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