Botanix to Wind Down Spiderchain Citing Weak BTC Demand

Botanix Labs will begin winding down Spiderchain on July 1. The company set a two-week grace period through July 15 and plans a final sweep of remaining Bitcoin and dissolution on Aug. 1 if assets are not withdrawn. A notice on the project’s homepage instructs users to withdraw funds before July 1.

Spiderchain was built as a Bitcoin-native Layer 2 to deliver EVM-style applications, including lending, borrowing and yield, directly to BTC holders. Botanix intentionally did not launch a native token, airdrops or reward programs.

Botanix reports Spiderchain ran for more than a year with 100% uptime and no security incidents. The network processed more than 26.1 million transactions, reached about 176,000 unique addresses, hosted 8,387 contracts and moved tens of millions of dollars in assets.

The project secured integrations with Chainlink, Morpho, GMX, Dolomite, Fireblocks, Alchemy, Galaxy and OKX Wallet, among other infrastructure and custody providers.

In a post-mortem, Botanix wrote that organic user demand did not reach levels needed to keep the project operating. The team wrote it ‘mistimed the Bitcoin community’s center of gravity’ and noted many Bitcoin holders view BTC as a reserve asset and are cautious about protocol-level changes. The post adds that for basic lending, yield and leverage, many users can access Bitcoin-denominated DeFi by using wrapped Bitcoin on established Layer 2s, and states ‘WBTC on a mature Layer 2 such as Arbitrum is sufficient for most users who want Bitcoin-denominated DeFi.’

Botanix also identified competition from brokerages, centralized exchanges, trading platforms and traditional finance entrants that offer custody, liquidity, user interfaces and regulatory disclosures inside accounts users already use.

The company noted wider market activity in which asset managers and custodians package Bitcoin exposure through wrapped tokens, custodial products and exchange-traded funds that include reserve reporting, redemption controls and compliance features. Firms are offering Bitcoin exposure combined with income-generation strategies and using Bitcoin as collateral or treasury backing in securitizations and institutional projects.

Botanix wrote that future Bitcoin-native projects will need steady application revenue and repeat users without relying on token incentives to sustain operations.