Core is an L1 blockchain that is powered by Bitcoin and compatible with EVM. Core inherits the security of Bitcoin, thanks to some Bitcoin miners delegating their computing power to Core’s staking nodes. These miners, by implementing Bitcoin’s PoW mechanism, not only constitute the core of Bitcoin’s true decentralization — they jointly maintain security and decentralization of the Core network on Core’s blockchain through dPOW. Core also inherits and is compatible with EVM smart contract functions, as well as the mechanism of delegated proof of stake dPOS. This means that Core has the ability to implement the long-discussed expansion and Bitcoin ecosystem issues facing Bitcoin, and also provides solutions. What is more noteworthy is that not only has more than 73% of Bitcoin miners’ computing power participated in Core’s verification nodes, many BTC holders and institutions are also actively participating in its on-chain decentralized staking nodes through non-custodial Bitcoin staking — the current total amount of non-custodial BTC staking participating in Core’s launch is approximately 7,600, which are also entrusted to Core’s on-chain verification nodes to maintain the security of its blockchain.
Core's goal is to serve as a blockchain parallel to Bitcoin and is committed to promoting ecological construction based on Bitcoin. On-chain data shows that Core has currently attracted more than 26.9 million unique addresses and 26 billion transactions. Recently, Core TVL exceeded US$646 million (as of November 6, 4 pm Beijing time). The largest contribution protocols to TVL on the Core chain mainly come from decentralized finance projects such as Colend, Pell Network, Avalon Finance, CoreX and Glyph. This article will explore important developments in the Core Network.
Colend and Solv are examples and flagship projects of how Core implements the Bitcoin ecosystem
The Core chain ecosystem focuses on decentralized financial solutions that unlock the potential value of Bitcoin. Currently, more than 200 ecological projects have been built on the chain, and Dex such as CoreX and Glyph are continuing to grow steadily in terms of data. Colend is the native lending protocol on the Core chain, and it is also one of the important applications of Core in building the BTCFi ecosystem. Users earn interest by depositing assets to Colend, and can use the deposited assets as collateral for lending to obtain higher liquidity. Solv Protocol is committed to becoming a decentralized Bitcoin reserve, providing solutions such as BTC asset fragmentation, income opportunities and compliant custody through a liquidity consensus infrastructure. Solv has received investments from Binance Labs and others. Solv provides users with the opportunity to gain BTC income potential on Core, supporting Avalon-SolvBTC.b, Colend SolvBTC.m, Colend-SolvBTC.b — the recently launched liquidity staking token based on the Core consensus mechanism SolvBTC.CORE minted 500 within 2 hours of its launch.
Currently, Colend's market size exceeds US$180 million, of which deposit assets exceed US$170 million and loan volume exceeds US$12 million. In the future, when more BTC liquidity pledge tokens are launched, the overall data will increase significantly. In addition, more diversified BTCFi ecological projects such as BTC perpetual contracts, liquidity management protocols and Quantifi have all provided positive development momentum for the Core ecosystem.
About the Satoshi Plus mechanism of the Core chain
The Core network uses a unique Satoshi Plus consensus mechanism, through a combination of Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS), node validators are responsible for generating blocks and verifying transactions on the Core network — BTC miners protect the Bitcoin network through Proof of Work (PoW), and miners delegate their hashing power to Core chain validators by embedding delegation messages in the OP_RETURN field of BTC transactions. This method of delegation does not harm miners, that is, miners will not give up the protection of Bitcoin by choosing to delegate computing power to Core. In addition, CORE token holders support network security by delegating CORE to validators. The third component of the Satoshi Plus consensus is non-custodial Bitcoin staking, which allows any Bitcoin holder to earn income by staking Bitcoin without giving up control of the asset.
In the non-custodial BTC staking mechanism, BTC pledgers do not need to rely on relayers or other protocol layers. Their operations are completely based on BTC's existing mechanisms, just like miners entrusting verification nodes to entrust BTC staking through OP_RETURN. OP_RETURN allows a small amount of data to be embedded on the Bitcoin network, so BTC pledgers and miners only need to participate on the Bitcoin network. The only difference is that the delegated miners execute OP_return in the blocks they generate, while BTC pledgers use the locked transaction OP_return. Core uses relayers to retrieve the delegation information from OP_RETURN from the Bitcoin network.
