Rootstock Labs Director of Institutional & Ecosystem Richard Green stated at last week's BTC Prague conference that Bitcoin-based decentralized finance projects are narrowing their focus to niche user groups as liquidity drains from the DeFi sector. Green explained that crypto-native traders and hedge funds that previously drove Bitcoin DeFi adoption have stepped back as capital flows out of DeFi markets. According to Green and data from The Block, total value locked across DeFi protocols has fallen from roughly $180 billion last October to around $70 billion today, forcing projects like Rootstock to rethink growth strategies.
DeFi Total Value Locked Falls from $180 Billion to $70 Billion
Green told The Block that the DeFi space has experienced "a massive loss of liquidity and a big pullback." The figures align with data from The Block showing total value locked across DeFi protocols declined from roughly $180 billion last October to around $70 billion today. "The liquidity's gone," Green said.
Rootstock Shifts Strategy to Target Bitcoin Treasury Firms and Miners
The liquidity drain has forced Rootstock to rethink its growth approach. Green said the company is moving away from targeting a wide spectrum of crypto users and instead focusing on specific groups including bitcoin treasury firms, miners, and long-term bitcoin holders interested in BTC lending and yield-generating products. "Where we're now positioning ourselves is not shallow and wide, it's very narrow and deep," Green said.
Botanix Announces Network Shutdown Citing Low Demand
The strategy shift comes less than a week after Bitcoin Layer 2 project Botanix announced it would be shutting down its network, citing dwindling demand for Bitcoin-native DeFi and insufficient fees to keep operations going.
Green Identifies Demand in Mining Companies and Institutional Investors
Green said he does not view the Botanix closure as evidence that Bitcoin DeFi has completely disappeared. "I don't think it is necessarily a sign that there is no demand for BTCFi products," Green said. "There is demand in small pockets that is deep." Green pointed to mining companies seeking bitcoin-backed loans and institutional investors exploring tokenized fund strategies tied to bitcoin as examples of these pockets. Green added that as ETFs continue to grow as the primary gateway for new bitcoin investors, Bitcoin DeFi projects will need to work harder to educate users and provide reasons to move from passive exposure to deploying BTC onchain.
FAQ
What did Richard Green say about Bitcoin DeFi liquidity at BTC Prague conference?
Richard Green, Rootstock Labs Director of Institutional & Ecosystem, stated at last week's BTC Prague conference that the DeFi space has seen "a massive loss of liquidity and a big pullback." He cited data showing total value locked across DeFi protocols fell from roughly $180 billion last October to around $70 billion today.
How is Rootstock changing its Bitcoin DeFi strategy?
Green said Rootstock is shifting from a "shallow and wide" approach to a "very narrow and deep" strategy. The company is focusing on specific user groups including bitcoin treasury firms, miners, and long-term bitcoin holders interested in BTC lending and yield-generating products, rather than targeting a broad spectrum of crypto users.
What evidence does Green cite for ongoing Bitcoin DeFi demand?
Green identified mining companies seeking bitcoin-backed loans and institutional investors exploring tokenized fund strategies tied to bitcoin as examples of "small pockets" where demand remains deep, despite the Botanix network shutdown and overall market contraction.
