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Staking Circle
Staking Circle
May 27, 2024
8 min read

Exploring Bitcoin L2s w/ Botanix

Exploring Bitcoin L2s w/ Botanix

Botanix Labs is preparing to debut its decentralized Bitcoin Layer 2 solution, the SpiderChain, which combines Bitcoin security with Ethereum functionality. In a recent AMA, Willem underlined the importance of achieving high decentralization and low transaction costs with their novel bridge and token rewards system.

Botanix Labs has already attracted various projects, including a dynamic DeFi ecosystem featuring Bitcoin-backed stablecoins, decentralized exchanges, and more. As the mainnet launch date approaches, Willem asked Ethereum developers to build on Bitcoin through Botanix. To learn more about Botanix and remain up to date on their progress, check out the highlights of the AMA below and join their Discord and Telegram communities.

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Speakers:

Index:

  1. Botanix labs Intro
  2. Botanics’ Unique BItcoin Layer 2 Solution
  3. Challenges in Decentralized Layer 2 Development
  4. Ecosystem and Projects on Botanics
  5. User Experience and Bridging to Botanics
  6. Technical Aspects and Censorship Resistance
  7. Fees and Transaction Costs
  8. Botanics Development Roadmap
  9. Mainnet Expectations
  10. Developer Outreach

1. Botanix Labs Intro

  • Willem's research in authenticated encryption aids in the design of Botanix' Bitcoin Layer 2 solution – the SpiderChain:

"Researched in cryptography, in authenticated encryption, actually part of the design of what's called the SpiderChain, which is how we actually built a Bitcoin layer 2, comes from my cryptography background

  • After observing hyperinflation and bank account confiscations, Willem aimed to connect Bitcoin with the Ethereum Virtual Machine (EVM):

"And I think around like two years ago, came up with the idea for Botanix. And that vision is still exactly, absolutely the same. I strongly believe Bitcoin is the winning money. It's pure, it's decentralized, it's extremely secure. It can be global money. And I think the EVM might be the winning virtual machine.

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2. Botanix's Unique Bitcoin Layer 2 Solution

  • Botanix has been working on a decentralized Bitcoin Layer 2 solution, which started two years ago before Ordinals and other Layer 2 solutions became known:

"Bitcoin. We started like two years ago before Ordinals was a thing before anyone else was building Layer 2s. And I think what differentiates us is we spent probably the first six months on the cryptography.

  • The SpiderChain is a unique solution, fully operational on Bitcoin today, and addresses centralization problems that other roll-ups encounter, including censorship resistance and data availability issues, aiming for full permissionless status when the complete protocol is in place:

"Bitcoin isn't suited for data availability, it's not really suited for roll-ups, and so we found a way to actually build a decentralized layer too. So the SpiderChain is quite unique in its design, it's fully capable on Bitcoin today, and it's actually decentralized, so we don't have any of the censorship resistance issues,

  • The Layer 2 solution was tried on a testnet since November and is planning to move to the mainnet soon:

"So quite a unique layer 2 design that solves a lot of the issues of your classical roll-ups. And then we started building that, being on testnet in November and soon going to mainnet.

3. Challenges in Decentralized Layer 2 Development

  • More decentralization in layer 2 solutions like Botanix's SpiderChain means less speed and throughput – a chosen compromise:

"If you want to be decentralized, your downside is indeed like you cannot be super fast. You cannot be high throughput. And so that's a trade-off you make. So we won't have the lifeless issues. We won't have the censorship resistance issues, but it comes at a cost of speed and throughput.

  • Willem stressed that besides their testnet, nobody has a complete, functioning end-to-end Bitcoin Layer 2 product with decentralization:

"Out I don't think there's any Bitcoin layer 2 yet that actually has a fully end-to-end working product except for our internet, so I think we're still the only ones that have actually shipped a product

  • Botanix designed a decentralized platform with a decentralized sequencer from the beginning, which will copy a Bitcoin-based Ethereum with a 10-second block rate:

"Really, you can compare Botanix almost like an Ethereum that's put on top of Bitcoin. Then on top of us, you can go even faster so we'll have like 9/10 second blocks

4. Ecosystem and Projects on Botanix

  • Botanix has already drawn a variety of projects to build a dynamic ecosystem on its platform:

"We've, over the last, I think, two weeks, we've announced quite a few, or like a limited amount of those projects. There's a lot in the pipeline.

