Layer 2 protocols face a critical challenge: connecting their tokens back to Bitcoin without introducing counterparty risk. Wrapped tokens like WBTC, RBTC, and sBTC solve the technical problem but create a trust problem, requiring custodians and intermediaries that undermine blockchain's trustless nature.

ML takes a fundamentally different approach. Rather than wrapping Bitcoin, ML achieves direct interoperability through native cross-chain swap (atomic swap) technology. This is the defining utility of ML and what sets Mintlayer apart in the Bitcoin Layer 2 ecosystem.

Direct Bitcoin Interoperability: The Core Utility

The primary utility of ML is that it can be swapped directly with Bitcoin in a trustless, peer-to-peer manner. ML and all MLS-01 tokens built on Mintlayer are directly interoperable with Bitcoin without centralized exchanges or intermediaries. Users move between BTC and ML without ever giving up custody of their assets.

When you swap ML for BTC, you're not trusting a custodian to hold your Bitcoin and issue a representative token. You're executing a cryptographically secured atomic swap where either both sides' requirements are met or neither side completes the transaction. Think of time-locked escrow using a smart contract instead of a custodian. The technology is based on a specialized smart contract called a Hash Time-Locked Contract (HTLC).

Networks like Ethereum use DEXs like Uniswap which rely on liquidity pools. Mintlayer has RioSwap, the first decentralized exchange built specifically for peer-to-peer Bitcoin cross-chain swaps (atomic swaps). Unlike traditional DEXs relying on liquidity pools, RioSwap facilitates direct peer-to-peer trades with a specialized order book and matching system to directly link users.

For Bitcoin holders who want to participate in DeFi, this removes a significant barrier. Traditional DeFi on Ethereum requires converting BTC to WBTC, trusting custodians with billions of dollars. Mintlayer eliminates this step entirely.

Core Network Utility Functions

Beyond Bitcoin interoperability, ML serves as the foundation of Mintlayer's network operations.

Proof-of-Stake Consensus. ML powers Mintlayer's proof-of-stake consensus mechanism. Token holders can stake ML to participate in block production and earn staking rewards. The minimum requirement to run a node is 40,000 ML, though users with smaller holdings can participate through delegated staking by pooling their tokens.

Transaction Fees. ML is used for all transaction fees on the Mintlayer network. Although in the future, block signers may accept other MLS-01 tokens for fees, but ML will always be accepted network-wide.

Token Issuance. Issuing new MLS-01 fungible tokens on Mintlayer requires paying fees in ML. This applies whether tokens are created through MintFun or directly on the network. As more projects launch, each issuance creates ML demand.

NFT Minting. Minting MLS-03 non-fungible tokens requires transaction fees paid in ML, covering NFTs for art, collectibles, tokenized real-world assets, and any other unique on-chain assets.

Smart Contract Execution. Developers use ML to execute smart contracts on the network. As the ecosystem grows and more decentralized applications launch, smart contract activity drives ongoing ML demand.

Ecosystem Services: Building on Bitcoin

ML provides access to development and infrastructure services through both RBB Lab (Mintlayer's core development team) and Mintlayer Web Services (MWS), the protocol's product studio. Builders can spend ML to purchase consulting, technical support, and development services, helping teams create decentralized applications or integrations on Mintlayer.

MWS provides comprehensive infrastructure for institutions and enterprises building on Bitcoin, including core blockchain infrastructure, compliance and risk systems, real-world asset solutions, and fintech integrations. The service model extends to specialized financial products including bonds, loan services, commodities, and stablecoins.

This creates a direct connection between ML and ecosystem growth. Teams building on Mintlayer have operational reasons to hold ML beyond transaction fees. As the developer ecosystem and enterprise adoption expand, demand for these services grows proportionally.

Tokenized Equity: Redefining Capital Formation

Mintlayer is demonstrating another dimension of ML utility through its Pre-Series A fundraising round. For the first time, qualified investors can access tokenized equity in Mintlayer itself through the purchase of ML coins. This merges utility, and new methods for fund raising into one compliant framework, providing real ownership stakes with the transparency and efficiency of blockchain technology. While this is just one example of ML utility, it demonstrates the broader potential for tokens built on Mintlayer to represent genuine real world value.

Growing Ecosystem and Future Vision

ML token utility is fundamentally about solving the biggest problem in Bitcoin DeFi: how to participate without giving up self-custody or trusting intermediaries. By enabling direct Bitcoin interoperability through atomic swaps, ML provides a bridge between Bitcoin's security and DeFi's functionality without the compromises of wrapped tokens.

The protocol's design philosophy is that ML should be genuinely useful across the entire stack, not serve as a speculative governance token. Every core function of the network, from consensus to fee payment to token issuance to ecosystem services, requires ML. This creates organic demand tied directly to network activity rather than speculation. RioSwap demonstrates this model in action, providing the first DEX where Bitcoin holders can trade trustlessly without wrapped assets.

Looking forward, Mintlayer's vision extends beyond current functionality. The planned flexibility for block signers to accept various MLS-01 tokens for fees creates a more user-friendly experience while maintaining ML's central role. As DeFi infrastructure grows, unique applications integrating other tokens will increase overall demand for ML to power the ecosystem. Developers have sought Bitcoin-native DeFi solutions for years, but technical limitations prevented practical implementation. Mintlayer's codebase is built from the ground up to be simple and elegant for developers to integrate.

As institutional capital seeks ways to put Bitcoin to work in DeFi while maintaining security and compliance, solutions like Mintlayer that eliminate third-party custody become increasingly valuable. ML isn't just a utility token for a single application. It's the infrastructure token for an entire Bitcoin DeFi ecosystem built on the principle that users should never have to sacrifice custody for functionality.