DigitalToday reporter Chi-gyu Hwang (황치규) writes that Bitcoin layer2 project Botanix announced it will shut down, saying it did not work in the current market and at this point in time.

A recent CoinDesk report said Botanix concluded that efforts to make bitcoin programmable and integrate it into real financial activity are not at the point ordinary users want right now.

According to DefiLlama, Ethereum's total value locked is about $39 billion, while bitcoin on-chain DeFi activity is less than $5 billion. Considering bitcoin's market capitalisation is 4 to 5 times larger than Ethereum's, the gap stands out even more. Total value locked on Rootstock, the oldest bitcoin smart contract platform, is about $101 million. The stablecoin market capitalisation on Citrea, a new bitcoin zero-knowledge rollup, is only about $23 million.

Even so, industry developers argue Botanix's failure does not mean the death of bitcoin utility itself. David Tse (데이비드 체), co-founder of staking project Babylon, pointed to many bitcoin layer2 projects and said, "The problem was trying to bootstrap a completely new economy from scratch."

Babylon chose an approach of bringing bitcoin into existing liquidity markets such as Ethereum DeFi rather than building a new bitcoin-only ecosystem. He said, "Aave, Ethereum's largest DeFi protocol, is bringing in bitcoin."

He also said wrapped bitcoin products such as WBTC and Coinbase's cbBTC work by depositing bitcoin and receiving a synthetic token in return, and noted that many holders are reluctant to hand over bitcoin ownership and custody rights in the process.

Orkun Mahir Kilic (오르쿤 마히르 클르츠), co-founder and CEO of Citrea developer Chainway Labs, said, "It makes no sense to try to do the same thing as Solana from day one." He said bitcoin layer2s should focus on products that are only possible with bitcoin security and payment systems, rather than positioning themselves as general-purpose blockchains.

Diego Gutierrez Zaldivar (디에고 구티에레즈 잘디바르), CEO of RootstockLabs, said Botanix's shutdown left a lesson that "building a blockchain ecosystem is closer to settling a new city than solving technical problems." He added, "The more speculative elements decrease, the more productive use increases," and said, "Discussion about bitcoin-collateralised lending is more active now than it was a year ago."