Turning Bitcoin into the Future of Finance – Willem Schroé

Episode Overview

Willem Schroé is the founder of Botanix Labs, a company pioneering decentralized financial infrastructure built on Bitcoin. With a background in mathematics, engineering, and cryptography—Willem was a national math champion in Belgium—he brings deep technical expertise and a bold vision for the future of money.

His journey into Bitcoin began during his time living in Saudi Arabia, where he witnessed firsthand the impact of financial censorship, hyperinflation, and banking restrictions. These experiences inspired him to build tools that separate money from centralized control.

At Botanix Labs, Willem is leading the development of the Spiderchain, a Bitcoin Layer 2 network that brings Ethereum-style smart contracts and DeFi capabilities to the most decentralized and secure asset in the world: Bitcoin. His mission is to help transform Bitcoin from a passive store of value into a programmable foundation for a global, open financial system.

Episode Transcript

Willem Schroé: So you can actually stake your Bitcoin and you get the gas fees back. So it’s raw bitcoin yield. We expect high yields to be there. And this is a game changer. Suddenly you can just like to stake it. It’s an ERC 20 token. So you can use it in the rest of the DeFi ecosystem. You can borrow against staked Bitcoin that actually accrues yield over time. So this is quite a big game changer that I think will change the narrative. Suddenly Bitcoin goes from digital gold to a productive asset.

 Kevin Rosenquist: Hello and welcome to Pay Pod, where we bring you conversations with the trailblazers shaping the future of payments and fintech. My name is  Kevin Rosenquist. Thanks for joining me today. Bitcoin may be the most trusted cryptocurrency in the world, but when it comes to programmability and decentralized finance, it’s been sitting on the sidelines. What if that could change? What if Bitcoin could not only store value but power, smart contracts, DeFi apps and more. My guest today is Willem Schroé , the founder of Botanix Labs, a company building something bold, an Ethereum style smart contract platform that runs on Bitcoin. It’s called the spider chain, and it could transform Bitcoin from a passive asset into the foundation for a new global financial system. In our conversation, Willem breaks down why programmability doesn’t have to compromise Bitcoin’s security, how Bitcoin can evolve without changing at its core, and what happens when you give the world’s most decentralized money a brain? We also explore real world use cases already living on Botanix Labs, from interest free bitcoin backed loans to earning raw bitcoin yield, and why Willem believes we’re heading toward a Bitcoin standard by the year 2100. So please welcome me . So Botanix Labs is creating an EVM equivalent layer two for Bitcoin, meaning developers can build Ethereum style smart contracts using Bitcoin as the underlying asset. So you haven’t said you haven’t, not you haven’t shaken your head. So apparently I have that much right. Can you kind of explain how this works and maybe what you saw, what problem you saw that you wanted to solve?

Willem Schroé: Yeah. No, absolutely. That goes back a few years, I think. I researched cryptography to have a good understanding and became a big bitcoin a few years ago when basically I saw that this, is the new money. This is, potential for a global new reserve currency that can actually be used as money on the internet. And I realized that. So in my mind, I think Bitcoin is a winning money. But then you saw a huge amount of applications being built in the whole crypto industry. You saw all these applications on the EVM. You saw defy existing borrowing, lending stablecoins, gaining massive adoption, different type of yield products existing. And so I realized that all those products are actually the new foundation for a global financial system. And so it only makes sense that you put what I consider the new winning money together with the new foundation for a global financial system. And so what powers that is is the EVM. So I think the EVM as being the Ethereum virtual machine with powers, actually the smart contracts is the winning virtual machine. Now the asset and the virtual machine are different. So I pull them apart. I take the EVM as just a smart contract execution environment and I bring that to Bitcoin. So as a Bitcoin layer two we’re purely connected to Bitcoin. You will use Bitcoin as the asset everywhere within Botanix Labs. Um but you can deploy any smart contract you have on Ethereum. You just copy paste that smart contract. You deploy it on us and boom, the whole thing works in Bitcoin. So now you have Bitcoin as the winning money and Botanix Labs as a layer two the foundation for a global financial system.

