State Of Rootstock Q2 2025

What Happened

Rootstock Institutional was introduced by RootstockLabs to support bitcoin treasury companies, trading funds, and financial institutions in accessing opportunities within Rootstock’s Bitcoin DeFi ecosystem.

Rootstock is a permissionless Bitcoin sidechain that launched its mainnet in January 2018. The project extends Bitcoin by enabling smart contract functionality while preserving Bitcoin’s security and monetary properties. Rather than introducing a native token, Rootstock uses BTC as its base asset in the form of “programmable Bitcoin” (rBTC), a token that maintains a two-way peg to Bitcoin.

Market Context

Rootstock’s DeFi TVL rose 9.8% QoQ to $235.9 million in Q2, with Uniswap’s share expanding from $7 million to $35 million as liquidity deepened across major protocols.

USDT0, Tether’s omnichain stablecoin, went live on Rootstock in Q2, expanding access to composable dollar liquidity across the BTCFi ecosystem and supporting cross-chain DeFi integrations.

Rootstock’s daily transaction activity remained steady in Q2 2025, posting a modest 1.1% increase in total transactions, from 1.04 million to 1.05 million QoQ. Daily transaction volumes hovered between 7,000 and 13,000 for much of the period, peaking near 23,000 but failing to sustain any upward breakout.

This spike aligns closely with Rootstock’s Staking Surge campaign, a community initiative aimed at encouraging broader exploration of staking and liquidity functionalities within the Rootstock ecosystem. The campaign, which ran from May 15 to June 14, 2025, likely played a central role in driving both the influx of new accounts and the increase in active user participation, as users were attracted by the yield incentives and the network’s expanded DeFi capabilities.

Why It Matters

Rootstock staged a strong rebound in user activity during Q2 2025. Average daily active addresses surged 65.3% QoQ to 420, up from 254 in Q1 2025. New addresses reached an all-time high of 8,307, nearly a fourfold increase from the previous quarter’s 2,101. This growth was most evident in mid-May when new account creation peaked with over 1,500 new addresses in a single day. Active addresses reached a high in mid-June, with more than 2,200 active users, far surpassing the baseline of previous months.

Details

Key Insights

Rootstock saw a significant increase in daily active addresses and new user onboarding in Q2, with active addresses up 65.3% QoQ and a record 8,307 new addresses. This growth was driven by new protocol integrations including Solv, LayerBank, and Midas, as well as ecosystem campaigns focused on staking and user engagement.

Merged mining participation reached an all-time high in Q2, averaging 87.1%, up from 81.1% in 2025 Q1, after the integration of Foundry, the world’s largest Bitcoin mining pool.

Primer

rBTC is used for gas fees on Rootstock. The token allows owners to interact with decentralized applications (dApps) on the Rootstock network for minting, swaps, and more. rBTC uses the Powpeg bridging system that connects Bitcoin and Rootstock.

Rootstock secures its network using merged mining and Deterministic Conflict Resolution (DECOR+) consensus, a Proof-of-Work (PoW) protocol that maintains the Bitcoin block format.

Rootstock has several additional components, such as the Rootstock Virtual Machine (RVM), a forked version of the Ethereum Virtual Machine (EVM) that allows for high compatibility with EVM. Rootstock also features the Rootstock Infrastructure Framework (RIF), a utility token designed to scale Bitcoin utility by powering governance and grants through the RootstockCollective DAO. It also powers comprehensive blockchain-based infrastructure services such as the RIF Token, RIF Wallet, rBTC Flyover, RNS (RIF Name Service), and RIF Relay.

For a complete primer on Rootstock, refer to the Initiation of Coverage report.

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Key Metrics

Performance Analysis

Financial Overview

Rootstock’s average transaction fees fell to just $0.19 (0.000002 rBTC) in Q2 2025, the lowest in the past five quarters. This reduction followed network optimizations implemented earlier in the year by Rootstock’s merge-mining partners and core contributors, which lowered user costs by over 60%. While these changes improved accessibility, they also contributed to a 35.8% QoQ decline in total revenue, which fell to $198,290. The updated fee structure enhances Rootstock’s competitiveness by making the network more affordable for users and developers, particularly for applications requiring high transaction throughput or cost-sensitive interactions. Over time, this positions the network to attract a broader set of use cases and user segments, though sustaining protocol-level revenue will require continued growth.

Network Overview

In Q2 2025, Rootstock maintained a strong security posture through consistently high levels of merged mining participation. The average merged mining percentage increased to 87.1%, up from 81.1% in Q1, reinforcing Rootstock’s alignment with Bitcoin’s hash power and enhancing resistance to potential attacks. In addition to the higher participation rate, the total number of merged mined blocks also rose to 11,444, reflecting an 8.2% QoQ increase.

Ecosystem Overview