Summary
- Botanix announced it will close its Bitcoin layer-2 network, urging users to withdraw their funds.
- The initiative did not achieve a strong product market fit and faced low fee generation.
- Botanix Labs raised $8.5 million in 2024, with backing from various Bitcoin influencers.
On Wednesday, Botanix requested users to withdraw their funds, revealing plans to shut down its Bitcoin-based layer-2 network less than a year post-launch.
This project, which integrated features of Ethereum with Bitcoin, cautioned users that their funds would become unrecoverable after July 9. Botanix also released a comprehensive postmortem regarding its DeFi efforts on X platform.
Initially promoting its network as a platform for trading, lending, borrowing, and staking “entirely in Bitcoin,” Botanix acknowledged on Wednesday that the top cryptocurrency remains largely seen as a reserve asset rather than a foundation for application development.
The project observed that investors have opted for wrapped Bitcoin on versatile Ethereum layer-2 networks as a “more affordable and simpler” method to utilize their assets, despite any risks or concerns linked to centralization.
It is with a heavy heart that we announce we are winding down the Botanix network.
This decision is the hardest one we have made in four years, and we want to share the reasoning openly because the people who backed us, built with us, and used what we shipped deserve more than a…
— Botanix 🕷️ (@botanix) June 9, 2026
Botanix was intended to function as an “EVM-equivalent” network, enabling developers acquainted with Ethereum’s programming to transfer existing applications with minimal adjustments.
The firm behind the network, Botanix Labs, secured $8.5 million in funding during a seed round in 2024, with participation from established Bitcoin influencers such as Dan Held and Eric Wall, as reported by Crunchbase.
Willem Schroé, co-founder and CEO of Botanix Labs, informed Decrypt last July that the network incorporated “systems that honor [Bitcoin’s] core principles of self-custody,” including a federation of independent node operators to avert unilateral control over Botanix.
The project mentioned in its X post that Botanix had plans to launch its own token; however, the network never reached a product market fit that justified it. Moreover, Botanix faced challenges in attracting attention and generating revenue, citing competition from established players.
“We were, and still are, believers in decentralization,” Botanix emphasized. “The current trend in on-chain growth relies on distribution, and any team developing base-layer infrastructure today is swimming against that current.”
Ultimately, Botanix users tended to utilize their Bitcoin primarily for yield generation, rather than engaging with the network frequently enough to generate substantial fees. This resulted in “a user base that costs more to serve than it generates.”
As of Wednesday, the total value of digital assets locked in smart contracts on Botanix was $120,000, a significant drop from a high of $26.3 million in September, according to DeFi Llama. In addition, the network had produced $10 in fees over the preceding day.