Friendly reminder: The 'Seven Deadly Sins of the Bitcoin Ecosystem' listed in this article are purely jesting and not intended to defame or undermine the faith attributes of Bitcoin. We respect Satoshi Nakamoto and revere time. If any viewpoints are harsh, we hope ecosystem builders will bear with it.
Pizza Day marks its 14th year, and Bitcoin also surpassed $110,000 today, setting a new high. Bitcoin is on the rise, yet the Bitcoin ecosystem seems to be declining.
Bitcoin has grown from a white paper to a new anchor for global assets, and the story of the Bitcoin ecosystem has transformed from a simple technical narrative into a complex picture interwoven with humanity, market, power, and belief. Yet, amidst all the noise, the real issues are seldom mentioned.
Pizza Day is worth commemorating and reflecting upon. At this juncture, we might as well use a clearer perspective to sort out the hidden 'seven deadly sins' behind the Bitcoin ecosystem.
The light of ideals shines into the troubles of reality
Bitcoin's market value returned to the trillion-dollar mark at the beginning of 2024, and it has been nearly a year and a half, yet its ecosystem's activity level is severely imbalanced with its asset size.
As of now, in 2025, only 13 projects in the Bitcoin ecosystem have completed financing, compared to 72 during the same period last year, with a total of 126 for the entire year. The number of financings has nearly halved, and capital enthusiasm has quickly waned.
Looking at on-chain data, DefiLlama shows that the current TVL of the Bitcoin ecosystem is only $6.3 billion, one-tenth of Ethereum's ecosystem ($62.3 billion). Among this, Babylon has contributed $5 billion, accounting for over 80%, indicating an extremely concentrated ecological structure.
When comparing TVL and token market value, the problem becomes even more glaring: Bitcoin's TVL/market value ratio is only 0.2%, far below the average level of mainstream public chains. Chains like Ethereum, Solana, and TRON generally maintain above 10%, with significantly higher capital utilization efficiency than Bitcoin.
In addition, looking back at the star projects of the Bitcoin ecosystem, such as L2 direction Stacks, Merlin Chain, staking tracks Solv Protocol, Babylon, BounceBit, and the inscribed assets ORDI, SATS, most have continued to perform poorly in price.
Bitcoin, while being the 'golden signboard' of the crypto market, is almost a hollow tower in terms of ecosystem construction. Here are the 'seven deadly sins' that we have sorted out.
The First Deadly Sin - The Sin of Ecosystem Bubble
From the end of 2023 to 2024, the Bitcoin ecosystem is ushering in a wave of 'grand' awakening narratives. From inscriptions to L2, to re-staking, it seems that overnight, the dormant Bitcoin ecosystem has suddenly become a breeding ground for innovation. But when the market fervor fades, the truly settled results remain sparse.
Many protocols themselves do not have disruptive innovation, neither reconstructing existing paradigms nor creating genuinely new market demands. A large number of projects are merely repackaged old concepts, with weak underlying structures, rough designs, and detached from use cases. The related teams are uneven, with very few truly possessing the willingness and ability for long-term construction.
As community member @blapta said: 'From a business outcome perspective, these so-called technologically leading projects are almost all unrealized. Whether the protocol is established is no longer the focus; after one round of financing, the story is told, and the flag is lowered. This is not only a technical failure but also a cultural silence.'
The Second Deadly Sin - The Sin of Dogmatism and Infighting
Idealism has never been absent from the Bitcoin ecosystem; however, when it converges with dogmatism, it quietly transforms into closure and self-limitation. In this system, which prides itself on 'decentralized faith', technical routes, consensus mechanisms, and even development directions can easily evolve into black-and-white factional struggles once they touch upon a certain 'fundamentalist' stance.
Every major upgrade of the Bitcoin network has almost undergone a lengthy acceptance process. SegWit, two years after activation, covered only about 50% of transactions and approached 80% four years later; the Taproot launched in November 2021 was similarly slow, with an adoption rate of less than 1% at the beginning of 2023, reaching only 39% by early 2024. Developers and the community are extremely cautious about the evolution of the protocol.
Historical BCH and BSV fork events also confirm the deep-rooted sources of the early ideological rifts and faction conflicts within the Bitcoin community. At the same time, some community members hold a resistant attitude towards innovative directions like smart contracts and asset issuance, with a long-term game and divergence always existing between 'adhering to Satoshi Nakamoto's route' and 'promoting functional upgrades.'
The Third Deadly Sin - The Sin of Talent Erosion
If developers are the dreamers and builders of a public chain ecosystem, then Bitcoin is undergoing a chronic talent drain crisis. Unlike the vibrant development enthusiasm and business momentum exhibited by ecosystems like Ethereum and Solana, Bitcoin's development landscape is becoming increasingly sparse.
