In February, Tron's founder Justin Sun unveiled plans for a Bitcoin layer-2 solution aimed at integrating its tokens with the Bitcoin network.

Tron, a layer-1 blockchain, is exploring the possibility of implementing a Bitcoin layer-2 solution that would accommodate a "wrapped" version of Tether (USDT), potentially facilitating the transfer of billions of dollars' worth of liquidity into the Bitcoin ecosystem.

Justin Sun outlined the roadmap for Tron's Bitcoin layer-2 solution in a post, emphasizing the ability for stablecoins and tokens to transition seamlessly between Tron and Bitcoin. He expressed optimism about the integration, stating that it would not only connect TRON directly with Bitcoin but also inject over $55 billion in value into the Bitcoin network, boosting its financial vitality.

According to reports, a Tron spokesperson indicated that the plans would likely involve creating a wrapped version of USDT. Currently, Tron hosts more than half of the $104 billion USDT supply issued across various blockchains, making it a significant player in the stablecoin market.

Tron emphasized its role in providing liquidity and stability, particularly through leading stablecoins like USDT. The integration is expected to attract new users to the Bitcoin ecosystem and expand its use cases, particularly in decentralized finance (DeFi).

Sun highlighted that a Bitcoin layer-2 solution would enable Tron-based tokens to seamlessly interact with Bitcoin while maintaining the speed and low fees characteristic of proof-of-stake (PoS) systems, coupled with the security of proof-of-work (PoW) and unspent transaction outputs (UTXOs).

While the plan is currently in the conceptual phase, Tron intends to leverage existing cross-chain protocols to bridge USDT and other tokens between Bitcoin and Tron. Additionally, collaboration with various Bitcoin layer-2 protocols is part of Tron's strategy.

However, the Tron spokesperson noted that USD Coin (USDC), a rival stablecoin to Tether, may face challenges as its issuer, Circle, ceased minting USDC on Tron in February.

Tron cited a surge in community interest in expanding Bitcoin's functionality and scalability as a primary motivation for considering the development of a layer-2 solution. They believe that building decentralized applications on Bitcoin could enhance its price dynamics, as fees would be denominated in BTC.

Furthermore, Tron's decentralized autonomous organization (DAO), Tron DAO, aims to develop a user-friendly wallet and toolset to support Bitcoin-based Ordinals and BRC-20 tokens.

In the broader industry landscape, cryptocurrency investment firm CoinShares predicted in January the emergence of a Bitcoin-based stablecoin in 2024 that could rival existing stablecoins in terms of speed and cost.

Currently, Liquid-based Tether (L-USDT) stands out as one of the few United States dollar-denominated stablecoins circulating on a Bitcoin layer-2 network.