Rootstock (RSK): What Bitcoin's Longest-Running EVM Sidechain Gets Right and Wrong

Rootstock (RSK) launched its mainnet on January 2, 2018, making it the oldest production EVM-compatible sidechain secured by Bitcoin. Eight years later, it offers a unique vantage point: what happens when you graft Ethereum's smart contract model onto Bitcoin's security? The answer involves impressive technical achievements, stubborn growth challenges, and hard-won lessons about what Bitcoin users actually want from a Layer 2.

With over 87% of Bitcoin's hashrate securing its blocks and a DeFi TVL that peaked near $260 million in mid-2025, Rootstock has proven that merge-mining works at scale. But its relatively modest adoption, despite years of operation, raises questions about whether EVM compatibility is what the Bitcoin ecosystem needs.

How Rootstock Works: Architecture Overview

Rootstock is a proof-of-work sidechain that runs the Rootstock Virtual Machine (RVM), a fully EVM-compatible execution environment. Developers write smart contracts in Solidity and deploy them using standard Ethereum tooling: Hardhat, MetaMask, Web3.js. The chain produces blocks approximately every 30 seconds and uses rBTC as its native gas token, pegged 1:1 to BTC.

Three core mechanisms define Rootstock's architecture: merge-mining for consensus security, the Powpeg for bridging BTC, and EVM compatibility for programmability.

Merge-Mining: Borrowing Bitcoin's Security

Merge-mining allows Bitcoin miners to simultaneously mine Rootstock blocks using the same computational work, with no additional energy or hardware cost. Miners include a hash of the Rootstock block header in their Bitcoin coinbase transaction. If the resulting proof-of-work meets Rootstock's difficulty target, both chains accept the block.

As of Q2 2025, merge-mining participation reached an all-time high of 87.1% of Bitcoin's hashrate, translating to over 740 exahashes per second securing Rootstock. This milestone was driven by Foundry joining as a merge-miner in February 2025, alongside established pools like Braiins, Luxor, AntPool, ViaBTC, and F2Pool. Mining pools earn 79% of Rootstock transaction fees as an incentive.

Why merge-mining matters: Unlike sidechains that rely entirely on their own validator sets, Rootstock inherits a significant portion of Bitcoin's proof-of-work security. An attacker would need to control a majority of the participating Bitcoin hashrate to reorganize Rootstock blocks: a cost measured in billions of dollars.

The Powpeg: Bridging BTC to rBTC

Moving Bitcoin onto Rootstock requires the Powpeg, a federated bridge operating as a 5-of-9 multisig secured by Hardware Security Modules (HSMs) manufactured by Ledger. Private keys never leave the HSMs, and the devices run a Rootstock node in SPV mode, only signing transactions proven valid by sufficient cumulative proof-of-work.

The nine current pegnatories include Luxor, Sovryn, Xapo Bank, BlockVenture, Constata, pNetwork, Earn, and RootstockLabs (which holds two seats). Plans call for expanding to 20 pegnatories following the Reed network upgrade, with a longer-term target of 60.

Pegging in requires 100 Bitcoin block confirmations (roughly 16 hours) with a minimum of 0.005 BTC. Pegging out requires approximately 200 Bitcoin blocks (roughly 33 hours) with a minimum of 0.004 rBTC. An emergency recovery protocol activates after one year of complete UTXO inactivity, using a separate 3-of-4 multisig.

What Rootstock Gets Right

Merge-Mining at Scale

Rootstock has conclusively proven that merge-mining can achieve meaningful Bitcoin hashrate participation. Growing from modest early adoption to 87% of Bitcoin's hashrate is a genuine achievement. No other Bitcoin sidechain has demonstrated this level of proof-of-work security sharing. The chain has maintained 100% uptime since its 2018 launch with no chain resets: a track record most newer Bitcoin L2s cannot yet match.

Early EVM Compatibility

By offering Solidity compatibility in 2018, Rootstock gave Ethereum developers a path to deploy on a Bitcoin-secured chain without learning new languages. Protocols like Money on Chain and Sovryn built functioning DeFi applications backed by Bitcoin collateral. Sovryn offers lending, borrowing, and margin trading, while Money on Chain created DOC, a Bitcoin-collateralized stablecoin.

