Perspective from: Alisia Painter, chief operating officer of Botanix Labs
Ethereum has been a cornerstone in the evolution of the industry, playing a crucial role in materializing decentralized finance (DeFi), emphasizing programmability as a vital blockchain feature, and illustrating the scalability of smart contracts. The Ethereum Virtual Machine has emerged as the preferred platform for developers, boasting the largest ecosystem and an extensive range of tools.
Yet, as DeFi continues to evolve, a pertinent question arises: Is Ethereum the optimal foundation for the future of financial innovation? The answer may lead us toward Bitcoin.
With close to $6 billion in total value locked as of March 2025, Bitcoin’s decentralization, liquidity, and robustness make it a quintessential candidate for the next wave of onchain finance. While Ethereum’s adaptability has fostered significant innovation, it has not come without compromises.
From vulnerabilities exposed during notable hacks to ongoing scalability discussions, Ethereum’s experimental nature has revealed weaknesses in its framework. In contrast, Bitcoin provides a stable, proven infrastructure for sustainable DeFi growth, bridging the gap from speculative users to mainstream adoption.
Ethereum’s Achievements and Limitations
Ethereum played a pivotal role in the establishment of what we recognize as DeFi today. This innovation served as a proving ground for Bitcoin’s potential and future capabilities. Its programmability has allowed developers to build diverse applications, from automated lending systems to complex derivatives, made possible by Ethereum’s smart contract functionalities.
However, this flexibility carried significant drawbacks, as evidenced by real-world incidents. The DAO hack in 2016 lost $50 million and nearly jeopardized Ethereum during its early days. More recently, the Wormhole exploit cost $325 million, while the Ronin Bridge hack resulted in $620 million in losses.
These setbacks weren’t mere coincidence — they are the direct consequences of Ethereum’s open-ended programmability. Although smart contracts are powerful, they also introduce complexity. This complexity can create vulnerabilities, and Solidity was not primarily designed with security in mind.
Recent:
Ethereum researcher proposes solution to address centralization issues and eliminate MEV
Simultaneously, Ethereum’s scaling issues have rendered it progressively less accessible.
Network congestion and gas fees soaring into the hundreds during peak periods have effectively excluded average users. Experienced users are all too familiar with the exorbitant gas costs necessary to execute even simple swaps during times of high demand. While Layer-2 solutions like Optimism and Arbitrum have advanced significantly, they also fragment liquidity and introduce additional trust dependencies.
This isn’t to suggest that Ethereum is failing. On the contrary, as DeFi transitions beyond its experimental origins and moves towards being a mainstream component of global finance, we should consider whether it’s wise to continue relying on this foundation or to explore a more robust alternative.
Why Consider Bitcoin?
Bitcoin’s design philosophy stands in stark contrast. Rather than serving as a platform for limitless experimentation, it embodies stability. Its cautious development ethos and proof-of-work consensus render Bitcoin the most secure blockchain available. This heightened security fosters trust — an essential element for DeFi applications managing billions in assets.
Another significant advantage of Bitcoin lies in its liquidity. With a market cap exceedingly larger than Ether’s (ETH), Bitcoin (BTC) ranks as the most liquid cryptocurrency, positioning it as an ideal foundational layer for DeFi. Innovations such as Bitcoin’s Lightning Network and sidechains like Spiderchain are unlocking Bitcoin’s potential for smart contracts, delivering the programmability that developers seek without compromising security or scalability.
Not All Bitcoin Projects Are Equal
Many purported Bitcoin Layer-2s and sidechains claim to be “Bitcoin native,” offering applications the prospect of leveraging Bitcoin’s inherent security features.
Let’s clarify: Many of these are not genuinely Bitcoin-native.
Without naming specifics, these initiatives frequently depend on custodial multisig setups, bridge Bitcoin to Ethereum or other chains, and subsequently construct rollups on top. While there’s nothing inherently wrong with this method, and certain applications will work under this framework of trust assumptions, it does not equate to being built natively on Bitcoin.
Authentic Bitcoin Layer-2s are constructed directly on Bitcoin, leveraging its liquidity, security, and resilience — attributes that have proven reliable over time. To enhance DeFi capabilities, we must build them on Bitcoin. It’s straightforward, and it’s worth emphasizing as we observe key players pursuing paths that may not fully align with Bitcoin’s inherent potential.
The Path Ahead
Framing this debate as Ethereum versus Bitcoin is misleading. This is not an either-or situation. Ethereum’s innovation-driven approach has been vital in demonstrating what is achievable, and it remains a central hub for DeFi experimentation. Conversely, Bitcoin offers something unique: a foundation that has gained the trust of the global financial community.
Users should not have to choose between security and functionality. Bitcoin’s resilience merges with advanced financial tools akin to those introduced by Ethereum. Some of the most exciting advancements are currently emerging at this crossroads.
For DeFi to realize its goal of creating an equitable, open, and inclusive financial system, it must advance beyond its experimental phase. It needs to be secure enough for everyday users to engage without risk of severe losses from exploits. It requires deep liquidity to facilitate real-world financial activities. And it demands the kind of institutional trust that Bitcoin has already secured.
The future of finance is likely to be built on Bitcoin, not due to failures of Ethereum, but because Bitcoin offers the foundational qualities that the financial sector needs.
Perspective from: Alisia Painter, chief operating officer of Botanix Labs
This article serves informational purposes only and should not be construed as legal or investment advice. The opinions expressed here are solely those of the author and do not necessarily reflect the views or opinions of Cointelegraph.
