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Bitcoin DeFi has an audience problem. Not a technology problem, not a security problem, but a concentration problem. The people who want it really want it, and there just aren’t that many of them yet.
That’s the picture emerging from Rootstock, the EVM-compatible Bitcoin sidechain that has quietly become one of the most established players in Bitcoin’s nascent DeFi ecosystem. A Rootstock executive has pointed to demand that is focused in small, deep markets, a polite way of saying the sector is driven by a handful of serious institutional players rather than a broad wave of retail users.
The security is there, the users less so
Rootstock has achieved something genuinely impressive on the security front, capturing 84.01% of Bitcoin’s total hashrate through merged mining in Q1 2026. That’s up from 81% as recently as May 2025.
In English: miners who already secure Bitcoin are simultaneously securing Rootstock at almost no additional cost.
And yet, the total value locked across Rootstock’s ecosystem sits at roughly $235 to $267 million. The security infrastructure is enterprise-grade. The capital flowing through it is decidedly not.
Following the institutional money
Rootstock has pivoted toward institutions through its Rootstock Institutional initiative, which targets an estimated $260 billion in idle institutional Bitcoin holdings.
Richard Green, Rootstock’s Director of Institutional and Ecosystem, has discussed the growing institutional appetite for BTC-backed financial products. The thesis is straightforward: institutions want yield on their Bitcoin, but they don’t want to leave Bitcoin’s security model to get it. They’re not interested in bridging to Ethereum or trusting some novel consensus mechanism. They want Bitcoin-native solutions.
One tangible example of this playing out is a $20 million tokenized private credit deployment by Mercado Bitcoin on Rootstock.
Richard Green has highlighted that institutions are increasingly seeking yield and lending solutions backed by Bitcoin’s security, without the need to move assets off-chain or onto alternative networks.
The broader ecosystem picture shows over 150 partners collaborating within Rootstock’s network, with recent integrations like Aori for cross-chain activity completed in April 2026.
The Botanix cautionary tale
Botanix, another project building DeFi infrastructure on Bitcoin, announced its shutdown around June 10, 2026, citing weak demand for Bitcoin DeFi.
The contrast is instructive. Rootstock has survived by leaning into merged mining security and pivoting toward institutional clients. Botanix, apparently, couldn’t find enough users willing to show up. Same sector, very different outcomes.
What this means for investors
The positive signal is that security metrics continue to improve. An 84.01% hashrate share means Rootstock is arguably the most secure sidechain in all of crypto, piggybacking directly on Bitcoin’s own mining infrastructure.
The risk is that Bitcoin DeFi remains a niche within a niche. A TVL of $235 to $267 million suggests the market hasn’t found its breakout catalyst yet.
Botanisk’s shutdown should serve as a reminder that survival in this space isn’t guaranteed. Rootstock appears to be choosing the institutional path deliberately rather than by default, which is a more honest strategy than pretending mass adoption is imminent.
For anyone watching this space, the metric to track isn’t TVL in isolation. It’s the ratio of institutional capital to total TVL. If Rootstock can convert even a small fraction of that $260 billion opportunity into active deployments, the current TVL figures will look like a rounding error in hindsight.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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