Summary:
The Bitcoin L2 star project Botanix announced a gradual shutdown, with the team admitting to facing severe challenges from the failure of its business model and the prevailing trends. Users are urged to withdraw all assets before July 9, 2026.
Author | @botanix
Compiled by | Wu Says Blockchain
TL;DR:
Botanix Network announces gradual shutdown, reminding users to withdraw assets by deadline: The team has decided to end a four-year Bitcoin Layer 2 experiment and issues an urgent reminder that users must withdraw Bitcoin and other assets by July 9, 2026, or other assets or tokens on the network may be permanently unrecoverable.
The timing for Bitcoin’s practicality has not yet arrived, DeFi demand still relies on Ethereum L2: The consensus in the real world still views Bitcoin as a reserve asset. In practical applications, WBTC on Ethereum L2 has been able to meet the borrowing and yield needs of most users, with convenience overcoming the pure vision of decentralization, leading to a much narrower practical application scenario for Bitcoin-specific L2 than expected.
Token strategy fails, on-chain economy concentrates towards centralized distribution channels: The market is no longer buying into brainless token issuance strategies that lack product-market fit (PMF). Meanwhile, industry liquidity and user attention are accelerating towards platforms with user entry points (such as major CEX and TradFi giants), and foundational infrastructure teams are facing a structural dilemma of rowing upstream.
Infrastructure costs becoming the most fatal economic reality: The low-frequency value storage users attracted by the network cannot generate enough high-frequency trading volume. In the trend of users gravitating towards convenient channels, the maintenance costs for users remaining on the decentralized infrastructure layer have far exceeded the meager fee income they can bring.
BINK showcases future experience, but the project overall chooses a dignified exit: The team launched BINK, the industry’s first self-custodial Bitcoin bank supporting email login, in an attempt to break the deadlock, but there is no time left to validate it under the current circumstances. The team stated that they would rather stop while their reputation and resources are intact than force this experiment into a meaningless dead end.
Botanix Labs completed an undisclosed $3 million Pre-Seed round around June 2023, led by UTXO Management and others; on May 7, 2024, it announced the completion of an $8.5 million Seed round, led by Polychain Capital, Placeholder Capital, Valor Equity Partners, and ABCDE, with several angel investors participating, bringing the total funding to $11.5 million.
With a heavy heart, we announce the gradual shutdown of the Botanix Network.
This is the hardest decision we have made in four years. We have decided to share the reasons behind it publicly because those who supported us, built alongside us, and used our products deserve a detailed explanation rather than a cold shutdown notice.
First, a crucial reminder to the Botanix community: Please be sure to withdraw your Bitcoin and other assets by July 9, 2026.
When the project launched in 2022, our vision could be summarized in one sentence: to bring true practicality to Bitcoin. However, in actual implementation, what we have spent nearly four years building is far grander and more complex than this sentence suggests. We attempted to create a blockchain based on Bitcoin, making it a platform for Bitcoin applications, truly finding the product-market fit (PMF); and we resolutely did not rely on token issuance to stimulate growth, create false users, or fabricate practicality. In the past cycle, almost all new chains have followed the same script (issuing tokens forcefully without PMF, designing incentive mechanisms, inflating data), but we have never believed this to be a long-term viable strategy. What we wanted to validate was whether a Bitcoin chain could earn users’ trust solely based on the real products built on it and the market value created by making Bitcoin the only core economic element.
It turns out we did deliver. The Spiderchain mainnet not only successfully launched but also operated stably for a whole year, maintaining a 100% online rate with zero security incidents on this entirely new cryptographic architecture. We built Dynafed (Dynamic Federation), upgrading Spiderchain from a static multisig set to a rotating decentralized federation—this was considered a technical milestone that most in the industry believed was impossible to achieve on Bitcoin without sacrificing trust assumptions. We processed 25 million transactions, served 200,000 wallets, and the on-chain capital flow reached tens of millions of dollars. Every piece of data was organically grown through product efforts, with no token issuance, no airdrops, no point activities, and no tricks to create false prosperity. Chainlink, Morpho, GMX, Dolomite, Fireblocks, Alchemy, Galaxy, and OKX Wallet all completed integrations with us. We also launched BINK, a new Bitcoin bank on iOS and Android, achieving the industry’s first self-custodial Bitcoin wallet experience supporting email login, as well as native Bitcoin yield and the world’s lowest Bitcoin lending rates. All of this was built on our complete control over the underlying infrastructure.
We say this not to defend ourselves. The protocol itself is not the problem, the product is indeed usable, and our team and ecosystem have worked together to deliver an excellent answer. We poured our hearts into this experiment: the mainnet has been running for over a year, and the project has lasted nearly four years.
