Sundial Launches Bitcoin L2 Testnet With Live Cardano Bridge

Sundial Protocol launched its latest public testnet on August 20, bringing several parts of its Bitcoin-focused Layer 2 infrastructure into a single testing environment. The release includes an active dashboard, a working bridge, staking functionality, Bitcoin Locker infrastructure and yield visualization.

The project positions Sundial as an eUTXO-native Layer 2 built for Bitcoin yield applications, with Cardano providing part of the programmable interoperability layer connecting Bitcoin liquidity with eUTXO-based decentralized finance.

Sundial Opens Its Bitcoin Layer 2 to Public Testing

The August release moves Sundial beyond the narrower Bitcoin Yield Testnet introduced earlier this year.

Users can now access a public dashboard and test transactions, staking functions, bridging and yield-related infrastructure from the same environment.

At the center of Sundial’s design is Bitcoin Locker infrastructure, which manages Bitcoin positions within the protocol. Sundial is developing yield products intended to generate returns from financial activity rather than relying on a separate token emission model.

The project describes its broader Layer 2 architecture as an optimistic rollup using fraud proofs, with Bitcoin Layer 1 providing the underlying security and settlement environment.

Activity is processed above the base chain while retaining a path back to Layer 1 for settlement and dispute resolution. The architecture is built around the UTXO ledger model, creating a technical connection with Cardano’s extended UTXO design.

Sundial is therefore better described as Bitcoin-focused infrastructure with Cardano interoperability rather than as a conventional Cardano Layer 2.

Charms Connects Bitcoin and Cardano

The new testnet includes a Bitcoin to Cardano bridge built around the Charms protocol.

Charms develops programmable UTXO infrastructure that can operate across Bitcoin and Cardano, allowing assets and application logic to move between the two ecosystems without adopting an account-based execution model.

Sundial has previously worked with Charms through Alchemy, its Bitcoin reserve infrastructure for Cardano. The current Layer 2 testnet extends that relationship into an active interoperability environment.

According to Sundial’s August announcement, the dashboard is operational and the bridge is working. Users can therefore test the project’s Bitcoin and Cardano infrastructure together rather than only through earlier demonstrations or architecture documents.

Sundial’s Cardano-related development has also used technologies including Aiken, Plutarch and Scalus for smart contract components.

The exact trust model of the current Charms testnet route is not fully detailed in the launch announcement. Sundial’s broader technical material describes zero-knowledge and trust-minimized bridge designs, but the specific assumptions of the live testnet route depend on the implementation being used.

Testnet Expands Sundial’s Earlier Bitcoin Yield Work

The latest release follows several development milestones during 2026.

Sundial launched its Bitcoin Yield Testnet in April, followed by a Hacken security review of the testnet and Bitcoin Yield Locker components. According to the published results, 11 issues were identified, with none rated above medium severity, and the reported findings were subsequently addressed.

The project also opened additional crowdsourced security testing through HackenProof and continued Cardano-focused Bitcoin infrastructure work through initiatives such as Alchemy.

The August 20 testnet is broader because Layer 2 execution, staking, bridging and the user dashboard are now available within the same public environment.

Not every planned DeFi component is operational yet. Lending pools, additional vault structures and other financial applications remain part of the development roadmap, while Sundial has not published confirmed TVL figures or a fixed mainnet launch date.

For Cardano, the concrete change is that the interoperability layer can now be tested as a working system. The bridge is active, the dashboard is public and Sundial’s Bitcoin-focused Layer 2 can now be used alongside Cardano connectivity within the same test environment.