The data does little to dispel the skepticism. DefiLlama shows Ethereum with around $39 billion in total value locked, while Bitcoin’s onchain DeFi activity sits at less than $5 billion, despite its total market cap being four to five times bigger than Ethereum’s.
Rootstock, one of the longest-running Bitcoin smart-contract platforms, has about $101 million in TVL, according to DefiLlama. Citrea, a newer Bitcoin zero-knowledge rollup, has less than $1 million in stablecoin market capitalization.
Brand new economy
Yet the builders still standing in the sector argue Botanix’s failure does not prove Bitcoin utility is dead. Instead, they say it shows the market is abandoning a more naïve thesis: that Bitcoin needs its own version of Ethereum or Solana.
David Tse, co-founder of staking project Babylon, said the problem with many Bitcoin layer-2 projects is that they are “trying to bootstrap a brand new economy.”
Babylon’s approach, he said, is different. Rather than create a new application ecosystem on Bitcoin, the project aims to bring bitcoin into existing liquid markets such as Ethereum DeFi.
“We’re bringing bitcoin to Ethereum as the first use case,” Tse said. “Aave is the biggest DeFi protocol on Ethereum. So we’re bringing it to the biggest center of the smart-contract economy.”
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