# Architecture

Velar's architecture consists of the following key components:

## Bitcoin Base Layer

This provides the underlying security and decentralization for the ecosystem. Velar leverages Bitcoin's proof of work consensus mechanism to validate transactions and secure the network.

## Bitcoin Layer 2 Solutions

Velar operates on various Bitcoin Layer-2 scaling solutions to enable fast and low-cost transactions while reducing the load on the Bitcoin base layer. These Layer-2 platforms also provide smart contract functionality, allowing for the development of sophisticated DeFi applications.

Currently, Velar is live on the following Bitcoin Layer-2 solutions:

\- Stacks

\- Bitlayer

\- BOB

As Velar progresses, the protocol aims to expand its compatibility and go live on EVM-compatible Bitcoin Layer-2 solutions. This will further enhance Velar's interoperability and accessibility, enabling developers to build DeFi applications using familiar tools and programming languages.

By leveraging multiple Bitcoin Layer-2 solutions, Velar ensures a robust and flexible infrastructure that can adapt to the evolving needs of the DeFi ecosystem while maintaining the security and decentralization benefits of the Bitcoin base layer.

## DeFi Applications

The DeFi products like decentralized exchanges, lending protocols etc. are built on top of the Stacks layer. This is where the end-user DeFi services reside.

## Decentralized Identity

Velar will integrate decentralized identity solutions to enable users to manage identities without relying on centralized authorities.

## Interoperability

The protocol is designed for interoperability between various crypto assets. This increases liquidity and enhances usability for end users.

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