Bitcoin layer-2s confront harsh reality as Botanix shuts down Spiderchain after just one year
Botanix Labs is pulling the plug on Spiderchain, its Bitcoin layer-2 network, after roughly one year of mainnet operation. The phased shutdown, announced around June 10, 2026, gives users until July 9 to withdraw their assets before the Federation validator group takes over management of any remaining funds.
The project raised $11.5 million from investors including Polychain Capital and Placeholder. It processed approximately 25 million transactions across around 200,000 wallets. And it still couldn’t make the economics work.
The demand problem nobody wants to talk about
Botanix cited low demand for Bitcoin-native DeFi and programmable BTC use cases as the core reason for the shutdown. The network simply couldn’t generate enough fee revenue to cover its infrastructure costs.
Bitcoin has been trading between $61,000 and $65,000 during 2026 sell-offs, a significant decline from the euphoric peaks of 2025. Non-BTC tokens have been particularly battered since late 2024, draining the speculative energy that many of these layer-2 networks depend on for user activity and liquidity.
Who survives and who doesn’t
Not every Bitcoin L2 is facing an existential crisis. The Lightning Network continues to operate as the default payment-focused scaling solution. Stacks, which has built a more established developer ecosystem, remains active. Rootstock, Liquid Network, Merlin Chain, Citrea, and Bitlayer are all competing for their respective niches.
Analysts have noted a broader shift in builder focus, with some questioning whether substantial demand exists for advanced programmability on Bitcoin when Ethereum already offers mature yield and borrowing mechanisms.
What this means for investors
Transaction volumes, active wallet counts, and fee revenue are the vital signs that determine whether a network is approaching sustainability or slowly bleeding out.
The July 9 deadline for Spiderchain asset withdrawals is worth watching as a case study in how orderly shutdowns happen in crypto. Any assets not withdrawn by that date will be managed by the Federation validator group, a setup that introduces counterparty risk that users presumably signed up for a decentralized network to avoid.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
The AI boom may follow the path of the 19th-century railway bubble, and builders may not be the ultimate winners
Goldman Sachs analyst Bobby Molavi compared the current situation to the 19th-century British railway mania: 500 companies spent more than the nation's annual income building 8,000 miles of railway, with most early investors losing out, while the real beneficiaries were the later "passengers." He pointed out that the current AI craze is driven by both debt and momentum, and that the S&P 500’s forward P/E ratio of 18x is only "a bit cheaper." Whether the builders can retain value is uncertain, and history does not offer an optimistic answer.
If Anthropic's IPO goes smoothly and the stock price rises next week, then everything remains the same for AI. Otherwise, some companies will go bankrupt.
The shrinking valuations of two major giants have triggered a chain reaction—investors are adopting more conservative revenue multiples for AI startups and are directly halting high-valuation financing for companies with zero revenue. Multiple venture capital firms have advised their portfolio companies to lower valuation expectations and to quickly build up cash reserves. Market participants warn that the outcome of Anthropic’s IPO will be a barometer for the industry: if successful, the boom will continue; if it fails, some companies may face elimination.
After the Brazilian election, political discount deepens; Morgan Stanley remains bullish on Petrobras (PBR.US), focusing on fuel pricing and dividends
Morgan Stanley still maintains its most optimistic "Overweight" rating, but has lowered its year-end 2027 target price from $31 to $25.
Corning (GLW.US) receives initial "Buy" rating from Jefferies! AI factories driving a fiber optic rush, with a potential global supply gap of up to 30%
For Corning, the recent profit growth mainly comes from the expansion of AI clusters. As the number of optical links crossing cabinets and campuses increases, customers need to deploy more optical fibers within limited conduit and cabinet space, thus driving demand for high-density optical cables and connection systems.
Crypto prices
More
