The distributed finance (DeFi) ecosystem of Bitcoin is changing really remarkably. Mining involvement is reaching hitherto unheard-of levels even as the total value locked (TVL) across Bitcoin-based DeFi platforms falls. This trend emphasises a critical change in emphasis from short-term financial flows to long-term infrastructure stability. Despite recent Bitcoin Market challenges, Bitcoin DeFi is creating strong foundations as more miners support network security and a dedicated group of customers keeps transacting.
Miner’s Confidence at Peak All-Time
Early in 2025, combined mining activity on Bitcoin Layer-2 systems—especially Rootstock—showcased a sharp increase. With merged mining, Bitcoin users can concurrently protect the Bitcoin network and compatible Layer-2 chains without extra energy expenditure. For Rootstock, involvement shot to over 80% of the total Bitcoin network hash rate. Following the onboarding of numerous significant mining pools, this rise brought Rootstock’s hash power above 740 exahashes per second.
This degree of miner involvement is a major clue regarding future confidence in Bitcoin DeFi. Contributing to network security lets miners basically confirm the possibilities of DeFi applications developed on Bitcoin. It also guarantees the integrity of smart contracts and transactions on the Layer-2 network, which appeals more to institutions and developers both. In a sector where security is top priority, this trend is encouraging and could result in more general acceptance over time.
TVL Reduces Reflect Market Caution
The financial side of the network tells a different narrative as the security side of it strengthens. TVL across several Bitcoin DeFi systems has been consistently dropping. Dollarwise, TVL declined over 20% in the first quarter of 2025 while Bitcoin-denominated TVL lost about 7%. This fall came after a brief peak in January when increasing Bitcoin values momentarily raised dollar-based values.
The decline in TVL fits a larger trend observed in the whole DeFi industry. Many investors are more wary of changing bitcoin prices, global economic uncertainties, and continuous governmental monitoring. Users are choosing to hold or migrate money to safer, more liquid positions instead of locking assets inside systems. Although this could seem like a setback, TVL is only one measure—and not always the ideal one to gauge the state or future direction of a protocol.
Active Users Dip, Still Core Engagement Remains
Along with TVL declining, user activity on Bitcoin DeFi sites has also dropped. There are much less active addresses now, and new wallet construction has slowed down as well. These changes imply that, in this phase of lower excitement, less retail users are interacting with the ecosystem.
All the same, general transaction activity has been somewhat consistent. On websites like Rootstock, daily transaction numbers have actually dropped somewhat, averaging over 11,000 daily. This durability suggests that a fundamental base of users—probably developers, seasoned DeFi users, and institutional testers—keeps interacting with the network. Stated differently, the builders and long-time believers are still engaged even if casual users may have left.
Reduced Fees Present Possibilities
The notable drop in transaction costs for Bitcoin DeFi represents one of the most exciting developments. With Layer-2 networks’ about 60% cut in fees, developers and consumers can now deploy and engage with smart contracts significantly more reasonably affordably. This decline not only enhances user experience but also raises the possibility that fresh ventures may start on these platforms.
Bitcoin DeFi might draw more developers looking for low-cost substitutes for Ethereum and other higher-fee ecosystems as lower costs lower entrance obstacles. This can then inspire creativity and inject new life back into the network, therefore reversing the TVL declining tendency.
Bitcoin DeFi strategic inflection point
Bitcoin DeFi finds a crucial turning point in the present discrepancy between dropping TVL and increasing miner involvement. Though user involvement and money flow need catch-up, the infrastructure is stronger than ever. Deeper cross-chain connectivity, improved interoperability with Ethereum tools, and upcoming protocol updates could give the impetus required for the following expansion phase.
Bitcoin DeFi has a great chance to come out of this transitional phase stronger and more durable than before if developers and platforms can harness the improved security and affordability of the network to draw in fresh users and create convincing use cases.
