Tiger Research Says Citrea Uses Bitcoin Security Directly for Layer 2, Draws Founders Fund Backing

Bitcoin layer-2 project Citrea has a competitive edge over existing L2 networks because of its technical architecture, according to Tiger Research.

The market research firm said May 16 that Citrea uses zero-knowledge proofs, or ZK, and BitVM to create a structure in which the Bitcoin network directly verifies transactions. Unlike many existing L2s that rely on a small group of signers for security, Citrea adopts a more decentralized verification model.

Tiger Research said Citrea’s asset transfer structure includes multiple participants, including signers, operators, watchers and challengers. The system is designed to prevent misconduct as long as at least one participant acts honestly.

The technical differentiation helped Citrea attract investors. Founders Fund, the venture capital firm led by Peter Thiel, made its first investment in the Bitcoin ecosystem through Citrea. Joey Krug, a partner at Founders Fund, called Citrea “the most advanced project in the Bitcoin L2 space in both team and technical architecture.”

Citrea has also taken a different launch approach. The project rolled out its mainnet before issuing a token and had more than 40 applications live at launch. It also introduced cBTC, a bridged Bitcoin asset, and its own stablecoin, ctUSD, as it seeks to expand its ecosystem.

Still, early results have been limited. Total value locked on the mainnet remains about $6 million. Roughly 33,000 users took part in a pre-launch participation event, but that momentum has not sufficiently carried over into mainnet usage, Tiger Research said.

Yoon Seung-sik, head of research at Tiger Research, said Citrea has completed technical validation by implementing an L2 that puts Bitcoin security to practical use and by launching its mainnet. The next step, he said, is making it easier for users to access in the Bitcoin environment the kinds of services they have used on Ethereum L2s such as Arbitrum and Base.