  • Projects include Bitzy (EMM index), Palladium (Bitcoin-backed stablecoin), Frax (partnered), BitPerp and Vertex (Perpdexes), and a liquid staking protocol not yet named:

"So Bitzy, definitely check them out. A very, very legit team building a really cool Really cool product. Then we've got Palladium. So Palladium is a Bitcoin-backed stablecoin. (...) I think we've announced a partnership with Frax. So you'll have Frax on top of Botanix. Then we, I think earlier this week we announced with BitPerp, and last week we announced with Vertex, so Perpdexes.

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  • These projects will offer foundational DeFi services, including liquidity providing, oracles, decentralized exchange functions, and a bridge from Botanix to Ethereum, thus presenting a decentralized version of wrapped Bitcoin on Ethereum:

"There's some building blocks that are still missing, but those are not announced yet. You have, of course, oracles and bridges, for example, bridge from Botanix to Ethereum itself. So you will have a decentralized version of wrapped Bitcoin on Ethereum. (...) So there's much more possibilities than a lot of people think about. But those announcements are coming.

5. User Experience and Bridging to Botanix

  • Users can simply transfer Bitcoin to Botanix Layer 2 through a bridge operational since November on the testnet:

"Yeah, that bridge is actually already made and you could already use it and test it out on the testnet. It's been online since November, so we're connected to a bit of a testnet.

  • The bridge creates a unique Bitcoin deposit address linked to a user's MetaMask EVM address for smooth transactions from exchanges or wallets:

"You basically connect your MetaMask and then you generate a what's called Bitcoin deposit address. And this Bitcoin deposit address is uniquely linked to your EVM address. It's a unique address that's specifically for your EVM address.

  • Botanix plans to reward active users with various token launches:

"We have a lot of different founding teams that are building on top of us that will do their token launches on top of Botanix. So any active users will get a lot of different rewards.

6. Technical Aspects and Censorship Resistance

  • The SpiderChain's consensus mechanism is ground-breaking, serving as a Proof of Stake over Bitcoin's Proof of Work, bypassing the usual limits of Proof of Stake and achieving a truly decentralized system:

"And so one of the big breakthroughs that I had when Designing the SpiderChain is actually realizing that you cannot avoid a new consensus. And so actually for the first time we build a consensus on top of a consensus. So we build a proof of stake on top of a proof of work, which is quite unique.

  • Consensus is reached through a network of multisigs, selected randomly from participants, forming a decentralized network on top of Bitcoin:

"If you look from a higher level, it's this whole decentralized network between thousands of people that all have like two out of two multisigs with random other people. And so if you think that model, but then think bigger, that's a little bit of what the SpiderChain is.

7. Fees and Transaction Costs

  • The transaction fees on Botanix will be very low, less than one cent, due to the Layer 2 design not needing to send data back to Bitcoin's base layer:

"When you think about the Layer 2s on Ethereum, where a lot of the higher fees come from, it's because they need to post the data back to the base layer. and like I said earlier because we are decentralized we don't have to post the data back to the base layer

  • It promises the functionality of Ethereum without the high "gas" fees:

"So we can keep the fees extremely low and so our base fees are gonna be less than one cents so it should be very very cheap transactions

8. Botanix Development Roadmap

  • testnet v1 is set to launch soon and will undergo auditing:

"Roadmap, we have had testnet v0 online since like November. We're now almost ready with what we call testnet v1. That will go online very soon.

  • The first mainnet launch will include a federated sidechain with 15 decentralized sequencers running nodes from the start:

"When that audit is completed, then we go to mainnet. that will start off as a federated sidechain, so we'll start off with 15 different nodes that all run a full node.

unnamed.png (Source)

  • By 2025, Botanix aims to have a fully working SpiderChain:

"After that we basically start growing the group, and then we expect to have full-blown spider-chaining works by somewhere in 2025. It's a little bit of the roadmap.

9. Mainnet Expectations

  • Willem outlined there will be plenty of activities for users once the mainnet goes live, including a variety of products and protocols to engage with. It was also mentioned that there will be numerous different airdrops that users can participate in with the released mainnet:

"There will be a lot of things to do once we go to mainnet, a lot of different products to use, and a lot of different protocols that will do a lot of different airdrops. So yeah, join the community and definitely stay up to date.

10. Developer Outreach

  • Willem called upon Ethereum developers who are fond of Bitcoin, pointing out that now they can build on Bitcoin:

"If you're developing in the Ethereum ecosystem as a dev and you write Solidity smart contracts, but you actually love Bitcoin, then this is your moment. Now you can finally build on Bitcoin. So definitely reach out.

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