing kind of model to predict the Bitcoin price and do some option co option, put option trading chain like transact, unchanged in the Bitcoin layer two network. That's a very interesting Bitcoin financial derivative protocols. I, think it's gonna be big potential.

The other side

is. Yeah,

the other side is other right? Yeah.

We're exploring a lot of RA protocols,

you know, they, I want access to different type of RA yield.

We're actually exploring That as well. So there's gonna be new type of use cases using Bitcoin as assets and liquidity to do different things on, chain. right?

So that's kind of things we are actively still onboarding new.

use cases to work with us in ecosystem.

Stephen: That makes a lot of sense.

I'm curious, you know, you mentioned K-Y-C-A-M-L, like I'm a crypto compliance person by, by trade, working, doing blockchain investigations. You know, are there any regulatory requirements? Are you putting any basic, maybe things in maybe around sanctions? I know, you know, chain analysis and other blockchain analytics companies have smart contract calls that you know, you can at least protect yourself in regards to sanctions exposure.

You know, especially if you're building in DeFi, although DeFi is not covered under regulations as a whole. You know, similar to Bitcoin, as you probably know, 10 years ago, Bitcoin wasn't covered under regulations, but eventually, you know, it's kind of gonna go that route anytime you're transferring.

Value doesn't matter what ecosystem. What are your thoughts on regulations and how, you know, some of the builders are protecting their

users, especially when it comes to sanctions and North Korean State sponsored stolen fund.

Charlie: Yeah, it makes sense. It's very sad that we have all these hacker groups globally still attacking all kinds of very legit companies and platforms. Use this phone gotta drain out, right? It's being sad since the beginning of Web3 and now not even Web3, the beginning of digital, you know, technology error right from web two as well.

There's a lot of web two hacks to happen every single day as well. So that's that. It's not really just uniquely Web3, it's actually Everywhere. in the digital

world, Yeah. right? So it's unfortunate. So tech,

all these on chain protection protocols has lot of

Problem. They provided good value. So Pillar, we have our security.

alliance. We work with all the best security auditing firms. We actually handling the PVM Verify auditing work, right? We're working with some potential, really best of the.

best ones in the world To make sure the code is being properly audited. We have the highest

security level and all that. In terms of

kyc, or K yt or you know, all that. Chain analysis is a great partner. We're partnering with them as well. We work with we're the first Bitcoin project working with on on chain integration of analysis tools.

we work with, you know, IPC provider. you know, We work with the best the server hosting and

interoperability solutions such as channel, cci, ip, and so on. Back to your question about compliance or regulation,

I think the whole world is getting more and more regulated. Web3 as well, right? With a lot of things, you know, to protect the user, protect, protect the investor.

There's gonna be a layer of compliance rep tech there. While the, the part I feel we shouldn't really completely give away is the, the private transaction. The somehow the, the unchain privacy and some of things people liked a lot. I don't think the CBDC, approach cbdc is actually the. opposite of Bitcoin. So when people say, oh, centralized government, digital asset, I think that's something really make people worry about.

And Donald Trump also mentioned, right, that US government is never gonna issue any cbdc. I think that's kind of a, a great way to put it. We, while we want

protect the users, we need to have some proper ml QC things, especially security hack. Right. We can trace it, we can find it the way to protect the users, even, you know, go after the, the hackers and malicious you know, actors.

We need to have a layer of privacy, you know, in certain use cases. That's what people are willing to pay additional fees for that, Right.

With kind of a liberal market. I think with, with Bill, what do we stand for is the on chain DeFi use cases. We want to provide best infrastructure for them, especially for Bitcoin holders, Bitcoin

so on.

We.

Exploring Collaboration with institutions, Right.

These are very important sets of target audience

and customers and partners we wanna work with collectively and the transparently. That's the part I don't think we wanna say. No. I know we don't want to be this kind of privacy chain, like monro back.

days. it, may not be the approach in this era in 2025.

