Crypto: Citrea Zk-rollup Launch Reignites Bitcoin Block Space Debate

Citrea’s Bitcoin rollup has become a live experiment in whether BTC can support a full DeFi and stablecoin stack, and how much complexity Bitcoin should anchor at the base layer.

Founders Fund and Galaxy Ventures-backed Bitcoin zero-knowledge rollup (ZK-rollup) Citrea launched its mainnet on Tuesday with BTC collateral lending, BTC-structured products and a new US dollar stablecoin, ctUSD.

The launch is aimed at turning what Citrea calls “economically idle” Bitcoin (BTC) into base collateral for decentralized finance (DeFi) and payments, while anchoring more of that activity to Bitcoin’s base layer.

The team expects active DeFi liquidity to reach $50 million in the first few weeks, with BTC lending, BTC-structured products, and decentralized trading already live from day one.

The mainnet debut immediately dropped Citrea into a familiar Bitcoin argument: What should scarce BTC block space actually be used for?

With block rewards declining over time, many developers see non‑payment use cases like Citrea as essential to sustaining miner fee revenue.

However, purists argue Bitcoin’s limited capacity should be reserved for simple, censorship‑resistant payments rather than complex financial systems built on top.

CtUSD is issued by MoonPay, a regulated crypto payments and infrastructure company that provides fiat on- and off‑ramps for digital assets.

Related: Animoca, RootstockLabs partner to bring Bitcoin DeFi to Japanese institutions

It is backed 1:1 by cash and short‑term US Treasurys, and marketed as a compliance‑forward alternative to wrapped Tether (USDT) and wrapped USDC (USDC) that circulate on Bitcoin‑adjacent stacks.

Source: CoinTelegraph