Steady Technical Improvement

Rootstock has shipped a series of meaningful network upgrades. The Lovell upgrade in Q1 2025 reduced gas fees by 60%. The Reed upgrade in Q3 2025 introduced Segwit-compatible pegouts and reduced pegout costs by another 60%. The Vetiver upgrade in Q4 2025 laid the groundwork for the Union Bridge, a trust-minimized bridge built on BitVMX that would shift the peg from a 5-of-9 federation to a 1-of-n honest assumption model. Average transaction fees dropped to $0.19 by mid-2025.

What Rootstock Gets Wrong

The Federated Peg Problem

The Powpeg's 5-of-9 multisig is the most significant trust assumption in Rootstock's design. Five known entities must collude to steal locked BTC. While HSMs add a hardware security layer that prevents signatories from extracting keys, the model remains fundamentally a federation. Users must trust that hardware has not been compromised and that a supermajority of pegnatories remain honest.

This is a known limitation that the Rootstock team is actively addressing with the Union Bridge. But as of mid-2026, Union remains on testnet. The mainnet launch, originally targeted for Q4 2025, has slipped to a future network upgrade. Until then, every BTC locked in Rootstock relies on the federation.

Peg Latency

The 100-block peg-in (~16 hours) and ~200-block peg-out (~33 hours) create significant friction. By comparison, the Liquid Network processes peg-ins in roughly 102 confirmations but with a faster 2-minute block time. For users accustomed to instant bridging on EVM chains (even if those bridges carry their own trust assumptions), Rootstock's peg times feel prohibitive.

Modest Adoption Despite Years of Operation

Perhaps the most telling criticism is Rootstock's adoption trajectory. After eight years of operation, the chain averaged just 420 daily active addresses at its Q2 2025 peak, declining to 280 by Q4 2025. DeFi TVL, which touched $260 million in mid-2025, fell to approximately $98 million by early 2026 (per DefiLlama data).

Two protocols, Money on Chain and Sovryn, account for roughly 77% of all DeFi TVL. This concentration suggests Rootstock has not attracted the breadth of developer interest needed to build a self-sustaining ecosystem. The ecosystem page claims 120+ dApps, but active usage data tells a different story.

The developer incentive gap: Ethereum developers who already have thriving ecosystems on Ethereum L2s have limited incentive to port dApps to a chain with a few hundred daily active users. This creates a chicken-and-egg problem: developers want users, users want applications, and the cycle is difficult to break.

Rootstock by the Numbers

Rootstock vs. Newer Bitcoin EVM Chains

A wave of Bitcoin EVM chains launched in 2024 and 2025, each making different tradeoffs around security, bridging, and execution. Comparing them reveals how the landscape has shifted.

Several patterns emerge from this comparison. Hemi attracted over $1 billion in TVL within its first year, more than Rootstock accumulated in eight. Merlin's TVL soared to $1.7 billion during its initial hype phase before collapsing to $15 million in active DeFi, demonstrating how incentive-driven capital can inflate metrics without creating sustainable ecosystems.

Rootstock's advantage is durability. It has operated without a security breach or chain reset for over eight years. Newer chains carry execution risk that only time can evaluate. But durability alone has not translated into growth, and Rootstock's merge-mining security model has not been a sufficient differentiator to attract significant capital or developer attention.

The DeFi Ecosystem: Deep but Narrow

Money on Chain

Money on Chain is Rootstock's largest protocol by TVL, accounting for over 50% of total DeFi value at its peak ($128.6M in Q2 2025). It issues DOC, a stablecoin backed by Bitcoin collateral using a multi-token model. BPro tokens absorb volatility to maintain DOC's dollar peg, while BTCX provides leveraged Bitcoin exposure. The system is overcollateralized and operates entirely on-chain.

Sovryn

Sovryn provides lending, borrowing, margin trading, and AMM-based swaps. It held roughly $64 million in TVL during Q2 2025 (26% of total). Sovryn also issues DLLR, a dollar-pegged stablecoin, and serves as one of the nine Powpeg pegnatories, giving it a dual role in the ecosystem.