Stephen: But I think it, it's one of those things, and, and I could be reading you wrong, but it's like, hey, if we need to, we can flip it on if that's what the, you know, the use case requires. But if the use case doesn't require that, there's no sense in going that far down that route.

Is that what you're saying? For institutions, they can

flip on the K yc a ML element when they need to, but for the most part, your ecosystem's

gonna run. it's it's a

Charlie: street arm, it's a stretch arm. with the integration,

already building with channel and some things. Exactly.

But it's not like every single transaction. We let, we just push people to just go through the whole QC route. Yeah. It just, It's it's default privacy It's over and then hey.

Yeah,

Stephen: exactly. Which

makes a lot of sense. Which is where, you know, like where the ecosystem like, hey, you don't want every transaction to be fully verified and embedded. You're not a centralized exchange. But if there's a specific use case where institutions wanna play in this world, then they can easily switch on that switch and their use case may have it, but that doesn't affect the rest of the Bitlayer ecosystem.

Talk to me about how you attract developer. Like I think we all know the game of grants and tokens and everyone's developers are dropping from one project to the other, just trying to collect as many tokens, but also, you know, maybe in a way harms some networks where they're not maintaining, you know, that same developer growth.

I know you have, you know, a mining rewards program. Talk to me about how you attract and keep top developers. Building on Bitlayer and how challenging is it? Is it very challenging? Or because you're building on Bitcoin, you might have a more dedicated group that wants to see the ecosystem

grow versus us jumping around on every

layer to Ethereum project that's going on.

Charlie: Good question. So I've been building ecosystem activity across different ecosystem. I saw other ecosystem. They grow They up and they went down. And also some of the different playbooks. Some works, some didn't work at all. So we combined the good things about Ethereum ecosystem. The thing I did with Polygon, I saw, we learned a few things in the blast. We have our ecosystem leader bots. We try to create this healthy liberal market that different protocols to kind of compete.

They're being Properly

promoted when they have some interesting product offering. So we have our DAP Center, which we put specifically the ecosystem in the S Right.

We actively working With Web3 Native wallet, such ASX Wallet, Finance, Wallet, safe Power wallet, trust wallet, and few others. We did a good ecosystem user campaign with those wallets. We need those wallet users, which are native on chain users to enter our ecosystem to try all these DeFi use cases.

So those campaign we kind of can promote, almost like imagine we building an ecosystem like building a shopping mall

Those use cases like the stores in the shopping mall.

So. we offer different.

Promotion season for the users. come. Those are the interesting early adopters. We wanna bring them, attract them, let them try all different use cases, learn along way, let them finish all the on chain tasks. By doing that, they can get some small fraction of the reward if they finish, and then by doing that learning, by doing and getting reward, some of the user actually stick

in.

So that's kind of the most effective campaign.

The.

base together with other Web3 wallets. So that's The. way I've been growing. So Web3 builders, Right.

You mentioned they enter different ecosystems asking for grants. What they're asking not for grants. What they're asking is for endorsement and also how we can really work with each other's support collectively. The ecosystem Project Success is

success

if we manage to bring

top project in the global best of the best use kit in the world build our ecosystem.

Then we are by default successful. So The way we are growing is supporting liquidity to the the really good projects with our risk assessment, and then we really put them in the spotlight to bring users to them to help them figure out their gold market strategy together. These two things are the most things they need, not necessarily that's 50 quarter million which they don't even know how to properly use those money. And it's not just the gas, gas subsidy. We are pretty low cost on the gas fees, but make it even cheaper on gas fees. Almost zero for, for Short term. is Okay. But it doesn't really make sense. We just keep subsidizing every single use cases

to zero forever

because in that case, there's no revenue stream in our network that's not gonna be sustainable. So we have certain different type of ecosystem support program for different.

use cases. But it really eventually really comes down to Does this use case or different protocols

have specific

market fit In our user base, in our

community, we have almost almost over 3 million users now, if they have no product market fit whatsoever at all, we probably cannot support them, and we We're being very careful and very selective on the grants on liquidity we support to the projects.

