Botanix Labs has recently introduced stBTC, a pioneering Bitcoin Layer Two with EVM capabilities that offers a one-to-one backed bitcoin asset. This innovative asset redistributes transaction fees on the network to holders as yield, allowing users to stake bitcoin and earn additional bitcoin without any inflationary token emissions, points programs, or mandatory lockups.
Founded in 2023 at Harvard by Willem Schroé, Botanix operates as a Bitcoin Layer Two protocol or sidechain, similar to the Liquid Network and Rootstock. However, it distinguishes itself with the use of more modern scripting tools in Bitcoin, the sharing of network fee revenue with stakeholders, and a federation of 16 node operators as its custody foundation. With the mainnet live for two months now, Botanix has processed a remarkable 10 million transactions with 100% uptime for peg-ins and peg-outs, according to Schroé.
One of the most important aspects of any yield-bearing product is understanding where the yield comes from. With the crypto industry evolving beyond the Ponzi-like schemes of the past, new, more stable forms of yield are emerging. For instance, Cash App reported earning over 9% APR on Lightning Network fees, showcasing the potential for earning yield by facilitating more efficient routing of payments on the Bitcoin network.
Taking a conservative approach to yield, Botanix has designed its stBTC token to earn 50% of all transaction fees paid on the Botanix network. This unique model rewards stakeholders from the economic success of the ecosystem and its integrations across the industry. Currently boasting a 34% yearly APR, Schroé anticipates that the APR on stBTC will stabilize around 5-6% in the future.
The stBTC token contract follows the EIP-4626 standard, ensuring that the tokens are backed one-to-one and visible on-chain. The contract has been audited by Spearbit and Sigma Prime, providing users with transparency and security. Users can easily deposit BTC into the Botanix federation via the Botanix bridge and claim the equivalent amount of Botanix Layer Two bitcoin using an EVM-compatible wallet like Metamask. Staking their Botanix BTC at the Botanix yield page converts it into stBTC, allowing users to start earning yield. Additionally, users can purchase stBTC with BTC at bitzy.app/swap.
Staking not only adds proof-of-stake style security to the Botanix network but also unlocks other potential benefits for users in the future. It also gives users the power to vote on crucial network events, enhancing decentralization and community engagement.
One of the most intriguing features of stBTC is the ability for users to take out loans against their stBTC holdings. Users can currently obtain USDC loans against their stBTC with as low as 0.6% APR through the Stargate defi protocol. This innovative concept allows users to leverage their stBTC to pay off loans, creating a novel financial ecosystem within the Botanix network.
The user experience and design of the Botanix network resemble that of other EVM chains and defi protocols, making it familiar to crypto users. While the design of the Yield and Bridge websites may feel clunky compared to other defi portals, Botanix is rapidly advancing Bitcoin into the realm of programmable, decentralized finance. As the product design continues to evolve, Botanix aims to bridge Bitcoin with the broader creator crypto ecosystem, bringing us closer to having a comprehensive Bitcoin bank in cyberspace.
In conclusion, Botanix Labs’ stBTC launch represents a significant milestone in the evolution of Bitcoin finance. By offering a secure and innovative way for users to earn yield on their bitcoin holdings, Botanix is paving the way for a new standard in Bitcoin yield generation. With its transparent and audited token contract, user-friendly staking options, and the ability to take out loans against stBTC, Botanix is reshaping the landscape of decentralized finance and unlocking new possibilities for Bitcoin holders.