The distinction matters. Wrapped bitcoin products such as 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 dislike giving up custody in exchange for synthetic tokens.
“Most users, many users, do not like it,” he said. “They don’t want to give up title, they don’t want to give up custody.”
Bitcoin layer-2s
Orkun Mahir Kılıç, co-founder and CEO of Chainway Labs, developer of Citrea, offered a blunter critique of the sector’s earlier ambitions.
“Trying to do the same things as Solana the day you launch doesn’t make any sense,” he said.
Bitcoin layer-2s should stop pitching 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 “uniquely enabled by Bitcoin security and settlement.”
There are still things that wait to be solved on the Bitcoin layer-2 markets,” he said. “But definitely general-purpose ecosystem focus, like trying to compete with Ethereum applications on your day one, is a little bit hard to achieve.”
Diego Gutierrez Zaldivar, CEO and co-founder of Rootstock Labs, said Botanix’s closure reflects another lesson: building a blockchain ecosystem is much harder than solving the technical problem.