Author: Weilin, PANews
In the decentralized finance (BTCFi) ecosystem of Bitcoin, Core is a Bitcoin-driven, EVM-compatible L1 blockchain. The security of validation nodes is maintained by miners, Bitcoin staking, and the staking of Core's native tokens. With its innovative Satoshi Plus consensus that combines Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS), Core is providing Bitcoin holders with long-term and robust earning opportunities.
Currently, approximately 75% of Bitcoin mining hash power has contributed to Core's model through DPoW, and over 9,000 Bitcoins have participated in its staking through non-custodial Bitcoin staking. Core is unlocking the potential of Bitcoin, making it a major protector and core asset in the future of decentralized finance.
On November 19, Core completed the Fusion upgrade, introducing two innovative products: Core dual staking and Core LstBTC. This article will delve into the important changes brought by this upgrade and explore the trend of institutional adoption of BTCFi.
Deeply engaged in the Bitcoin community, Core has innovatively launched the Satoshi Plus consensus.
The foundation of Core is its innovative Satoshi Plus consensus mechanism, where the DPoW mechanism allows Bitcoin miners to settle hash power on the Bitcoin mainnet through syntax like OP_Return and delegate it to preferred validation nodes to earn CORE token rewards. In this way, Core not only gains protection from Bitcoin miners but also enhances miners' earnings, especially in the context of reduced Bitcoin block rewards, as Core's block rewards supplement the post-halving reward gap.
On the other hand, the Delegated Proof of Stake (DPoS) in the Satoshi Plus consensus allows CORE token holders to support network security by delegating their CORE to validation nodes. This enables participation in the election of these validators and earns CORE token rewards for securing the chain. The key to this mechanism is the 'hybrid score,' which selects the top 27 validators by calculating delegated hash and delegated shares, updated every 24 hours to ensure the decentralization and stability of the network.
The third important component of the Satoshi Plus consensus is non-custodial Bitcoin staking. Since its launch in April 2024, the delegation amount of Core blockchain validators has exceeded 9,000 Bitcoins at one point. This method centers around absolute time locks, a native feature of Bitcoin that allows holders to lock their Bitcoins for a predefined period during which they cannot be spent. While the Bitcoins remain locked on the Bitcoin blockchain, stakers delegate these Bitcoins to elect Core validators, who secure Core and earn CORE token rewards. Through this process, Bitcoin holders receive daily CORE token rewards without giving up custody of their assets or assuming counterparty risk.
It is noteworthy that Core has a deep connection with the Bitcoin community, especially with miners and Bitcoin holders. This distinguishes Core from other Bitcoin L2 or sidechain projects. Over 75% of global mining hash power supports the Core network through Delegated Proof of Work (DPoW), contributing hash power to the validation nodes on the chain to earn security rewards. The zero-risk, no asset transfer nature of non-custodial Bitcoin staking makes many large Bitcoin holders and institutions willing to trust Core's technology and delegate their Bitcoins to validation nodes to maintain network security. Unlike other Bitcoin projects, Core places greater emphasis on meeting Bitcoin holders' concerns about safety and practical needs while providing earning opportunities.
Key points of the Fusion upgrade: introduction of dual staking and LstBTC.
In January of this year, the approval of the Bitcoin spot ETF and the results of the U.S. elections in November led the cryptocurrency industry to once again reach a peak of interest. The traditional financial sector has been seeking more flexible ways to participate in Bitcoin.
In this context, on November 19, Core further launched the Fusion upgrade. The Fusion upgrade enhances Core's BTCFi ecosystem through Core dual staking and LstBTC, providing institutions with a more efficient means of participation.
The introduction of the dual staking product aims to address the potential imbalance in community reward distribution caused by Bitcoin stakers locking their assets during the non-custodial staking process while receiving CORE token rewards through validation nodes. Especially in the case of institutions staking large amounts of Bitcoin, the released CORE rewards will correspondingly increase. Against this backdrop, to encourage Bitcoin stakers to re-stake the CORE rewards they receive, dual staking increases user participation willingness by offering higher annualized percentage yields (APY). Dual staking is divided into four levels, with the reward ratio varying based on the amount of staked CORE relative to Bitcoin. These levels are Base, which is 0 CORE:1 BTC; Boost, which is 1,000 CORE:1 BTC; Super, which is 3,000 CORE:1 BTC; and Satoshi, which is 8,000 CORE:1 BTC, with the Satoshi level receiving the highest reward ratio.