Stablecoin Landscape

Rootstock's stablecoin mix is dominated by protocol-native tokens: DOC (25.8%), DLLR (24.5%), and USDT (23.1%) as of Q2 2025. Tether's omnichain USDT0, deployed via LayerZero, went live on Rootstock in Q2 2025 and represented a significant infrastructure milestone. Total stablecoin TVL was approximately $12.8 million by Q4 2025, a modest figure that underscores the chain's limited appeal for stablecoin-based payments.

Lessons for Bitcoin L2 Design

Rootstock's eight-year track record offers several lessons for the broader Bitcoin Layer 2 landscape.

EVM Compatibility Is Not Enough

The thesis that "if you build EVM compatibility, Ethereum developers will come" has not played out for Rootstock. Developers with established user bases on Ethereum and its L2s have little reason to deploy on a chain with a few hundred daily active users. EVM compatibility lowers the technical barrier to deployment but does not solve the demand problem.

Security Without Utility Is Undervalued

Rootstock has arguably the strongest security of any Bitcoin sidechain, inheriting 87% of Bitcoin's hashrate. Yet this has not been a primary driver of TVL or adoption. Users and developers prioritize applications, liquidity, and user experience over abstract security guarantees. Security is necessary but insufficient.

General-Purpose vs. Purpose-Built

Building a general-purpose smart contract platform on Bitcoin means competing with Ethereum's network effects using a fraction of the developer ecosystem. An alternative approach is building purpose-built infrastructure for specific use cases where Bitcoin offers unique advantages. Payments, for example, can leverage Bitcoin's settlement properties and existing liquidity without needing to replicate Ethereum's DeFi stack.

Spark took this approach: instead of porting the EVM to Bitcoin, it built a statechain-based Layer 2 optimized specifically for instant, self-custodial transfers. By solving one problem deeply (fast Bitcoin and stablecoin payments) rather than offering a general execution environment, it avoids the ecosystem bootstrapping challenge that has constrained Rootstock's growth.

The Road Ahead for Rootstock

Rootstock's most important upcoming milestone is the Union Bridge. Built on BitVMX, Union would replace the federated Powpeg with a trust-minimized model where anyone can become a bridge functionary by posting security bonds. This 1-of-n honest assumption model is a significant upgrade from the current 5-of-9 federation. If successfully deployed, it would address the single largest criticism of Rootstock's architecture.

Additional improvements on the roadmap include reducing block times (potentially to 10 seconds via RSKIP517), expanding the Powpeg to 20 pegnatories, and implementing parallel transaction execution to increase throughput. LayerZero and Stargate integration has already connected Rootstock to over 100 chains, which could help attract cross-chain liquidity.

Whether these improvements can reverse the adoption trajectory remains an open question. Rootstock's challenge is not technical capability: it is competing for developer attention and user capital against both Ethereum's mature ecosystem and newer Bitcoin L2s that have demonstrated the ability to attract significant TVL quickly.

Conclusion

Rootstock is the most battle-tested EVM sidechain in Bitcoin's history. Its merge-mining model has achieved remarkable hashrate participation, its developer tooling is mature, and its DeFi protocols have operated without major exploits. These are genuine accomplishments.

But eight years of data also tell a cautionary tale. EVM compatibility did not attract the developer ecosystem needed for self-sustaining growth. The federated peg, while technically sophisticated, remains a trust-based bridge. And general-purpose smart contract functionality on Bitcoin has struggled to find the same product-market fit it found on Ethereum.

For builders considering Bitcoin L2 infrastructure, Rootstock's experience suggests that the most impactful designs may be those that leverage Bitcoin's unique strengths rather than attempting to replicate another chain's ecosystem. To explore a purpose-built approach to Bitcoin payments and stablecoins, see the Spark developer documentation or read the full Bitcoin L2 comparison.

This article is for educational purposes only. It does not constitute financial or investment advice. Bitcoin and Layer 2 protocols involve technical and financial risk. Always do your own research and understand the tradeoffs before using any protocol.