I've been thinking about this a lot lately: Bitcoin Series 2 foundations must start holding bitcoin in their treasuries. It makes too much sense for them not to.
And apparently i'm not the only one.
As someone who has seen this space grow, let me explain why the basics of Bitcoin Layer 2 should be listened to Suggestion and me
For years, bitcoin was called a “digital rock” – a solid source of value but not much else. But now with the explosion of Bitcoin Layer 2s, bitcoin is becoming a “programmed rock.” These layers add capabilities such as smart contracts and scalable solutions, making bitcoin more flexible than ever.
But here's the thing: these projects raise millions of dollars from VCs and investors, and most of that money ends up in fiat currencies like USD. That is a big mistake.
Why? Because fiat is a melting ice cube. Every year, he is losing 5-10% of its value due to inflation. The longer you keep it, the less it's worth. Bitcoins, on the other hand, have a compound annual growth rate (CAGR). about 70%. If these foundations kept their finances in bitcoin instead of fiat, their runway would not be exactly 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 could make or break a Tier 2 ecosystem.
Okay, okay, I get it – Bitcoin is volatile, and these fundamentals need some stability. Because of this, it makes sense to keep 3 to 4 years of runway in fiat. It would help to cover short term needs. But the rest? It should be in bitcoin. Over the long term, this strategy could double or even triple the footprint of these foundations, giving them the time and resources they need to succeed.
There is precedent for this too. Remember EOS? They raised $4.2 billion in 2018 and reportedly bought 164,000 bitcoins with it. Today, that bitcoin is worth around $16 billion – even though EOS itself fell off the map. Now, imagine if Bitcoin Layer 2 foundations did the same but actually used the bitcoin to grow and maintain their ecosystem. The potential is great.
At the end of the day, these foundations build on Bitcoin. They believe in the future, so why not keep it in their finances? Bitcoin is the best store of value out there. If you are running a Bitcoin Layer 2 foundation, stop holding depreciated fiat, and start holding bitcoin. It's not just a smart move – it is the to move
This article is a Take. The views expressed are entirely those of the author and do not necessarily reflect the views of BTC Inc or Bitcoin Magazine.