 Kevin Rosenquist: What do you think Bitcoin brings to the table that Ethereum doesn’t, you know, replicate a currency that already has a vibrant DeFi ecosystem for Bitcoin.

Willem Schroé: Multiple things. I think, market cap wise, it’s about eight times bigger. So it’s much more capital. And liquidity is always a black hole that eventually always goes to the biggest liquidity pools, which is Bitcoin in the world of crypto. Now why has Bitcoin become so big versus all the other followers is because it’s um one it’s been around the longest. It has the biggest security. It is by far the most decentralized. I think it being proof of work has a real connection to real world energy. And it almost doesn’t change anymore. There’s no one in control like Bitcoin doesn’t upgrade anymore. It’s just there. It’s decentralized. You can verify everything yourself. With Ethere you don’t know what the next changes are. And so that ossification  kind of has brought it a lot of value. It’s the actual decentralized chain with no one at the helm.  and we’ve seen that play out in the market.

 Kevin Rosenquist: Yeah, that’s a good point. That’s definitely a good point. Now, I want to talk about something that sounds super cool. The spider chain. it’s pretty central to what you’re building. Can you talk about exactly how that works and how it differs from other layer two solutions, like rollups or sidechains? What makes it unique to the Bitcoin ecosystem?

Willem Schroé: Absolutely. The spider chain is quite unique in its design. Actually. It’s in its separate category. And the reason is it’s designed to be decentralized. It’s optimized to be actually a decentralized layer. Two. As you know,  both rollups and sidechains are very centralized. We think that works on Ethereum. But Bitcoin is a completely different animal and needs a different approach. And so if you want to build a Wales for a global financial system, that is actually the infrastructure that can run a financial system that needs to be decentralized on Ethereum that can live on Ethereum. Mainchain. Right. That’s fully, fully censorship resistant. But you don’t have that on Bitcoin. So that’s why the spider chain, in essence, is optimized to fully run on Bitcoin and is optimized to be fully decentralized. That separates its design from all the rest of the Bitcoin layer two designs.

 Kevin Rosenquist: Okay. All right. Good description. You’ve said this before I can tell.  you know, I mean Bitcoin was never really designed with programmability in mind. Do you think that this is the time for Bitcoin to evolve or you know like to get to a new spot. Is that what your vision is?

Willem Schroé: Absolutely, absolutely. And I think that’s a good thing. I think Bitcoin on the base layer was optimized for money and a store of value. That’s what gave rise to what we now consider digital gold right. And the whole crypto industry is considered a digital gold because it’s not optimized for programmability. And that’s why it really increased so much right now in Ethereum you have the money and programmability together. What we’re basically doing is pulling these two apart. So Bitcoin on the base layer stores a value of money. What we’re building as layer two is programmability. And so you separate. You have a little bit of segregation of duties. Bitcoin on the base layer. Absolutely. Best money ever made. But then programmability layer a foundation for actual applications and global financial infrastructure.

 Kevin Rosenquist: Okay. What do you envision will be built on top of it? Like it’s the same kind of the same stuff that’s on Ethereum or are you seeing other things? A bit of both.