The time period for the Core network to update the node validator set and distribute rewards is currently one day. In each round, all validators will receive a mixed score, which is a comprehensive score of the above three factors (BTC miners' contribution of computing power, participation in BTC staking, and CORE token staking). The 27 validators with the highest scores will be selected into the validator set. This validator set is responsible for generating blocks for the Core network throughout the round. When the last block of each round is generated, the cumulative rewards of that round are calculated and distributed, and the validator set for the next round is determined.
From non-custodial BTC staking to dual-currency staking
Core network data shows that since the launch of non-custodial BTC staking in April this year, the amount of Bitcoin network entrusted to validators on the Core blockchain has exceeded 7,600 BTC, worth about $595 million. At the same time, the amount of CORE staked has also reached 160 million, worth about $136 million.
Core’s non-custodial BTC staking is unique in that BTC holders lock their BTC on the Bitcoin native network to provide security for the Core chain in exchange for CORE tokens without taking on counterparty risk. These rewards are primarily distributed to BTC stakers who elect the validator. Such BTC staking has “intrinsic returns,” meaning that staking rewards come directly from the staking protocol — in short, the Core chain requires BTC to be staked to ensure its security and provide node verification reward income to BTC stakers.
Currently in the overall crypto market, many institutions holding BTC are looking at more solutions to unlock the economic value of BTC. The current supply and demand dynamics result in an inverse relationship between BTC staking and returns, which is a big challenge for institutions. For example, if an institution holding billions of dollars in BTC deploys these assets, its supply will far exceed demand, which will lead to a decline in returns. In order to maintain a high level of BTC staking returns and better align BTC with CORE, Core is about to launch dual staking.
Double staking solves this economic dilemma by giving BTC stakers who also stake CORE tokens a higher BTC staking yield. Proportional yields will be awarded based on the number of CORE tokens staked. This mechanism strengthens the economic alignment between the two networks and promotes sustainable yield dynamics for BTC and CORE. By enhancing BTC’s sustainable yield, double staking accelerates the Core ecosystem’s unlocking of $1.25 trillion worth of Bitcoin liquidity value. The double staking model will further incentivize BTC stakers who invest in the Core ecosystem for the long term — BTC staking rewards will be increased when BTC and CORE are staked simultaneously. Core acts as a second block reward provider for Bitcoin. In exchange for security, Core rewards BTC stakers with CORE tokens. The introduction of double staking will provide additional security incentives for both Core and Bitcoin, while also making the economic loop between Bitcoin and Core more stable.
Since its announcement in September 2024, Core's innovative dual-staking mechanism has attracted a lot of institutional attention. Institutions are already staking Bitcoin and expect to get higher returns through dual staking.
Liquidity Staking Token stCORE
Core has introduced a liquidity certificate, stCORE, for staked CORE tokens, similar to stETH on Ethereum, which allows CORE token holders to use stCORE to participate in on-chain DeFi protocols while staking, thereby improving capital efficiency without affecting contributions to network security. Overall, holding stCORE can obtain rewards from the Core network consensus mechanism and the liquidity and combined yield of ecosystem dApps. In addition, stCORE can also achieve automatic compounding, and the redemption period is 7 days.
Recent important activities on the chain Core Ignition Drop
Core Ignition Drop is a community and developer incentive activity launched by Core in 2024. It aims to activate the on-chain ecosystem and reward community members who contribute to the ecosystem. The first season started in March 2024, and by September, more than 50,000 users had registered and more than $356 million in liquidity had participated in the ecosystem. In the second season, interactive incentives were further expanded to games and social media interactions, and a team incentive model was added to allow users to more closely reflect community-based activities.
The first thing launched in the second season is the SolvBTC.CORE incentive event jointly launched with Solv Protocol. During the event, minting SolvBTC.CORE not only earns 14 XP points from Solv, but also puts SolvBTC.CORE into the ecosystem Colend for lending, or provides liquidity to earn income on CoreX, Glyph and NLX, and can get additional on-chain interaction Sparks rewards. The SolvBTC.CORE was minted in less than two hours after the event went online.
From the design of the reward mechanism to the design of on-chain interactive activities, Core fully demonstrates its enthusiasm in building Bitcoin DeFi. For high-net-worth users, it can fully integrate on-chain developers and dApp resources, provide users with intuitive on-chain benefits, and obtain multiple incentives; however, at the community user level, it is also possible to obtain rewards through simple on-chain interactions such as social media activities and stCORE and other liquidity pledge tokens. This incentive mechanism is not only applicable to users, but also to on-chain developers. The Core Ignition incentive mechanism activates more developers to try to build projects on the Core blockchain. The data performance of user participation and interaction in the second quarter also increased by 28% in just one month, and the dApp on the chain also grew more than twice its TVL in half a year.
