Rootstock, the permissionless sidechain of Bitcoin dedicated to smart contracts, concluded the first quarter of 2025 with significant results both technically and in terms of infrastructural adoption.
The quarterly report curated by Messari Research and commissioned by RootstockLabs captures an ecosystem in full transformation, driven by a historic increase in merged mining, new cross-chain integrations, and significant network optimizations.
Summary
Historic record in Rootstock merged mining: 81% of Bitcoin miners involved
The most significant data of this quarter is represented by the record involvement of Bitcoin miners in merged mining, which reached an average of 81%, compared to 56.4% in Q4 2024.
This quantitative leap was driven by the entry of Foundry USA Pool, currently the largest Bitcoin mining pool in the world.
Merged mining allows miners to process blocks on multiple blockchain compatible with Proof-of-Work (PoW) without consuming additional resources. For Rootstock, it means greater network security and a closer connection with the Bitcoin ecosystem.
The current level of 81% represents the all-time high for the platform since its launch in 2018.
In parallel, the network has seen a 60% reduction in average transaction fees, one of the central initiatives introduced by the core team in collaboration with the merged mining partners.
The objective is twofold: on one hand, to reduce the entry barriers for developers and users; on the other, to increase competitiveness compared to other EVM-compatible platforms with very low fees, such as Polygon or BSC.
This choice has had a direct impact on the network’s revenue, which has decreased from 4.30 rBTC to 3.27 rBTC quarter over quarter (-24%). However, it is a strategic trade-off aimed at stimulating greater on-chain activity and TVL (Total Value Locked) in the medium term.
Another key step in the infrastructural roadmap was the integration with LayerZero, a cross-chain messaging protocol among the most used in the DeFi landscape.
This integration has brought the Stargate bridge to Rootstock, allowing the transfer of assets between over 100 blockchains, including Ethereum, Arbitrum, Optimism, Solana, and now also Rootstock.
Interoperability is a central challenge for every alternative Layer 1, and the possibility of using Stargate opens Rootstock to a much wider audience of developers and capital, particularly from the EVM and Cosmos world.
Upgrade Lovell 7.0.0: enhanced EVM compatibility
In the quarter, the Lovell 7.0.0 upgrade was also realized, designed to increase compatibility with the Ethereum Virtual Machine (EVM).
Rootstock uses its own variant called Rootstock Virtual Machine (RVM), highly compatible with Solidity but with its own security and synchronization features.
The upgrade has introduced:
- Improvements in the gas estimator
- More efficient memory management
- Optimization of node synchronization (sync time reduced by 30%)
- Faster Transactions Protocol, for near real-time purposes
The overall TVL of DeFi on Rootstock has remained stable, despite the lower fees. The data shows a slight contraction in the dominance of USDT, which still remains the main stablecoin at 27.58%, while DOC and DLLR gain significant shares.
In detail:
- USDT:27.58%
- DOC (Money On Chain): in constant growth
- DLLR (Dollar on Rootstock): growing adoption thanks to DAO incentives
In total, the TVL DeFi remains below 100 million dollars, but with a positive trend in active users and connected protocols.
Among the active DeFi protocols on Rootstock are noted:
- Sovryn: platform for margin trading, lending, and stablecoin
- Money On Chain: issuer of DOC, a collateral-backed stablecoin on Bitcoin
- Tropykus: DeFi protocol oriented towards emerging markets, especially in Latin America
In the wallet domain, Rootstock is experiencing the growing adoption of:
- RIF Wallet
- MetaMask (via plugin)
- Liquality
- Xaman Wallet (ex Xverse)
The new integration with Flyover, the fast bridge trust-minimized developed by Rootstock, allows third-party wallets to offer deposits from BTC to rBTC in a few minutes, without waiting for the classic 100 confirmations.
The Powpeg cryptographic bridge, which manages the 1:1 link between BTC and rBTC, has seen a significant upgrade to its security model. It now supports more advanced threshold signatures, resistance against byzantine attacks, and an improved average conversion time.
Powpeg represents a unique entity in the landscape of Bitcoin Layer 2: it is a semi-decentralized system with a set of multiple custodians (federation) that requires multi-signature consensus to release BTC or mint rBTC.
The Q1 update has reduced the latency of cross-chain operations and increased the resilience of the infrastructure.
Decentralized governance on the rise: DAO, grant, and roadmap
The RootstockCollective DAO continued to expand in Q1 2025, funding initiatives through the RIF token and incentivizing projects of public interest for the ecosystem.
Among the main funded initiatives:
- Extension of the Bug Bounty program
- Development of SDK for DeFi developers
- Web3 education programs in Latin America
In parallel, new Rootstock Ambassador Programs have been announced in Brazil, Argentina, and Nigeria, where Rootstock intends to consolidate its position as an alternative Layer 1 for financial inclusion.
An interesting technical experiment mentioned in the report concerns BitVMX, an experimental variant of BitVM (Bitcoin Virtual Machine), developed with the aim of enabling smart contracts directly on Bitcoin through systems similar to zkVM.
RootstockLabs, although not yet implementing it on the mainnet, has initiated a research project with the goal of bringing zk verifications on-chain on Bitcoin, with interoperability between BitVMX and RVM. This is a pioneering development that could open up a new category of Bitcoin-native decentralized applications.
The first quarter of 2025 closes for Rootstock with clear numbers: sustained technical growth, reduction of transaction costs, greater interoperability, and unprecedented involvement from Bitcoin miners.
However, significant challenges remain:
- TVL still modest compared to the main Layer 1/2
- Dependence on DeFi growth and stablecoin adoption
- Need for more consumer-friendly use cases
With the arrival of Rootstock Bamboo, the new Layer 2 network developed by IOV Labs on zkSync, and the progressive opening to cross-chain interoperability, 2025 could represent the turning point for Rootstock as a Bitcoin-based smart contract platform.