Willem Schroé: A bit of both. The interesting part is we see teams building on top of things that I never expected. And then of course, you already have product market fit, a functional DeFi ecosystem on Ethereum. And so that’s coming over. And so I’m actually quite excited to see all these big tier one names of Ethereum actually realizing this potential. Like if you are a big Ethereum application or any application in the crypto industry, you have to ask yourself, what is my Bitcoin strategy? And Bitcoin has the most users and the most liquidity. So it actually makes sense that all these applications at some point will come to Bitcoin. And we’ve already seen it. So you have GM of course, the, the, the, the biggest, name in terms of, longing and shorting in Texas. Their life. And you have Chainlink probably the biggest oracle with the biggest amount of market share on Botanix Labs. And so all these applications that run a functional, DeFi ecosystem, we have a bunch of different stablecoins, Bitcoin backed stablecoins like palladium. That’s a CDP. So they actually do interest free, stablecoin loans against your Bitcoin. So,  suddenly you can have the biggest applications you want to do with your Bitcoin, like you want to trade it against stablecoins. Boom. You can do it on Bitcoin. You want a long short Bitcoin boom. You can do it on Bitcoin. Um if you want to get Bitcoin yield. And we’ll get into that later as well. If you want to get a Bitcoin yield boom you can do it on Bitcoin. This is a whole new paradigm shift and a whole new DeFi ecosystem that is going to evolve and exist.

 Kevin Rosenquist: If you can tell us what’s the most surprising thing someone’s built that you were like, whoa, I didn’t see that coming.

Willem Schroé: I think the interest free, stablecoin loans are very interesting. That is interesting. Same same for like, the borrowing and lending protocols and the yield products.  so quite a few things here.

 Kevin Rosenquist: Yeah, that’s really cool. So what are some other, other use cases,  that you, that you would like to see this sort of just evolve into, as it, as it grows?

Willem Schroé: Yeah. No, I think, a lot has been said about tokenization and real world assets. I absolutely believe they will come on chain. And I think the most logical place is for it to be on Bitcoin. As we know, Bitcoiners are often also goldbugs.  What if you can trade gold and do it actually on a chain? If you make more money, if you make more bitcoin, immediately withdraw it to your cold wallet. And so if you think about all the big building blocks of your traditional financial system, that will all go on chain. And so there’s much more, more to come. Once legal,  part of it actually follows as well. And I think this is really a big game changer. You had,  if you think about the future of money, right. You start a store of value. What we’re building right here, right now. And what you see is Bitcoin as a medium of exchange. This is the next step.  and then we go into a money account, into a unit of account or money. But the medium of exchange has traditionally been outside of Bitcoin.  So now this is the next step from digital gold making Bitcoin as a medium of exchange okay.

 Kevin Rosenquist: And you have this infrastructure. What are some of the milestones that Botanix Labs needs to hit to drive adoption from developers and users alike? How can you scale?

Willem Schroé: That’s a great question. I always consider it a two sided marketplace. We have the applications and we have the users. Now the applications are already there. We have a bunch of applications.  you have the GM of the world, you have, dolomite where you can do borrowing, lending. You’ve got two dexes where you can play around and you have a meme coin launchpad, for example, as well. And,  that will of course drive a lot of users. We have a main ad campaign, so we are basically displaying, 2100, the year 2100 a world on Bitcoin. So it’s a map and users can go around, use different applications and actually educate themselves. Okay. Now Bitcoin is money. How do I actually start using that as money in a new world?  Which is yeah, 75 years from now, we expect Bitcoin to be the money. Besides that, we have the Bitcoin Citadel where people can actually earn new bitcoin by playing different, different games. And so the users want to make more bitcoin. The users want to swap stablecoins versus bitcoin and the other way around one a long short. And so we basically showcase that.

Willem Schroé: And now you can all start to use that one additional small thing that I want to, I want to mention here is Bitcoin yield. There has been a bunch of different applications screaming yes we have Bitcoin yield. But most of that Bitcoin yield has always been in different assets. So for example you stake your Bitcoin and you get another token or you use it as collateral and you get another token. The cool thing is what we’re building is layer two. All the gas fees and transaction fees are in Bitcoin. So you can actually stake your bitcoin and you get the gas fees back. So it’s raw bitcoin yield. We expect high yields to be there. Um and this is a game changer. Suddenly you can just like to stake it. It’s an ERC 20 token. So you can use it in the rest of the DeFi ecosystem. You can borrow against staked Bitcoin that actually accrues yield over time. So this is quite a big game changer that I think will, yeah, will change the narrative. Suddenly Bitcoin goes from digital gold to a productive asset. Bassett.

