Botanix Labs has unveiled the Aragog testnet for its EVM-compatible Layer 2 (L2) solution, Spiderchain, designed to enhance Bitcoin’s ecosystem.

A decentralized Bitcoin L2, fully EVM equivalent, purpose-built for Bitcoin-native DeFi.

Botanix’s final testnet is now live:
— Botanix Labs 🕷 (@BotanixLabs) December 4, 2024

According to Botanix, Aragog marks the final phase before the mainnet launch, scheduled for 2025.

The previous unnamed testnet, active since November 2023, achieved notable milestones, including 400,000 unique addresses, nearly 2 million transactions, and the deployment of 20,000 token contracts.

Key Features and Innovations

Aragog introduces innovations like the FROST (Flexible Round-Optimized Schnorr Threshold) cryptographic signature, a type of multisignature technology. This mechanism combines key shares from multiple holders into a single address.

“The design optimizes communication between participants to reduce latency, save bandwidth, and minimize errors,” the Botanix team explained.

In September 2023, Jameson Lopp, co-founder and CTO of Casa, reviewed Spiderchain’s concept. While praising its potential to bring decentralized finance (DeFi) capabilities to Bitcoin, Lopp noted risks such as the centralization tendencies associated with Proof-of-Stake-based blockchains.

Distributed Node Infrastructure

The Aragog testnet operates on globally distributed full nodes, an upgrade from the single-node setup used in the initial testnet. The new network also supports various DeFi applications, including:

Palladium: A Bitcoin-backed stablecoin.
Bitzy: A decentralized exchange (DEX) and automated market maker.
Spindle: A lending market.
Rover: A liquid staking protocol.
BitPerp: A perpetual options exchange.

Outlook for L2 on Bitcoin

Aragog’s testnet highlights Spiderchain’s commitment to expanding Bitcoin’s utility within DeFi. Botanix Labs envisions Spiderchain enabling scalable, decentralized applications while maintaining Bitcoin’s inherent security.

Analysts’ Projections

Galaxy Digital analysts forecast a liquidity influx exceeding $47 billion into Bitcoin-based Layer 2 solutions by 2030.

This development represents a major step toward transforming Bitcoin into a broader ecosystem capable of hosting decentralized applications and financial instruments.