Botanix to Shut Down Bitcoin Layer-2 Project, Citing Limited Demand for Programmable Bitcoin

Botanix announced it is winding down operations after concluding that programmable Bitcoin did not work in the current market. The project stated: "It did not work. " Data from DefiLlama showed Ethereum with approximately $39 billion in total value locked as of June 17, 2026.

Bitcoin's on-chain DeFi activity had less than $5 billion in total value locked on the same date, even though Bitcoin's total market capitalization was four to five times larger than Ethereum's. Rootstock, one of the longest-running Bitcoin smart-contract platforms, had about $101 million in total value locked.

Citrea, a newer Bitcoin zero-knowledge rollup, had less than $1 million in stablecoin market capitalization.

Babylon instead brings bitcoin into existing markets such as Ethereum DeFi, with Aave as its first use case. Tse noted that wrapped bitcoin products such as WBTC, Coinbase's cbBTC, and Circle's synthetic bitcoin product already allow BTC to circulate in DeFi. He said many bitcoin holders dislike giving up custody in exchange for synthetic tokens.

Orkun Mahir Kılıç, co-founder and CEO of Chainway Labs, developer of Citrea, said Bitcoin layer-2s should stop pitching themselves as general-purpose blockchains. He said the market already has mature ecosystems for trading, lending, consumer applications and perpetual futures. " He added that general-purpose ecosystem focus like competing with Ethereum applications on day one is hard to achieve.

Diego Gutierrez Zaldivar, CEO and co-founder of Rootstock Labs, said building a blockchain ecosystem is more like settling a new city than launching a new application. He said users do not adopt infrastructure because it is elegant. Gutierrez Zaldivar said the collapse of centralized lenders such as Celsius, BlockFi and Voyager validated the need for transparent, protocol-based alternatives.