Rootstock’s Q1 2025 Report: Mining Boom Despite DeFi TVL Dip
The Bitcoin DeFi landscape experienced a fascinating dichotomy in Q1 2025, as evidenced by Rootstock’s performance. While the platform witnessed a significant surge in mining participation, its DeFi ecosystem experienced a downturn in Total Value Locked (TVL).
Mining Milestone: Merged mining participation on Rootstock reached an all-time high of 81%, fueled by the integration of major mining pools. This boosted Rootstock’s hash power to over 740 exahashes per second, exceeding the total Bitcoin network hashrate recorded in October 2024. This remarkable achievement signifies a significant step towards network maturity and enhanced security.
Enhanced User Experience: Simultaneously, Rootstock implemented a 60% reduction in transaction fees, improving user experience and competitiveness within the Bitcoin layer-2 ecosystem. This positive development could attract new users and encourage greater adoption.
TVL Contraction: Despite these positive developments, Rootstock’s DeFi TVL experienced a decline. Bitcoin-denominated TVL dropped by 7.2%, while US dollar-denominated TVL fell by 20% quarter-over-quarter, reaching $179.9 million. This decrease reflects the broader market cooling and aligns with the trend seen on other DeFi platforms, such as Ethereum.
Rootstock overview for Q1 2025. Source: Messari
Stablecoin Market Shift: The stablecoin market on Rootstock also underwent significant changes. While USDT remained the leading stablecoin, its dominance decreased considerably. By the end of Q1, no single stablecoin held more than 30% market share. Active addresses and new addresses experienced noticeable drops, although daily transactions saw a slight increase.
Active addresses drop on Rootstock. Source: Messari
Lovell 7.0.0 Upgrade and Ecosystem Expansion: Rootstock continued to develop its platform, activating the Lovell 7.0.0 upgrade, which improved EVM compatibility and smart contract performance. Integrations with LayerZero and Meson Finance, alongside new developer initiatives, further strengthened its ecosystem.
Conclusion: The contrasting trends in Rootstock’s Q1 2025 performance highlight the complexities of the Bitcoin DeFi space. While significant progress has been made on the mining and development fronts, the TVL dip underscores the challenges and market volatility impacting the broader DeFi sector. The future will depend on Rootstock’s ability to continue to attract developers and users amid the evolving market.