Botanix Labs proposes deploying Aave V3 on its Spiderchain Bitcoin Layer 2

Quick Take

Botanix Labs proposed integrating Aave V3 with its Bitcoin EVM L2 Spiderchain.
The company said the integration will help Aave unlock a new group of users as well as diversify the catalog of assets on the protocol.

New York-based Botanix Labs proposed deploying the Aave V3 decentralized finance protocol onto Spiderchain, its Bitcoin EVM Layer 2, with an aim to expand the DeFi ecosystem on the Bitcoin network.

The company said that the integration could help diversify the type of Bitcoin assets on Aave and introduce a new group of Bitcoin users to the DeFi protocol.

“Aave has the potential to capture significant early mover advantage on the only Bitcoin chain with a high-quality DeFi ecosystem as the flagship lending protocol,” Botanix wrote on the proposal. “Spiderchain offers high throughput and low latency, with 5 second block times, which can support Aave’s transaction demands and maintain user experience.”

Botanix sets out plans to incorporate Aave’s native GHO stablecoin throughout the Spiderchain ecosystem for strategic alignment with the DeFi protocol, which is expected to provide incremental revenue upside for the Aave DAO.

“Botanix will also present to the market its synthetic 1:1 representation of Bitcoin on the L2, which will be the most decentralized form of “wrapped” Bitcoin in the EVM ecosystem,” the proposal said.

Last month, Botanix partnered with web3 oracle provider Chainlink to integrate its cross-chain interoperability protocol and data oracles to Spiderchain. Botanix said the partnership with Chainlink enhances the functionality and security of Aave on Spiderchain.

The company anticipated that technical challenges and security issues would be the primary potential risks from the integration. To address these, it said that it would work closely with Aave developers and service providers, conduct comprehensive security audits, and ensure a thorough review of the proposal by Aave’s risk managers.

Botanix said it plans to gather community feedback from Aave and will post a more detailed proposal if the feedback is positive.

Botanix introduced Spiderchain in 2022 and launched its testnet in late 2023. In May 2024, the company raised $8.5 million from Polychain Capital, Placeholder Capital, Valor Equity Partners and ABCDE.

“The Spiderchain plans to be the home of Bitcoin-native DeFi,” Botanix said.

Disclaimer: The Block is an independent media outlet that delivers news, research, and data. As of November 2023, Foresight Ventures is a majority investor of The Block. Foresight Ventures invests in other companies in the crypto space. Crypto exchange Bitget is an anchor LP for Foresight Ventures. The Block continues to operate independently to deliver objective, impactful, and timely information about the crypto industry. Here are our current financial disclosures.