Dolomite expands onto Bitcoin via Ethereum-connected 'Spiderchain' developed by Botanix Labs

Dolomite, a decentralized lending protocol with close to $800 million in total value locked, is launching on Bitcoin. The move is being powered through an integration with Botanix Labs' Spiderchain. 

In a release on Thursday, Dolomite said the launch on Spiderchain will be "its flagship" chain. The system, founded in 2018, is already live on several Ethereum-compatible networks, including the Polygon zkEVM and Arbitrum Layer 2s, Berachain and the Polygon-based chain developed by OKX called X Layer. 

The Dolomite protocol is a DeFi platform that functions as both a money market and a decentralized exchange. It offers multiple trading features including lending and borrowing as well as margin and spot trading. Notably, Dolomite enables users to collateralize complex assets like GMX's yield-generating tokens.

"Our decision to expand to Bitcoin is about pushing the boundaries of where DeFi can go," Dolomite founder Corey Caplan said in a release. "Spiderchain represents a meaningful step forward in that mission. We’re excited to be among the first protocols building where long-term security and open access aren’t trade-offs but rather the foundation."

Spiderchain is a Bitcoin Layer 2 solution designed to enhance Bitcoin's scalability and functionality by integrating Ethereum Virtual Machine (EVM) compatibility. Its development team Botanix Labs launched its Aragon testnet in December as a final step toward mainnet activation. 

The network gets its name through its unique "decentralized network of successive multisigs," which apparently resemble a spider web. These networks are managed by entities known as Botanix Orchestrators, which deposit bitcoin collateral into multisigs to participate in the network's consensus mechanism.

Unlike traditional sidechains that typically rely on a fixed federation or miners, Spiderchain generates a new multisig wallet for every Bitcoin block, with a randomized subset of orchestrators as key holders. It leverages Bitcoin blockhashes as a source of verifiable randomness to select orchestrators for block construction and multisig creation.

Botanix Labs claims this architecture enables Spiderchain to transition Bitcoin from its native Unspent Transaction Output model to a bespoke account-based model similar to Ethereum's that can support smart contracts.

In September, Trump-backed World Liberty Financial named Dolomite co-founder Caplan as head of technical strategy for the project.