Botanix asked users to withdraw funds on Wednesday, disclosing plans to wind down its Bitcoin-based layer-2 network less than a year after it debuted.
The project, which combined elements of Ethereum’s design with crypto’s oldest network, warned users that their funds would become unrecoverable after July 9. At the same time, Botanix shared a lengthy postmortem on its DeFi push in an X post.
Previously billing its network as a way for users to trade, lend, borrow, and stake “all in Bitcoin on Bitcoin,” Botanix acknowledged on Wednesday that the leading digital asset by market cap is still primarily viewed as a reserve asset—not a network for building applications.
The project added that investors have essentially voted with their feet, continuing to favor wrapped Bitcoin on general-purpose Ethereum layer-2 networks as a “cheaper and easier” way to leverage their holdings, regardless of any concerns or risks tied to centralization.
Botanix was designed as an “EVM-equivalent” network, allowing developers familiar with Ethereum’s programming language to port existing applications with little modification.
The company behind the network, Botanix Labs, secured $8.5 million in total funding during a seed round in 2024, which saw participation from longtime Bitcoin influencers such as Dan Held and Eric Wall, according to Crunchbase.
Botanix Labs co-founder and CEO Willem Schroé told Decrypt last July that the network featured “systems that honor [Bitcoin’s] core principles of self-custody,” such as a federation of independent node operators to prevent unilateral control over Botanix.
The project noted in its X post that Botanix planned to debut its own token, but the network never achieved product market fit in a way that warranted it. On top of that, Botanix struggled to gain attention flow and revenue, it said, because of competition from established firms.
“We were, and still are, believers in decentralization,” Botanix underscored. “The current direction of on-chain growth is running through distribution, and any team building base-layer infrastructure today is rowing upstream against that current.”
Finally, Botanix users were more likely to use their Bitcoin as a way to generate yield, as opposed to transacting on the network frequently enough to produce significant fees. That ultimately created “a user base that costs more to serve than it generates.”
On Wednesday, the value of digital assets deposited in smart contracts on Botanix stood at $120,000, down from a peak of $26.3 million in September, according to DeFi Llama. Meanwhile, the network had generated $10 in fees over the past day.
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