Stephen: I am

curious, just as an entrepreneur, to entrepreneur, is this more difficult than you? You know, you've been so close to so many different projects and protocols and blockchains. Was this more difficult than you thought? Was it more expensive than you thought when you got into like the auditing and the pen testing and, you know, from when you built before you built this to now,

was this a lot more challenging and expensive than you ever thought after being so close to many other projects?

Charlie: Great question. That's a good question. Talking about try to be

business wise, practical,

Yeah.

And have a high growth rate while don't over burn yourself in your treasury and all that. Right,

So we raised the altogether 25 million, we made around 8 million gas We revenue. But it's not infinite amount of money.

Right. That's why I'm saying we we're being very careful with the grants and all that. The, You know, the money we, we incentivize projects. We don't wanna have this kind dynamic out pay to build on us. kind of thing. We never actually promote and like encourage, leave people that kinda impression in terms of building the awareness, building the education, it costs more money than we thought.

We sponsored quite a lot of events. We built, we did quite a of hackathons, different kind of things. on chain marketing. Online marketing as well

was actually pretty high cost. We learning a hard We went through a lot of different Bitcoin magazine events. We sponsored pretty much all of them.

Last year we went to lot Ethereum events. We spent quite a lot of money, you know, traveling around. talked to builders

that cost a lot of time and money,

but

But it's a long term bet, a long term investment we need to do, especially in the first two years to make your name out there. I don't think we have to keep spending the high rate like it used to be like last year, but the marginal effect of doing the same, thing is getting lower, so.

we are shifting to different approach of building Awareness, keep the re right.

In terms back to your question, what I thought cost actually more money than I expected

is

actually hiring.

Hiring the great people who build ecosystem with us and that we want to stay long term. It's actually cost a lot of time and the money, and we work with quite a lot of really good, you know, recruitment agencies as well.

We work with some universities of some to find great talents. I think to build our very strong, robust global ecosystem require a lot of great talents.

Stephen: So Charlie, you were talking about, you know, the difficulties and the challenges and the expense of hiring. Can you kind of continue on that point? Like, you know, you want the best builders in your ecosystem. Did you not realize it was gonna cost so much, or you just didn't like at the time? It wasn't that, you know, know, you were focused on maybe other things pertaining to the business.

Charlie: Yeah, I was focusing on building partnership. Right. You know, and also talking to a lot of the the investors, you know, you. know, other kind of marketeer. But more importantly, you need to find true, passionate ecosystem builder, grow with you in the team and be very supportive having this like altruism helping founders helping. You you use case builders like, you know, draw your ecosystem so, it costs a lot of and. and bring that team. Team. So team, yeah, we, we actually had a very little problem to bring the best talents on engineers and research the team, my cofounder Kevin Ryan used to lead the whole engineering side in the four the global group. He was managing some high 300 people, engineers. So we get a lot of engineers in the network previously.

So we had a very little time engineer talent. But my side.

on the global, all this ecosystem, finding the right fit of talent Actually ecosystem actually cost quite money than we.

Stephen: I'm curious, you know, you're talking about spending a lot of time and money going to other conferences.

I think you've transitioned to kind of hosting your own conference with the Bitcoin next conference in Bangkok. What were some of the, you know, trends or topics that came up during that conference and maybe some notable thought leaders that you were impressed with on stage?

Charlie: Great question. Great. Thanks for notice that yeah, we did our Bitcoin Bitcoin and, and Nest event. First one was in Singapore, in our office. Second one was in Bangkok in the dev green dev com. The third one was East Denver. We made our announcement with BBM Bridge integration with. five different ecosystem. The first The first one upcoming is actually end of this month in Dubai.