The foundation of dual staking is the further development of non-custodial Bitcoin staking launched in April, allowing Bitcoin stakers to stake CORE tokens to receive higher validation node rewards. On the other hand, it also incentivizes CORE token holders to obtain higher staking rewards by holding and staking small amounts of Bitcoin (with a minimum participation of 0.01 BTC) compared to staking only CORE tokens. With the staking mechanism, Core has strengthened its alignment with Bitcoin, allowing many institutions to explore the potential for Bitcoin earnings while maintaining the security and sustainability of the Core blockchain.
Overall, the Fusion upgrade has a significant and favorable impact on the entire Core ecosystem. Before the Fusion upgrade, Delegated Proof of Work had already attracted over half of the total Bitcoin hash power. However, not all hash power delegators were clear on how to handle their CORE token rewards. Although CORE is the most useful token on the Core blockchain (used for paying gas fees, staking, and governance), miners often do not pay attention to non-mining activities. The CORE tokens introduced by the Fusion upgrade enhance the utility of staking, incentivizing miners to stake their CORE rewards to earn returns on their Bitcoin reserves.
Moreover, before the upgrade, Bitcoin stakers earned CORE tokens, which they could also stake, but CORE staking was independent of their primary interest in Bitcoin staking. By dual staking, Bitcoin stakers also stake CORE tokens, closing the economic value loop and further aligning Bitcoin with CORE assets. This capability enhances Bitcoin stakers' commitment to the earnings and security promises of Core.
Before Fusion, the three components of the Satoshi Plus consensus operated largely in isolation. Even though miners and Bitcoin stakers were closely linked to the Core community, these components were integrated after the introduction of dual staking, allowing all stakeholders to reach a consensus around the Core network and CORE tokens.
Another key part of this upgrade is LstBTC, which allows Bitcoin stakers to maintain their liquidity in the Core DeFi ecosystem while staking BTC. Additionally, they receive CORE tokens as rewards during staking. While earning Bitcoin staking rewards, users can use their LstBTC for lending, trading, re-staking, and participating in other on-chain activities.
There are over 200 projects within the ecosystem, and institutional adoption is becoming a trend.
With the continued development of the Core network, more decentralized finance projects are being built on its platform. Currently, the number of ecosystem projects on the Core chain has exceeded 200, including Pell Network, Solv Protocol, Avalon Finance, DeSyn Protocol, Colend, and others. The addition of these projects not only drives the expansion of the Core ecosystem but also provides momentum for its TVL (Total Value Locked) growth.
In 2024, the data growth on the Core chain was significant: by the third quarter, its TVL grew by 614%, and the staking amounts of Bitcoin and CORE tokens increased by 85%. As of December 12, Core's TVL has surpassed $983 million, with over 31.5 million on-chain unique addresses and 327 million transactions completed.
Core's innovation has not only attracted Bitcoin holders but also garnered the attention of institutions. In June 2024, Core launched its first yield-bearing Bitcoin exchange-traded product (ETP), providing investors with the opportunity to earn returns through non-custodial Bitcoin staking. In collaboration with DeFi Technologies' subsidiary Valour, this ETP offers investors a yield of 5.65%, becoming an important avenue for institutional investors to enter the BTCFi ecosystem.
In addition, Core has established strategic partnerships with several custody service providers such as Fireblocks, Copper, Cactus, and Hashnote. These companies are important service providers participating in Core dual staking. One of the main reasons these custodians have become key competitive areas for Bitcoin staking protocols and second layers is that most Bitcoin holders prefer to manage their assets through trusted custodial service providers. These service providers typically offer zero-risk, stable return solutions, which is their primary consideration. Now, these service providers together have become the institutional force unlocking BTC's potential for Core.
Notably, after the successful Bitcoin strategy of MicroStrategy, many publicly listed companies have followed suit by purchasing Bitcoin and other crypto assets. Meanwhile, the publicly listed company DeFi Technologies announced in November the launch of a strategy called CoreFi, further enhancing Core's appeal among institutional investors. The inspiration for the CoreFi strategy comes from the successful experiences of MicroStrategy and Metaplanet. The CoreFi strategy provides investors with a regulated investment approach to gain leveraged exposure to Bitcoin and CORE returns, giving investors high Beta exposure to Bitcoin and BTCFi.
On December 9, the Core Foundation announced a partnership with BitGo, making BitGo the first custodian to support user participation in Core's 'dual staking.' This collaboration marks a further breakthrough for Core in terms of institutional adoption.
Through the Fusion upgrade, Core not only enhances the scalability and flexibility of the Bitcoin decentralized finance ecosystem but also provides more earning opportunities for Bitcoin holders and institutions. The introduction of dual staking and LstBTC solidifies Core's position in the BTCFi space.
In the future, with the launch of more innovative features and the growth of market demand, Core is expected to play a more significant role in the Bitcoin ecosystem, becoming a bridge connecting Bitcoin holders and BTCFi. For investors, Core's innovations bring new vitality to the market.
