I’ve been thinking about this lately: Bitcoin Layer 2 foundations need to start holding bitcoin in their treasury. It makes a lot of sense for them not to.
And apparently I’m not the only one.
As someone who has watched this space evolve, let me explain why the fundamentals of Bitcoin Layer 2 should be listened to by me and Molly.
For years, bitcoin has been known as a “digital rock”—a solid store of value but not much else. But now with the explosion of Bitcoin Layer 2s, bitcoin is becoming “programmable rock.” These layers add functionality like smart contracts and scaling solutions, making bitcoin more versatile than ever.
But here’s the thing: these projects raise millions of dollars from VCs and investors, and most of that money ends up sitting in fiat currencies like USD. That is a big mistake.
Why? Because fiat is a melting ice cube. Every year, it loses 5-10% of its value due to inflation. The longer you hold it, the lower it becomes. On the other hand, bitcoin has a Compound Annual Growth Rate (CAGR) of around 70%. If these foundations held their treasury in bitcoin instead of fiat, their runway would not only stay the same—it would grow.
Imagine having 70% more resources each year to fund developers, grants, and projects. That’s the kind of edge that can make or break a Layer 2 ecosystem.
Okay, okay, I get it – Bitcoin is volatile, and these fundamentals need some stability. Because of this, keeping 3 to 4 years of runway in fiat makes sense. It can help deal with short-term needs. But others? It should be bitcoin. Over time, this strategy can double or triple the traffic of these foundations, giving them the time and resources they need to succeed.
There is a precedent for this. Remember EOS? They raised $4.2 billion in 2018 and reportedly bought 164,000 bitcoins with it. Today, that bitcoin is worth about $16 billion—even though EOS itself fell off the map. Now, imagine if Bitcoin Layer 2 foundations did the same but actually used their bitcoin to grow and support their ecosystem. Great power.
At the end of the day, these foundations build on Bitcoin. They believe in its future, so why don’t they keep it in their wealth? Bitcoin is the best store of value out there. If you use the Bitcoin Layer 2 foundation, stop holding depreciating fiat, and start holding bitcoin. It’s not just a smart move—it is i deliver.
This article is a Take it. The views expressed are entirely those of the author and do not reflect those of BTC Inc or Bitcoin Magazine.