Can Bitcoin and Ethereum co-exist as one protocol? This is what Botanix protocol is pushing to achieve.
This EVM integration on BTC is deemed the next frontier in its evolution.
As well celebrated as Bitcoin (BTC) is globally, especially for its unmatched security, the protocol has some limitations that have necessitated the need for a complementary blockchain. Even as a peer-to-peer payment system or as a store of value, Bitcoin is not performing optimally in terms of composability and scalability as it still leverages the Proof-of-Work (PoW) consensus algorithm.
On the other hand, Ethereum (ETH) is one of the most functional blockchain networks around. Since The Merge which marks the transition from the PoW to the Proof-of-Stake (PoS) consensus mechanism, the scalability of the Ethereum protocol has been significantly improved.
With this advantage over the Bitcoin network, cross-chain infrastructure firm Botanix Labs is looking forward to a time when Ethereum smart contracts coexist seamlessly with Bitcoin’s security.
Markedly, both protocols are considered to be different in their own way. At the same time, their co-existence is strongly believed to possess the potential to open up new realms of possibilities for the crypto ecosystem. As a result, the Botanix Protocol places ETH as a leading Layer-2 solution on Bitcoin.
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Willem Schroé, the founder of Botanix Labs argued that mainstream adoption of BTC would not happen until it bridges to Ethereum Virtual Machine (EVM). For context, he mentioned that for BTC to gain a significant amount of value from real-world assets and improve its utility, it would need to link up with EVM outfits which are generally regarded as the first point of entry for many real-world assets moving on-chain.
This would include connecting with Ethereum-based stablecoins, Decentralized Finance (DeFi), and Non-fungible tokens (NFTs) via the EVM solution. Schroé highlighted that “Bitcoin is the most technologically secure and truly decentralized protocol [and]the EVM has proven itself to be the application layer for the global financial system.”
Bitcoin and Ethereum Mix: Botanix Labs to Leverage Spiderchain
Botanix Labs plans to achieve this integration by introducing “Spiderchain,” its PoS L2 that implements EVM to EVM bridges to enable Bitcoin to interact with the EVM.
Here, assets can easily be staked on the Bitcoin network and the staked assets are secured by a decentralized multisig mechanism. It is worth noting that its design does not mandate BTC to be forked.
The Spiderchain protocol differentiates itself from other BTC/ETH integration proposals, like drivechains or zero-knowledge rollups, by its capability to seamlessly integrate with Bitcoin without necessitating changes to the base layer protocol.
Before the introduction of Botanix Labs’ integration solution, there were other existing solutions. However, they have their drawbacks such as their susceptibility to censorship and regulatory scrutiny. Notably, the regulatory challenges stem from the fact that most were operated by BitGo, a United States-based digital asset Trust and security company.
It is no longer news that regulators in the U.S. are cracking down on the activities of crypto-based entities. The Securities and Exchange Commission (SEC) is actively leading this war against digital assets companies in the United States. Thus far this year, Binance, Coinbase, and Kraken have welcomed enforcement actions from the regulator, pushing other innovators to remain cautious of entering the US markets.
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