From theblock by Daniel Kuhn

Botanix Labs is launching a new testnet for its “Spiderchain" Bitcoin BTC +6.43%  Layer 2, according to a statement on Wednesday.

The release of the so-called Aragog testnet, which supersedes the company’s previous, unnamed testing network, is accompanied by several “pre-mainnet” applications, including updated versions of the bitcoin-backed stablecoin Palladium and decentralized exchange Blitzy.

Testnets are used across the crypto industry and provide a space for developers to kick the tires on new blockchains and dapps. They serve the critical role of helping developers catch bugs and other possible pitfalls before deploying a fully-live, production-ready system. Updating decentralized protocols that often have multiple stakeholders can be challenging.

Botanix, in particular, is attempting a novel solution to bring “bitcoin back onchain.” Spiderchain gets its name from the series of randomized, decentralized multi-sigs it uses to secure funds from the Bitcoin base layer on a scalable EVM-equivalent software layer, which apparently resembles a spider web. 

Unlike other Bitcoin Layer 2s, which are ultimately reliant on networks like Ethereum, Internet Computer, Cosmos or Polygon, the team argues that Spiderchain's bespoke proof-of-stake solution is fully native to Bitcoin.

“Every member of the Bitcoin economy should work to ensure that demand for onchain applications endures so Bitcoin can fulfill its potential and transition from digital gold to a full global currency,” the New York-based team said in a statement. 

According to previous reporting from The Block, Spiderchain can be used to spin up existing Ethereum-based applications and smart contracts using BTC “in minutes.” The previous testnet reportedly garnered around two million transactions, 400,000 unique addresses and 20,000 token contracts.

Aragog will be the “final step” before the network’s mainnet launch in Q1 2025, the team said.

In addition to earning an official name, Aragog will also introduce a number of technological innovations the Botanix team have been working on rolling out. This includes an early experiment with “state of the art ... flexible round-optimized Schnorr threshold” signatures, a type of cryptography that “federates” multiple key holders into a single multisig address — thereby saving bandwidth and reduces the probability of errors.

Further, while “testnet v0” was run by Botanix Labs using a single node, Aragog will distribute nodes across the globe. 

“Spiderchain offers a Bitcoin-native Layer 2 solution with its unique decentralized multisig approach,” Palladium Labs co-founder Akash Gaurav told The Block. “Unlike most Bitcoin L2s, which are centralized, Spiderchain ensures true decentralization, providing the secure and sovereign smart contract platform essential for supporting our stablecoin and advancing Bitcoin DeFi."