Rootstock (RSK) Network Activity Declined 24% QoQ in Q1 2025

Rootstock is a permissionless Bitcoin sidechain that launched its mainnet in January 2018. It aims to bring smart contract functionality to the Bitcoin network.

Key Takeaways

* As more partners join merge mining, transaction fees continue to decrease on Rootstock. Total revenue fell 24% qoq to 3.27 rBTC.

* Average daily transactions rose 4.3% qoq, but user participation declined, with active addresses down 26.5% and new addresses down 55.7%.

* Merged mining surged 36.8% as the integration of Foundry and SpiderPool boosted participation to 81%. Hashing power also rose to 740 EH/s.

* In another highlight, gas fees decreased significantly due to protocol-level optimizations.

* After a strong Q4 performance, average daily active addresses pulled back 26.5% qoq to 254, while new addresses dropped sharply by 54.7% qoq to an average of 23 per day.

* Despite the overall decline in address activity, Q1 saw a brief surge in daily active addresses, peaking at 1,052 on March 28, likely driven by Meson Finance enabling stablecoin bridging to Rootstock.

* Transaction throughput remained steady, with a 4.3% increase in average daily transactions to 11,524, bringing the total transaction volume for Q1 to a little over 1.04 million.

* Transaction volumes fluctuated throughout the quarter, with peak usage recorded on February 25 at 24,107 transactions and the lowest activity on March 21 at 7,781 transactions.

* The most notable structural shift came with the reduction of gas fees.

Ecosystem and Development Overview

* Rising slightly from the previous quarter, the price of rBTC went up 5.5% qoq, and total network revenue also increased.

* After a strong performance in 2024, Rootstock’s DeFi ecosystem saw a contraction in BTC-denominated TVL and a more pronounced decline in USD terms during Q1 2025.

* From January 1 to March 31, TVL dropped 7.2%, beginning the year at 2,363 BTC and decreasing to 2,193 BTC.

* In late January, USD TVL peaked at $244.6 million. This peak coincided with favorable BTC price momentum but was not sustained. From early March onward, BTC and USD TVL trended downward, closely following overall market trends.

* Despite a decline from Q4 2024, USDT remained the dominant stablecoin on Rootstock at the start of Q1 2025, holding a 27.5% market share with $3.8 million in value.

* However, compared to the previous quarter, where USDT had a 41.3% market share, we observed a diversification of stablecoins on the network. No single stablecoin had over a 30% market share in Q1.

* Diversification in the stablecoin landscape is a positive development as it indicates a broader and more engaged user base, which is crucial for long-term ecosystem growth.

* A 19.15% quarter-over-quarter decline in total TVL brought it to $179.9 million in Q1 2025.

* MoneyOnChain, despite remaining the largest protocol by TVL, saw a 10.5% decrease, dropping from $111.2 million to $99.5 million.

* The contraction in TVL across Rootstock’s leading protocols reflected broader ecosystem dynamics, suggesting that the downturn was not limited to isolated projects.

Integrations

* DeFi protocols: Stargate, a cross-chain liquidity protocol, announced integration with Rootstock in January 2025 to facilitate seamless token transfers and liquidity across different chains.

* Wallets and others: Enkrypt, a multi-chain hardware wallet, announced support for the Rootstock ecosystem in February 2025, providing users with a secure and convenient way to manage their digital assets on Rootstock.

Merged Mining

* In Q1 2025, Foundry, the world’s largest Bitcoin mining pool, joined merged mining on the Rootstock blockchain. SpiderPool, the sixth-largest mining pool, also began merging mining on the chain.

* With the addition of Foundry, merged mining participation rose to 81%, and hashing power reached 740 EH/s. For context, this surpasses the total hashrate of the Bitcoin network, which was around 690 EH/s in October 2024.

* Hashing power is a crucial aspect of blockchain security, and greater participation from diverse mining pools strengthens the Rootstock network against potential attacks.

* Moreover, at the start of 2025, the top three contributors