The distinction matters. Wrapped bitcoin products like WBTC, Coinbase’s cbBTC, and Circle’s recently announced synthetic bitcoin product already allow BTC to circulate in DeFi. But Tse said many bitcoin holders don’t like giving up custody in exchange for synthetic tokens.
“Most users, many users, don’t like it,” he said. “They don’t want to give up title, they don’t want to give up custody.”
Bitcoin layer 2
Orkun Mahir Kılıç, co-founder and CEO of Citrea developer Chainway Labs, offered a more forceful critique of the sector’s previous ambitions.
“Trying to do the same things as Solana on launch day doesn’t make any sense,” he said.
Bitcoin Layer 2 should stop presenting itself as general-purpose blockchains, he added. The market already has mature ecosystems for trading, lending, consumer applications and perpetual futures.
Instead, Kılıç said, Bitcoin Layer 2 should focus on products “exclusively enabled by Bitcoin security and settlement.”
There are still things waiting to be solved in Bitcoin’s layer 2 markets,” he said. “But definitely the general-purpose ecosystem approach, like trying to compete with Ethereum applications on day one, is a little difficult to achieve.”
Diego Gutiérrez Zaldívar, CEO and co-founder of Rootstock Labs, said Botanix’s closure reflects another lesson: Building a blockchain ecosystem is much more difficult than solving the technical problem.
