The distinction matters. Wrapped Bitcoin products such as WBTC, Coinbase’s cbBTC, and Circle’s recently announced synthetic Bitcoin product are already allowing BTC to circulate in DeFi. But Tse said many bitcoin holders don’t like to give up custody in exchange for synthetic tokens.
“Most users, many users, don’t like it,” he said. “They don’t want to give up their 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 blunt critique of the industry’s previous ambitions.
“Trying to do the same things as Solana on your launch day makes no sense,” he said.
Bitcoin layer 2s should stop presenting themselves 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 2s should focus on products “only enabled by Bitcoin security and settlement.”
There are still things waiting to be resolved in the layer 2 Bitcoin markets,” he said. “But it’s definitely a little difficult to focus on a general purpose ecosystem, like trying to compete with Ethereum applications from day one,”
Diego Gutierrez Zaldivar, 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.
