SatLayer Overview
Last updated
Last updated
Think of SatLayer as a marketplace where we connect Bitcoin restakers, BVS developers and Operators to bring crypto-economically secured services to life.
BTC restakers enhance economic security by depositing and staking their Bitcoin assets, delegating them to Operators. If an Operator acts maliciously, these assets face the risk of being slashed, reinforcing crypto-economic security. In exchange, restakers earn rewards.
Bitcoin Validated Services (BVS)'s developers can address the cold-start problem—where new services and protocols are initially insecure—by launching services secured through SatLayer using staked BTC. These services, called Bitcoin Validated Services (BVS), derive their security from the amount of BTC backing them (i.e staked BTC).
BVS Developers are also responsible for maintaining both the on-chain BVS contracts and the off-chain BVS operator software, as well as overseeing reward distribution.
Operators are responsible for deploying and running BVS by ensuring a stable connection to the network, a secure execution environment, and adequate hardware specifications. In exchange for providing the hardware, computing resources, and expertise required to operate the BVS, Operators take a portion of the rewards as their fee.
In addition, operators can choose which BVS applications to secure where their fees increase and decrease based on their selection. As a permission-less system, SatLayer does not dictate how much stake, or how many BVSs, an operator needs. The market will decide which BVSs gain the most support, and which operators can win the trust and delegation of re-stakers.
SatLayer offers the above-mentioned framework for developers to build BVS systems secured by BTC assets staked in our contracts. It features a clean and straightforward abstraction while allowing flexibility for both on-chain and off-chain logic and components. Similar to next.js or react, it acts as a modular lego block for developers' customization and creativity.
A BVS relies on economic incentives and risk mechanisms to discourage malicious behavior in off-chain processes.
The economic defense works as follows:
Each BVS enforces a set of "slashing conditions" within its on-chain contract. When a slashing condition is met, operators who violate these rules have a portion or all of their stake confiscated. BVS developers have considerable flexibility in managing these slashing conditions and outcomes — slashed assets can be redirected as protocol revenue or permanently burned by sending them to a null address.
This structure creates a financial incentive for node operators to behave responsibly, as they risk losing their collateral and assets if malicious behavior is detected. Meanwhile, stakers are motivated to deploy assets with trustworthy operators and monitor for potential risks.
In practice, slashing conditions for a real-world BVS are likely complex and often require cryptographic proof of malicious activity. Slashes are validated and executed on-chain. Thus, developers must ensure that (a) slashing remains affordable to execute to deter unchecked malicious activity, and (b) slashing is secure against misuse to prevent false triggers.
By accepting the risks associated with slashing, stakers earn rewards as defined by the BVS developers. These rewards may come from the BVS’s native tokens or other specified assets.
