Rootstock Achieves All-Time High in Merged Mining Amidst Declining DeFi TVL in Q1 2025

Rootstock is making waves in the crypto ecosystem, showcasing remarkable increases in merged mining participation as user activity cools across Bitcoin’s DeFi landscape. Despite a dip in total value locked (TVL), Rootstock’s advancements in network security and mining efficiency are setting a strong foundation for future growth. “As BTCFi continues to grow, Rootstock is well-positioned for broader adoption through core upgrades,” noted analyst Andrew Yang from Messari. Rootstock’s Q1 2025 marks a milestone in merged mining, amidst a decrease in DeFi activity, showcasing a unique blend of challenges and innovations. Record Breaking Merged Mining Participation in Rootstock In the first quarter of 2025, Rootstock registered an impressive merged mining participation rate of 81%, up from 56.4% the previous quarter. This robust performance can be attributed to the collaborative efforts of major mining pools such as Foundry and SpiderPool. According to Messari’s inaugural “State of Rootstock” report, this surge reflects growing confidence among miners, enhancing network security and hash power. Hash Power and Network Maturity The spike in participation elevated Rootstock’s hash power to over 740 exahashes per second, exceeding Bitcoin’s total network hashrate recorded in October 2024. This indicates a significant stride in network maturity regarding merged mining growth. Moreover, alongside improved mining engagement, transaction fees saw a reduction of about 60%, fostering a more user-friendly environment and enhancing Rootstock’s competitive edge within the Bitcoin layer-2 ecosystem. Decline in Total Value Locked (TVL) Amidst Achievements Despite the positive mining metrics, Rootstock’s DeFi ecosystem witnessed a notable decline in total value locked (TVL) , dropping 20% to $179.9 million in Q1 2025. The decrease is mirrored in Bitcoin-denominated TVL, which fell by 7.2%. The TVL initially surged to $244.6 million during a Bitcoin price rally in January, but subsequent months reflected a cooling market. Comparative Declines in the DeFi Landscape For context, the Ethereum-based DeFi ecosystem experienced a sharper decline, with its TVL shrinking by 27% due to macroeconomic uncertainties and events such as the $1.4 billion Bybit exploit. Rootstock’s stablecoin market is also experiencing shifts, with USDt (USDT) remaining the frontrunner but witnessing a drop in market share from 41.3% in Q4 2024 to 27.5% by the end of Q1. User Engagement and Activity Trends Engagement metrics further reveal a complex narrative: active addresses dwindled by 26.5% while new addresses fell sharply by 54.7%. Interestingly, daily transactions exhibited slight growth, increasing by 4.3% to an average of 11,524 transactions each day. This dichotomy illustrates a critical point: while the broader interest appears to be waning, the transactions that do occur reinforce the fundamental utility of Rootstock’s platform. Innovations and Future Directions for Rootstock On the innovation front, Rootstock activated the Lovell 7.0.0 upgrade, significantly improving EVM compatibility and smart contract productivity. The platform is also expanding its ecosystem through partnerships with LayerZero and Meson Finance, demonstrating an ongoing commitment to enhancing developer engagement. Initiatives like a new hackathon and improvements to the governance platform, RootstockCollective, are poised to stimulate fresh innovation within the community. Strategic Importance of User-Friendly DeFi Solutions Alexei Zamyatin, co-founder of the Bitcoin layer 2 Build on Bitcoin, emphasized the market opportunity awaiting the first user-friendly suite of DeFi products on Bitcoin. His remarks highlight a key aspect of the market landscape; as competition intensifies, Rootstock’s ongoing upgrades and ecosystem expansions will be critical for capturing a larger share of a prospective 300 million Bitcoin users. Conclusion In summary, while Rootstock’s merged mining statistics signal a prosperous future for mining within the Bitcoin ecosystem, the decline in DeFi TVL presents significant challenges. Rootstock is at a pivotal point where strategic innovations, coupled with user-focused development initiatives, will determine its trajectory in the highly competitive crypto landscape. Addressing user engagement and enhancing platform utility will be essential as Rootstock strives for broader adoption and acceptance within the market.