So we are kind of doing that first because we have a pretty big ecosystem ourself. We also have a lot of builders, a lot of partners who wants things to share. So instead, we are still kind of sponsoring or or with a lot of other event organizers, including big magazines, event, and a. a.

few other events in dance, maybe in the proof of talk. Others as well. We're going to Bitcoin Las Vegas this year as well, next month. But having our own ecosystem, like also big Bitcoin focused, you know, tailored frontier level of event, bring the solid leaders, bring our investor, bring some of the builders in our ecosystem to share. Let them share what they're building, let them share that, their insights. I feel it's very valuable. And and it's very tailored, high quality content.

We can make it very educational. So that's something we're gonna keep doing. And then we gain a lot of insights. So, back to the insights, right? I think, I think the Bitcoin DeFi is getting to very interesting. A lot of different ecosystem people, a few, like they wanna collaborate with us, so we're. We have those our own events, and because of the conversation we had with all these people who were listening to us in the event, we explore that kind of synergy. So that's very important and valuable. The second thing I think is Bitcoin innovation. You know, with Opca, right? All this upgrade of VIP, we still need proper time.

to. Statement within the

all the Bitcoin community. So that takes more time than we thought. So we learned a lot about different approach. Ctl, you know, csv, ash, obviously upca, obviously we're doing on Right assumption that we don't really have a BIP next two years. So that's kind of the rely on the existing Bitcoin script to do that.

It's kind of what are we focusing on, but we don't wanna be that kind of vision. Right? Having our layer, a A layer, like Bitcoin Nest event, we invite some people promoting opca very actively. We invite people who is doing the CT CT as. well. So all these technical sharing And let.

all the sound leaders to share from their different perspective educational.

Stephen: I, I love it. I love it.

What does the future of Bitcoin look like? Is it, you know, Bitcoin converging with ai? Is it something that we can't even think about now? Is it like, you know, mergers of acquisitions of the different sectors, whether it's DeFi, staking on Bitcoin Bitcoin bridge and bridge list systems?

Like, what does the future look like in your eyes?

Charlie: Great question. I think there's a lot of people talking about ai, our three, right? Like it's certainly that a lot of attention within the builders there. We exploring some interesting AI use cases. We Bitcoin, you Bitcoin, know, asset management and stuff like that for us. The trend we're seeing, it's really focused on how to activate Bitcoin liquid yield, liquid into yield, the yield products across how sustainable they are.

It doesn't have to be just the, the existing Bitcoin primitive. It could be other type of yield energy, could be very interesting sector. I've been spending quite some time. There's very interesting energy solutions trying to slow down the cost for Bitcoin mining, and there's some energy solution tool, you know, with some kind of deeping kind of infrastructure to provide interesting yield across carbon credits, other things along the ways.

So I think we, for me, I have to keep learning new things. We are. very sector agnostic. While we are focused on DeFi, but we don't want to say no to the new things, which we have some interesting product market fit, right? So we are a bit biased in terms of DeFi focus, but we don't want to say we are saying no to every single new trends.

I think for be a permission is network and ecosystem. We need to keep our mind open while have some kind of different type of priority that's focused on Big DeFi right now. We let's active market connect liquidity, let's empower other DeFi protocols to build with us us with Bitcoin, finality kind of infrastructure.

But there's a lot of new trends with new, interesting innovation happening. We need to keep learning until they really have the product market fit. We might not support them very heavily with liquidity, all the other things, but we definitely wants to learn with them, bring them our events, you know, get them.

on board with some kind of ecosystem clients.

We have the episode So I.

think very important to keep open.

Stephen: I'm, I'm curious, like, you know, you're based in, you know, out there in Asia. Are you, is it interesting that you know Bitcoin or those didn't catch as much fire as like the Solana meme Coin with everything that's happening with meme coins and meme tokens? And NFTs at the time are, is it kind of surprising that the hype around Bitcoin orals has died down when this should be like the moment where they, you know, they may be the most utilized, the most culture relevant?

