Author: Weilin, PANews
In the decentralized finance (BTCFi) ecosystem of Bitcoin, Core is a Bitcoin-driven, EVM-compatible L1 blockchain, with its security maintained by miners, Bitcoin staking, and the staking of Core's native tokens. With its innovative Satoshi Plus consensus, combining delegated proof of work (DPoW) and delegated proof of stake (DPoS), Core is providing long-term and robust earning opportunities for Bitcoin holders.
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 non-custodial staking. Core is unlocking Bitcoin's potential, positioning it as a key protector and core asset of future 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 integrated into the Bitcoin community, innovatively launching the Satoshi Plus consensus
Core's foundation is its innovative Satoshi Plus consensus mechanism, where the DPoW mechanism allows Bitcoin miners to settle hash power on the Bitcoin mainnet through a syntax like OP_Return and delegate it to preferred validation nodes to earn CORE token rewards. In this way, Core not only receives protection from Bitcoin miners but also enhances miners' earnings, especially against the backdrop of reduced Bitcoin block rewards, where Core's block rewards supplement the gap after halving.
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, earning 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 hashes and delegated stakes, updating 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 delegated volume of Core blockchain validators has exceeded 9,000 Bitcoins. This method centers around absolute time locks, a local Bitcoin feature 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 CORE token rewards daily without relinquishing custody of their assets or assuming counterparty risks.
It is noteworthy that Core has deep connections with the Bitcoin community, especially miners and Bitcoin holders. This differentiates Core from other Bitcoin L2 or sidechain projects. Over 75% of the global mining hash power supports the Core network through delegated proof of work (DPoW), contributing computational power to validation nodes on-chain, thus earning security rewards. The zero-risk characteristic of non-custodial Bitcoin staking, without the need to transfer assets, has led many large Bitcoin holders and institutions to trust Core's technology and delegate their Bitcoin to validation nodes, maintaining network security. Unlike other Bitcoin projects, Core places greater emphasis on meeting Bitcoin holders' concerns regarding security and actual needs when providing earning opportunities.
Key points of the Fusion upgrade: dual staking and the introduction of LstBTC
In January this year, the approval of the Bitcoin spot ETF and the results of the U.S. elections in November led to the cryptocurrency industry once again reaching a peak of interest. The traditional financial sector has been looking for 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, also providing institutions with a more efficient way to participate.
The introduction of dual staking products aims to address the balance of community rewards that may arise when Bitcoin stakers lock their assets and earn CORE token rewards through validation nodes. Especially in cases where institutions stake 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 back to validation nodes, dual staking enhances user participation willingness by offering higher annual percentage yields (APY). Dual staking is divided into four tiers, with reward ratios varying based on the ratio of staked CORE to Bitcoin. They 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 this tier receiving the highest reward ratio.
The foundation of dual staking is to further develop the non-custodial Bitcoin staking launched in April, allowing Bitcoin stakers to additionally stake CORE tokens and receive higher rewards from validation nodes; on the other hand, it also incentivizes CORE token holders to earn higher staking rewards by holding and staking small amounts of Bitcoin (with a minimum participation of 0.01 BTC) than by staking CORE tokens alone. With this staking mechanism, Core has further strengthened its alignment with Bitcoin, allowing many institutions to explore the earning possibilities of Bitcoin while also maintaining the security of the Core blockchain and ensuring the sustainability of earnings.
Overall, the Fusion upgrade has a significant and beneficial 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 are clear on how to handle their CORE token rewards. Although CORE is the most useful token on the Core blockchain (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 enhanced the utility of staking, which can incentivize miners to stake their CORE rewards to earn returns from Bitcoin reserves.
Moreover, before the upgrade, Bitcoin stakers earned CORE tokens, which they could also stake, but CORE staking is independent of their main Bitcoin staking interests. By dual staking, Bitcoin stakers can also stake CORE tokens, closing the economic value loop and further aligning Bitcoin with CORE assets. This capability enhances Bitcoin stakers' commitment to Core's earnings and security.
Before Fusion, the three components of the Satoshi Plus consensus operated largely in isolation. Even though miners and Bitcoin stakers were closely connected with the Core community, after dual staking, these components integrated, aligning all stakeholders around the Core network and CORE tokens.
Another key component of this upgrade is LstBTC, allowing Bitcoin stakers to maintain their liquidity within the Core DeFi ecosystem while staking BTC. Additionally, they will receive CORE tokens as rewards during staking. While earning Bitcoin staking rewards, users can use their LstBTC for lending, exchanging, re-staking, and participating in other on-chain activities.
Over 200 projects within the ecosystem, institutional adoption becomes a trend
As the Core network continues to develop, an increasing number of 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 more. The addition of these projects not only drives the expansion of the Core ecosystem but also fuels its TVL (total value locked) growth.
In 2024, data growth on the Core chain was significant: as of the third quarter, its TVL grew by 614%, and the staking volume of Bitcoin and CORE tokens increased by 85%. By December 12, Core's TVL had 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 has also drawn 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 yields 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.
Additionally, Core has established strategic partnerships with multiple custodial service providers such as Fireblocks, Copper, Cactus, and Hashnote. These providers are important service providers participating in Core's dual staking, and the main reason custodial services have become a key competitive area in Bitcoin staking protocols and second layers is that most Bitcoin holders prefer to manage their assets through trusted custodial service providers. These providers typically offer zero-risk, stable return solutions, which is their primary consideration. Now, these service providers together form the institutional force unlocking BTC's potential for Core.
It is worth noting that after the success of MicroStrategy's Bitcoin strategy, many publicly listed companies have followed suit in purchasing Bitcoin and other crypto assets, while publicly listed company DeFi Technologies announced in November the launch of a strategy called CoreFi, further enhancing Core's appeal among institutional investors. The CoreFi strategy is inspired by the successful experiences of MicroStrategy and Metaplanet. The CoreFi strategy provides investors with a regulated investment method to gain leveraged exposure to Bitcoin and CORE, allowing investors to achieve high Beta exposure to Bitcoin and BTCFi.
On December 9, the Core Foundation announced a partnership with BitGo, making BitGo the first custodial institution to support user participation in Core's 'dual staking'. This partnership marks a further breakthrough for Core in institutional adoption.
Through the Fusion upgrade, Core not only enhances the scalability and flexibility of the decentralized finance ecosystem of Bitcoin but also provides more earning opportunities for Bitcoin holders and institutions. The introduction of dual staking and LstBTC further solidifies Core's position in the BTCFi space.
In the future, as more innovative features are launched and market demand grows, Core is expected to play an increasingly important role in the Bitcoin ecosystem, becoming a bridge connecting Bitcoin holders with BTCFi. For investors, Core's innovations bring new vitality to the market.