 Kevin Rosenquist: Mhm. And did you say that you think in 75 years you think that’s the currency.

Willem Schroé: Yes, 100%.

 Kevin Rosenquist: Yeah. Why 75 years. I’m just curious. Is it just a guess.

Willem Schroé: No, I think Bitcoin will be money by the year 2050.  Why 75 years? 2100 sounded cool as a year.

 Kevin Rosenquist: I like it, I like it. That makes a lot of sense. So this is super cool. I’m. I’m intrigued by you, too. You started as a researcher, and now you’re leading this startup trying to reshape Bitcoin. What? You know, you know, you kind of talked a little bit about getting into crypto or getting into bitcoin and all that. But what you know, where does this come from? Where does this desire to build this new, very groundbreaking system come from?

Willem Schroé: Yeah, that’s a great question. So yeah, I grew up in Belgium and became a national champion in mathematics. I did engineering, electrical engineering research.

 Kevin Rosenquist: Cryptography, mathematics. Whew. Okay.

Willem Schroé: Belgium is a small country, though.  so.

 Kevin Rosenquist: Don’t sell yourself short.

Willem Schroé:  yeah. Then researching cryptography. So broke some authenticated encryption schemes and then started working in chemicals and actually moved to Saudi Arabia. So I lived a year and a half in Saudi, and that’s a little bit where I found that passion. I saw people get their bank accounts seized, I saw hyperinflation happening. And that’s when it really hits you. Right? Like you want to separate, government, and money or money and state. That’s what got me into Bitcoin. It’s this, higher level vision that we can make this world a better place. I don’t believe that the government should be in control of money. That has never been the case in society. We always had gold. Every time a government was in control of money, it always ended bad. Yeah. And so I genuinely believe Bitcoin is a better form of money that will do really, really well for a lot of people in the world. I think it makes sense that money is not a weapon, so it should be decentralized. It’s like the internet. Think about the internet, how it leveled the playing field across the world for all different humans, and it makes sense that the same thing happens for money. So I wanted to help Bitcoin forward faster and reach that money globally. And so the next obvious next step is like okay you see Bitcoin. But then you see all these applications and you see Bitcoin is just digital gold. Like how do I get all these applications and bring that to Bitcoin. And I actually believe what we’re actually building here can be the global rails for financial infrastructure. I do believe a lot of companies and governments will want to start trading in Bitcoin.  Yeah. It’s very hard to do that actually on bitcoin. But if you can do that on a layer two then that makes a lot of sense. 50 years from now.

 Kevin Rosenquist: Do you believe it or 75. Do you believe that this will lead to a substantial increase in financial inclusion across the globe?

Willem Schroé: 100%? Yeah. I mean, you’ve seen it over and over again. And the best example is probably stablecoins. Paolo and Better, I think have 400 million people, especially for the fintech listeners. A lot of people have talked about banking the unbanked. The funny thing is, and the ironic thing is that stablecoins are banking on many more people than anything else. Like today, you can download your telegram wallet,  on your phone and you can just start sending stablecoins, US dollar stablecoins from one person to the other. And that’s what actual people are doing on the ground.  and so that’s financial inclusion. Like that’s fully permissionless, that’s censorship resistant. Governments don’t like it. But now you actually have people that can start safe US dollar stablecoins. And  it’s a question of time before the US dollar eventually inflates further and further and further away. And you end up in a, in a Bitcoin standard.

 Kevin Rosenquist: You mentioned governments don’t like it. Big banks don’t like it. How do you break through that? The powers that be in order to get more widespread adoption.