However, after experiencing the daily market struggles, our honest conclusion is: it has failed, at least in the current market environment and time frame, this path is not viable.
We want to share the lessons learned from this. It must be candid that there are both conclusions we firmly believe and speculations still under consideration. We would rather clearly state the difference between the two than pretend to understand.
First, we must face the timing issue. Making Bitcoin practical, programmable, and truly integrated into financial activities is not yet the focus of real-world users. The current market consensus still rests on Bitcoin’s attributes as a reserve asset, its monetary and political status, and the underlying conservatism. These grand narratives are far more pressing than the focus that Bitcoin L2 hopes to draw attention to. I still believe Bitcoin will eventually become practical, but “believing the destination exists” and “predicting when to arrive” are two different things, and no one can do the latter. There is even a possibility that this destination may never arrive, and Bitcoin’s ultimate fate is to remain a reserve asset. If that is the case, what we have built will never have a market, and no amount of time and money spent will help.
The second is the real dilemma of tokens. We originally did intend to issue tokens eventually. We always believed that tokens are a new form of equity closer to an IPO rather than an airdrop, and should be launched when PMF is achieved and the timing is right. However, that so-called “mature timing” has never appeared. The increasingly evident trend over the past year is that the market is no longer buying into this narrative, even for relatively cautious token issuance projects. The performance of tokens across the industry has largely fallen short of expectations, and projects entering with tokens have not achieved the growth or PMF that this model was supposed to bring.
Third, where is the real demand for Bitcoin DeFi? For the vast majority of existing use cases (borrowing, yield, leveraged exposure), using WBTC on mature general-purpose L2 is already completely sufficient. Users have voted with their feet: for almost everyone wanting to engage in Bitcoin-denominated DeFi, the trust mechanism for wrapped Bitcoin on Ethereum is acceptable. Decentralization is extremely important in principle and verbally; however, in practice, as long as there are cheaper and more convenient options, users will definitely gravitate towards the latter. The security advantages of dedicated Bitcoin L2 do exist, but the scenarios in which they are truly applicable are far narrower than we envisioned. This is the most vivid lesson the market has taught us.
Fourth is the structural trend. The on-chain economy is accelerating towards platforms that control “user entry points”: Hyperliquid, Robinhood, mainstream CEX, and TradFi giants that are siphoning attention, capital flow, and profits. Once convenience and institutional endorsement appear, they always win. As retail investors exit, this oligopolistic effect will only strengthen. We were, and still are, believers in decentralization, but the current logic of on-chain growth is “whoever controls the channels wins,” and any team stubbornly clinging to foundational infrastructure at this time is rowing upstream. We are no exception.
The fifth lesson hits the hardest. The two points mentioned earlier directly crushed our business model. The users we attracted primarily used Bitcoin for value storage and earning yields. This is a reasonable use case, but it cannot generate enough high-frequency trading volume, which is precisely the lifeline for networks like ours to earn fees. BINK was our attempt to break through: a new banking application aimed at bringing Bitcoin and stablecoin daily payments on-chain, thereby increasing network transaction volume. This was a correct strategic intuition, but unfortunately, we no longer have the opportunity to fully validate it. BINK was just launched in the app store a few weeks ago, and such products can only be launched once the underlying infrastructure is fully operational. When users gravitate towards more convenient centralized channels and funds are siphoned away by giants, the maintenance costs for users remaining on the decentralized infrastructure layer have far exceeded the income they can generate. The fixed costs of infrastructure are there, while our meager fee income is simply a drop in the bucket.
We could have continued to hold on. But when additional time and investment can no longer bring new insights, continuing to stubbornly push forward is no longer called faith; it is merely an illusion to outsiders, while the core has gradually deteriorated. We would rather stop gracefully at this time, preserving our reputation and remaining resources to properly settle those who have bet on us, than force this experiment into a meaningless dead end.
Finally, a reminder again: please withdraw all assets by July 9, 2026. Once the deadline passes, the federation will uniformly collect the remaining Bitcoin. From that point on, any other assets or tokens on the network will be permanently unrecoverable.
To our investors— you invested in a vision that struggles in reality; to our partners— you fought alongside us, even betting your own roadmaps on us; to all developers deployed on Spiderchain; to our users and the BINK community— you were willing to pay for new things and accompany us all the way; and finally, the deepest gratitude goes to every member of the Botanix team— it is you who built a truly innovative system with rigor and dedication, making every difficult day worthwhile.
Thank you all, words cannot express my gratitude.