Charlie: Surprisingly, but also not surprising in hindsight because all knows a lot of the meta protocols in the Bitcoin one, it's very hard for them to really transact it's cost. You know, quite a lot of time for the people actually being treating in Coin Solana. The experience treating on Bitcoin Bitcoin layer one with different type of protocols or like uni set, on different other what's is quite different experiences. The hype around on Bitcoin, quite lower quite a lot. Lot of them, attention being.

to. I think some of those protocol will come back, but I think for Bitcoin ecosystem right now is really focused on long-term sustainable use cases. Rather than just focus on a single asset protocols, somehow push them to another hundred x list on this kind more speculative play that happened in 2 23 with audience.

Stephen: Right.

Charlie: But it's. very rare case. It's kind of happened one off time. That's it. You can't really artificially engineer that kind pipe Again, with all this new dynamics going on. So I what I would say Bitcoin. Bitcoin will never happen at all. There's things like I feel kind of happening with a small scope, not as big as like two years ago, but it's be the main matter in Bitcoin ecosystem. I don't really think so, I don't think Bitcoin Bitcoin is the main compared to they define other things.

It's definitely a.

niche segment.

Stephen: Yeah. curious as we finalize the call, this has been great conversation. Tell me what is Bitlayer building in, you know, 2025? What do you have on the roadmap? What are you excited about that you're continuing to improve on internally?

Charlie: Great question. Thanks For the podcast, it's been great to talk to you as well. I I think the next step of us is to really have another wave of infrastructure operation our V two V2 properly successfully with the better infrastructure serving an active active market, right? We wanna work with. all Some of the new interesting institutions. We wanna working work with different communities across different regions.

We open up different market as we now, and I'm in Korea. I'm exploring the Korean community as well. So really just keep keep down building, launching the, the infrastructure as we promised. We're getting towards V two, and then we're gonna work on the v.

three, which is high performance, you know, uh, with parallel execution in our two. And why having the Bitcoin on the right? There's gonna be a lot of optimization, which is tweaking around the whole cost structure while having a high level of security on verification stuff. We're gonna keep doing, we're gonna keep contributing vvm while doing research together with very important team, so on as well. There's gonna be a very interesting event Bitcoin.

As I said, we are very technical driven at infrastructure products, but we are more and marketing toward the real business, real use cases. So the whole EP product or the institutional product we're designing with issuers, it's gonna be pretty exciting. It's gonna take a while. Hopefully we gonna launch something get some attraction by the end this year.

But more importantly is. our infrastructure. Wanna make sure This new layer of infrastructure around Bitcoin can enable more powerful, high performance, better use cases to, you know, to the users. Uh, That's what we need, right? You know, We talk about adoption. We need have good use cases with proper design, with proper performance and the security.

The users pay that attention. then, The.

whole adoption is not coming, Right. The user doesn't by themself.

Stephen: Right.

Charlie: will never stick around.

Stephen: I think that's been proven over the last 15 years of Bitcoin and cryptocurrency and the waves that we've had. And it's still why bitcoin's kind of leading the waves, that scalability might be an issue but that security is fundamental and hopefully you and others can unlock that, that, those use cases to make Bitcoin great again for a lack of a better word.

Charlie, this has been amazing. Where is the best place? I'm assuming Twitter's the best place to find you, or maybe you know, you have a medium or LinkedIn that you'd like to, you know, share some of your thoughts on where's the best place to reach you?

Charlie: Twitter is best. Yeah, i, I tweet, I share my insights. We share our updates and news on Twitter almost daily basis. Charlie, it's my handler. I think I'm just minutes away for anything or dms or anything. Yeah, feel free to reach out to me. Our had Twitter handler officially is billion labs, We over a million followers on Twitter. now. We do different type of, uh, Twitter spaces across different, like different partners,

We share a lot of news every day.

Stephen: I love it. I love it. We're gonna make sure to include those in the show notes. Charlie, Hu live, you know, get back to your restaurant, maybe get some dinner or lunch. I don't know what time zone exactly it is for you. But we appreciate you taking time outta your day to tell us how you know your organization and give us a lay of the lamb of what building on Bitcoin is really like.

Charlie: Thank you much, Stephen

Stephen: Great Thank you.

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