This decline in development capacity partly stems from its long-term reliance on a donation-driven development model, lacking a stable and sustainable incentive system, making it difficult to attract fresh blood and retain experienced veterans.
According to DeveloperReport data, there are currently only 359 full-time developers in the Bitcoin ecosystem, with the number of full-time developers with one year of experience decreasing by 9.1%, and those with more than two years of experience also decreasing by 4%. When counting only core chain developers (excluding EVM and SVM stacks), Bitcoin ranks fifth among all chains, far below Ethereum, which ranks first with 2,181 developers, making Ethereum's developer count six times that of Bitcoin.
Notably, among the limited developers, as many as 42% focus on expanding functional solutions, indicating that manpower for Bitcoin's native application layer and other areas is even scarcer.
The Fourth Deadly Sin: The Sin of Value Retention
The enormous Bitcoin supply has not transformed into financial productivity but has settled as 'dormant capital' on-chain. According to the latest research from Binance Research, only 0.79% of Bitcoin is actually used for DeFi, while more than 60% of Bitcoin that has not been transferred in the past year accounts for total supply, and this ratio continues to rise.
This reflects the further solidification of Bitcoin's 'digital gold' positioning, but also exposes a serious gap in its ecosystem regarding financial usability. Bitcoin holders have very limited ways to utilize their assets, mainly concentrated in centralized lending platforms or cross-chain generated WBTC, but these paths generally face issues such as low yields, high centralization risk, and insufficient security, lacking attractiveness.
In contrast, Bitcoin's financial ecosystem has yet to establish a sustainable asset utilization mechanism, failing to meet investors' multi-layered demands for yield acquisition, risk management, and strategy deployment. This 'value retention' is becoming a key shackle limiting the evolution of the Bitcoin ecosystem.
The Fifth Deadly Sin: The Sin of Attention Mismatch
Recent upgrade discussions in the Bitcoin community have fallen into a 'high heat, low efficiency' vicious cycle: there are few proposals with genuine technical depth and development potential, while some 'trivial' issues are repeatedly debated.
Taking BIP177 as an example, although it is merely an adjustment to the unit display method, it has sparked prolonged disputes within the community; whereas proposals that could genuinely elevate protocol capabilities, such as the CTV + CSFS combination for asynchronous payments and optional payment paths, and BIP360 (for quantum attack resistance) that addresses future security challenges, have received little attention.
The already inefficient BIP system in Bitcoin's governance mechanism has become even more rigid under this attention mismatch. The core upgrades that truly need widespread testing, evaluation, and collaborative promotion are quietly silenced amid the struggle for discourse. Community member @blapta stated, 'I hope Bitcoin's community discussions can return to normal discussions soon; if this drags on, the developers will age.'
The Sixth Deadly Sin: The Sin of Closed Narratives
In the fast-paced crypto industry, the narrative of the Bitcoin ecosystem appears particularly monotonous. The 'digital gold' narrative plays a role in solidifying consensus and conveying value, but it should not evolve into a structure that limits innovation and expands functionality imagination.
In contrast, other chain ecosystems continuously stimulate new interests and narratives around Restaking, memes, DePIN, AI, etc., driving sustained flow of community vitality and capital attention.
Although Taproot Assets, Ordinals, and others have briefly sparked imaginative space, the lack of sustained narrative pushing and systematic support has ultimately failed to form a solid growth curve.
The Seventh Deadly Sin: The Sin of Lack of Investability
In a capital-driven market system, 'investability' determines the final flow of funds. Speculation is the most genuine and honest flow logic of on-chain funds. However, the shortcomings of the Bitcoin ecosystem in this regard are exceptionally apparent: deployment is complex, liquidity is weak, and trading mechanisms are primitive, making it difficult for market makers, arbitrageurs, and hot money to enter and exit efficiently.
From the data side, we can see a glimpse: except for 2024, which briefly attracted capital attention due to the Ordinals and Runes craze, the financing performance of the Bitcoin ecosystem in other years has been lackluster. Notably, large financing projects over ten million dollars are rare, directly reflecting mainstream investment institutions' doubts and reservations about the 'investability' of the Bitcoin ecosystem.
Face the problem, you can go further
We look back at our original intention and face reality. Today's Bitcoin ecosystem is both a mid-term review of a technological experiment and a mirror reflecting culture and order. The term 'seven deadly sins' is merely a jest; the true starting point is the hope that the ecosystem can revive and find a direction for sustainable growth.
This article is authorized to be reprinted from: (ForesightNews)
Author: Fairy, ChainCatcher
'Bitcoin Hits New High! But the Ecosystem is in Trouble? The 'Seven Deadly Sins' Uncover the Underlying Issues: A Tiger's Head and a Snake's Tail' was first published in 'Crypto City'