Willem Schroé: I mean, we’ve already seen it happen. Governments try to fight Bitcoin. It has been banned countless times across the world in so many different jurisdictions. Yeah you’re right. It has crossed that chasm. Like you can no longer ban it. It has become bigger than any government in the world, and that’s how it’s supposed to be. That’s a good thing. So, yeah, I don’t see that happen. The best thing to actually do as a government or a company in the world is to be an early adopter. It’s the same thing we saw in the 1800s, when England went on a gold standard as the first country in the world, and then gold became a global standard in the world. So if you’re the first mover, if you’re the first country moving to a Bitcoin standard, you gain all the rewards. So it’s this very funny game theory that you can try to fight it on your own, but if all the rest adopts it, you don’t want to be the last one adopting bitcoin, right? You want to be the first one if it happens. And so it’s a self-fulfilling prophecy after a while.

 Kevin Rosenquist: Yeah. Yeah that’s very true. 32. I mean, I remember a few years ago watching the Super Bowl and like every other ad was a crypto ad. And then of course SVB happened, FTX happened. Other smaller ones happened. So, you know, people I think all of a sudden it just was like people were like, well, this is a bunch of BS, you know. Was there ever a point where you were like, oh man, this might collapse. This might not work?

Willem Schroé: No.  The funny thing is, especially as a bitcoiner, you always have Bitcoin and you have the rest and the rest.

 Kevin Rosenquist: Yeah, yeah.

Willem Schroé: And so Bitcoin has never really been at risk here. Like the network just runs. And so yes the industry is filled with a huge amount of scams. And we saw a lot of scams and fraud happening in 2017. So the same thing happened with SBF, exactly like you said in 2021. And so I think we’ll see. We will keep seeing all that is happening. However, that doesn’t mean that Bitcoin is in the same bucket. And so as a user there’s a big learning curve to go through. But eventually I think people will start to separate. Like, yes, Bitcoin will always be there. Like Bitcoin is not going away anymore. And so you don’t want to buy something. You don’t know what it is. But you do know that Bitcoin has been around for I think 15 years now. Um it has crossed that Lindy effect. It’s going to be there.

 Kevin Rosenquist: Do you feel like there’s trust in other coins. Is there trust in Ethereum from your view? Is there trust in other coins or is it like Bitcoin and the rest?

Willem Schroé: No, I think there’s a lot of trust in Ethereum and Solana. I think the problem a little bit is that Bitcoin is king.  and the network is proven. The code is much cleaner. It’s safer. it’s more secure. It doesn’t change anymore. And so there  wants to be both money and the smart contract platform. But it’s a worse version of money than Bitcoin and it’s a worse version than, applications than Solana. So it’s like in this middle where Bitcoin is better money and Solana is a better execution environment. And so,  it’s hard to compete with that. But yeah, Ethereum definitely has proven its longevity. And same for Solana, which is probably the more recent mover. But then again you go into this argument okay. You had Bitcoin ten minute blocks. You can go faster. You go to Ethereum 12 second blocks, you can go faster and you go into Solana. But what comes after Solana and it’s this endless road of you can always go faster. You can always have a better execution environment. And so that never ends. What you always give up though is decentralization. And so that’s where Bitcoin shines.

 Kevin Rosenquist: Yeah, interesting. Do you feel like Solana and Ethereum are legitimate competitors or whatever to bitcoin. Or do you think something else will come around that is similar to bitcoin or is Bitcoin really unique?

Willem Schroé: Bitcoin is really unique. I don’t think there will be competitors to what Bitcoin exactly is as the money. What Ethereum and Solana showcase these applications is actually rails for a financial ecosystem to exist. But Bitcoin in essence has been a result of research for 40 years,  and has optimized for exactly what it is and it has made the best trade offs and I don’t think you can. It’s very hard to make a better Bitcoin today.

 Kevin Rosenquist: Yeah. Yeah. Well like you said 15 years and been through a lot but still going strong. So I guess  I guess that’s what I guess that checks out. Well  the company has Botanix Labs. Check them out.  Really appreciate your time. Great conversation.

Willem Schroé: Absolutely. Thank you. Kevin.