BRC2.0 Upgrade Brings Smart Contracts and DeFi to Bitcoin’s Base Chain in 2025

• What Does the BRC2.0 Upgrade Actually Do?
• How Will This Change Bitcoin Development?
• What Impact Could This Have on Bitcoin's Ecosystem?
• How Does BRC2.0 Compare to Other Bitcoin Programmable Layers?
• Where Does Bitcoin Stand in the NFT Market?
• What's Next for Bitcoin's Development?
• Frequently Asked Questions

In a groundbreaking move for the Bitcoin ecosystem, the BRC2.0 upgrade has successfully integrated Ethereum-style smart contracts and decentralized finance (DeFi) capabilities directly onto Bitcoin's base layer. This development, spearheaded by key players including Best In Slot and the Layer 1 Foundation, represents a significant leap forward in Bitcoin's programmability while maintaining its renowned security. The upgrade comes at a crucial time as Bitcoin faces increasing competition from other programmable blockchains, offering new possibilities for developers and investors alike in the cryptocurrency space.

What Does the BRC2.0 Upgrade Actually Do?

The BRC2.0 upgrade technically integrates ethereum Virtual Machine (EVM) functionality directly into the BRC-20 core indexer. This means developers can now create smart contracts on Bitcoin that offer similar composability and programmability to Ethereum's ecosystem, but with Bitcoin's superior security backing them. Eril Binari Ezerel, CEO of Best In Slot, describes it as "bringing Ethereum's flexibility to Bitcoin's robustness." The upgrade eliminates the need for bridges or wrapped assets, allowing native combination of existing elements within Bitcoin's architecture.

How Will This Change Bitcoin Development?

For the first time, developers can write Ethereum-style smart contracts directly for bitcoin without needing to learn new tools or languages. Domo, creator of BRC20, calls this "the holy grail" combining Bitcoin's decentralization with EVM's proven virtual machine. In practical terms, this opens doors for decentralized applications (dApps) on Bitcoin - something that's been sorely lacking compared to other chains. While BRC-20 tokens have seen over $3 billion in trading volume since their 2023 debut, they've been limited mostly to meme coins due to Bitcoin's previous lack of programmability.

What Impact Could This Have on Bitcoin's Ecosystem?

The new smart contract functionality could dramatically expand use cases for native Bitcoin assets. Industry observers anticipate renewed interest in Bitcoin-based DeFi, with potential spillover effects into inscriptions and other Bitcoin-native asset classes. Recent data shows BRC-20 maintaining strong activity with 5,636 BTC in on-chain volume over the past six months - more than double Runes' volume and five times that of Ordinals. The BTCC exchange has reported increased trading activity in Bitcoin-based tokens since the upgrade announcement.

How Does BRC2.0 Compare to Other Bitcoin Programmable Layers?

BRC2.0 joins a growing number of programmable layers for Bitcoin, including the WASM-based Alkanes standard. What sets BRC2.0 apart is its direct integration with Bitcoin's base LAYER without requiring trust in external execution layers or bridges. The Alkanes standard recently accounted for over a third of all meta-protocol transactions in Q3 2025, demonstrating strong demand for Bitcoin programmability solutions. BRC2.0's EVM compatibility gives it immediate access to Ethereum's vast developer ecosystem and tooling.

Where Does Bitcoin Stand in the NFT Market?

Despite the smart contract advancements, Bitcoin remains a minor player in the NFT space compared to Ethereum. Total NFT sales since 2017 reached $71.55 billion, with Ethereum commanding 64.78% ($46.35 billion) of that market. Bitcoin ranks third with $5.69 billion in sales, though only $123 million were identified as wash trading. The past 30 days have seen a 22% increase in NFT sales volume across all chains, totaling $2.1 billion.

Source: Coinmarketcap

What's Next for Bitcoin's Development?

The BRC2.0 upgrade represents a significant step in Bitcoin's evolution from purely "digital gold" to a more versatile blockchain platform. While maintaining its core security and decentralization values, Bitcoin now stands to attract a new wave of developers and projects that previously WOULD have chosen Ethereum or other smart contract platforms. As the BTCC research team notes, "This could be the beginning of Bitcoin's second act as both a store of value and a platform for innovation."

This article does not constitute investment advice.

Frequently Asked Questions

What is the BRC2.0 upgrade?

The BRC2.0 upgrade integrates Ethereum VIRTUAL Machine functionality directly into Bitcoin's BRC-20 protocol, enabling smart contracts and DeFi capabilities on Bitcoin's base layer.

Who developed the BRC2.0 upgrade?

The upgrade was developed by Best In Slot, BRC20 creator Domo, and the Layer 1 Foundation, combining expertise from across the Bitcoin ecosystem.

How does BRC2.0 affect Bitcoin's security?

BRC2.0 maintains Bitcoin's native security while adding programmability, offering Ethereum-like features but secured by Bitcoin's robust blockchain.

Can I now build dApps on Bitcoin?

Yes, developers can now build decentralized applications on Bitcoin using familiar Ethereum tools and programming patterns through the BRC2.0 upgrade.

How does Bitcoin's NFT market compare to Ethereum's?

While growing, Bitcoin's NFT market ($5.69B total sales) remains much smaller than Ethereum's ($46.35B), though with significantly less wash trading.