Introduction

Disclaimer

Some of the provided information in the following chapters is related to the final product of Botanix with the Spiderchain fully implemented as outlined in the whitepaper. For more information on the current implementation, visit Founding Federation.

Botanix in short

Botanix is a Layer 2 protocol built on Bitcoin that enables users to access decentralized applications directly on the Bitcoin network. This includes decentralized exchanges (DEXs), lending and borrowing protocols, NFT marketplaces, and other DeFi applications. While these capabilities have long been available on Ethereum and other EVM-compatible chains, Botanix Labs is bringing this functionality to Bitcoin through the Botanix protocol.

Bridging to Botanix

To use Botanix, users bridge their bitcoin from the Bitcoin base layer (L1) to Botanix (L2). When bitcoin is bridged to Botanix, it is securely stored in newly created multisig wallets that are managed by the network's Orchestrator nodes. These nodes safeguard the deposited bitcoin until users choose to bridge back to the Bitcoin mainnet.

During this time, users receive an equivalent amount of bitcoin on Botanix that can be used with applications built on the platform. When users no longer wish to interact with these applications, they can bridge their assets back to receive their bitcoin on the Bitcoin mainnet.

Security Through Economic Incentives

The security of user funds is maintained through economic incentives built into the protocol. Orchestrator nodes must stake their own bitcoin to participate in the network. This stake serves as collateral to ensure honest behavior—if an Orchestrator acts maliciously or fails to meet network requirements, their staked funds are subject to slashing penalties.

This mechanism, combined with additional security features detailed in our Advanced Concepts section, ensures the integrity of user deposits and network operations.

Example Use Case

Consider the following scenario:

1. Initial Position: Alice holds BTC and wants to earn yield through decentralized lending

2. Bridge In: Alice deposits her BTC to Botanix, receiving an equivalent amount of BTC on the Layer 2 network

3. DeFi Interaction: Alice lends her BTC through a lending protocol available on Botanix

4. Yield Generation: Over time, Alice earns interest on her deposited assets

5. Bridge Out: Alice withdraws her principal plus earned interest back to the Bitcoin mainnet

6. Result: Alice has successfully generated yield on her Bitcoin holdings through decentralized finance

This example demonstrates how Botanix enables Bitcoin holders to participate in sophisticated financial applications while maintaining the security and decentralization principles of the Bitcoin network.