Botanix will shut down its Bitcoin layer-2 network by July 9 due to low user engagement and insufficient revenue generation.
Botanix to Shut Down Bitcoin Layer-2 Network
Botanix has announced plans to discontinue its Bitcoin layer-2 network, urging users to withdraw their funds before the July 9 deadline. The project, which launched less than a year ago, struggled to find a viable market and generate sufficient revenue through transaction fees.
Initially designed to combine features of Ethereum with Bitcoin, Botanix aimed to provide a platform for trading, lending, borrowing, and staking entirely in Bitcoin. However, the company acknowledged that Bitcoin is primarily viewed as a reserve asset, limiting its use as a base for application development.
In a statement shared on X, Botanix expressed regret over the decision, noting that user engagement was insufficient to sustain operational costs. The firm highlighted a significant preference among investors for using wrapped Bitcoin on Ethereum layer-2 networks, which they deemed more cost-effective despite centralization risks.
“It is with a heavy heart that we announce we are winding down the Botanix network,” the company stated on X. “This decision is the hardest one we have made in four years.”
Despite raising $8.5 million in a funding round in 2024, supported by notable Bitcoin figures, Botanix struggled to attract users and maintain a competitive edge in the DeFi space. The network's total value locked plummeted from a peak of $26.3 million in September to just $120,000 as of Wednesday, with daily fee generation amounting to a mere $10.
Botanix Labs, the company behind the initiative, had ambitious plans for the network, including the launch of a native token, but failed to achieve a product market fit. Co-founder and CEO Willem Schroé previously emphasized the importance of adhering to Bitcoin's principles of self-custody, but ultimately, user behavior did not align with the network's goals.