Core's upcoming Fusion upgrade and Core atomic swap launch
As we head into the fourth quarter, Core recently announced the first major upgrade of the mainnet since its launch. It is reported that the focus of this Fusion upgrade is the official launch of dual staking and LstBTC. After the Fusion upgrade, Core expects to bring new Bitcoin economic discussions — as a bridge between crypto finance and traditional finance, further unlocking BTC revenue and integrating the Core ecosystem with the Bitcoin network.
The upgraded double staking mechanism allows BTC holders to stake BTC to earn a basic risk-free rate, while holders who stake CORE tokens at the same time can earn a "double staking rate". Non-custodial staking has lower risk and allows users to keep BTC securely in wallets within the Bitcoin network without moving it. However, this approach makes BTC lack liquidity, preventing holders from participating in staking and DeFi activities at the same time. The Core Foundation will solve this problem by launching LstBTC, enabling users to earn Core staking rewards while keeping their BTC liquid and active in the BTCFi ecosystem, allowing BTC holders to benefit from staking and DeFi participation without being affected.
Solving the liquidity problem of pledged tokens: LstBTC launched by Fusion upgrade
LstBTC aims to preserve the value of BTC while providing new opportunities to generate yield by simply holding BTC. Each LstBTC token is pegged to the value of 1 BTC, ensuring that its value remains constant. LstBTC functions similarly to an ERC-20 compliant token, enabling holders to use it in a variety of DeFi applications. It can be used for lending, transfers, exchanges, and a range of other use cases within the ecosystem. LstBTC aims to enable BTC holders to more fully participate in the growing BTCfi ecosystem by providing a solution that bridges the gap between staking and liquidity, Core.
In addition to continuing to unlock the flexibility of the BTC economy, how to attract more institutional liquidity and multiple use cases is also the direction that the Core team continues to move forward. Core atomic swaps are one of the upcoming major developments of the Core network, which will enable trustless peer-to-peer transactions between Core and other blockchains, especially the Bitcoin network.
Unlocking more possible liquidity in the BTC economy: Core atomic swaps
Core atomic swaps are based on the HTLC principle. HTLC stands for Hashed Timelock Contract, which combines cryptographic hash functions and time lock mechanisms to ensure that both parties can access or cannot access each other's funds. Specifically, the HTLC method allows both parties to lock assets on their respective blockchains and set a hash of a key as the unlocking condition. If one party fails to reveal the key within the specified time, the other party reserves the right to withdraw its locked assets, thereby ensuring the safety of funds.
The advantage of Core atomic swaps lies in their simplicity and security, and without relying on centralized institutions, oracles or relayers, it can achieve completely trustless asset exchanges between the Bitcoin network and Core or other EVM-compatible blockchains, and transaction liquidity depends on the consensus of the interactors - reflecting complete decentralization. More importantly, Core atomic swaps can also be extended to other asset types, such as ERC20, BRC20, NFTs, and Ordinals, making interoperability and liquidity access between different asset protocols on different blockchains more convenient.
In addition, Core Atomic Swap will launch an automated market-making protocol in the future to improve transaction efficiency and user experience. The system can continuously monitor and match orders from different blockchain networks. When a matching order is detected, the HTLC process is automatically started to ensure the safe exchange of assets. This process can not only expand the application scope of Core Atomic Swap, but also make the trading experience closer to DEX or traditional trading forms through simplified order matching and instant settlement functions, while retaining the advantages of decentralization and trustlessness. Market makers can also make profits by charging transaction fees in this process, further incentivizing liquidity provision and market participation.
The Core Foundation is committed to continuously unlocking BTC’s potential value of more than $150 million
Core positions itself at the forefront of blockchain innovation, attracting the attention of community users since its launch in 2023, and has attracted millions of Core adopters — more than 26.9 million unique addresses, more than 279 million transactions, and more than 690 million TVL. As of October 2024, more than 7,600 BTC (worth more than $595 million) have been staked to Core, and approximately 73% of Bitcoin mining hash power has contributed to the security of the Core network. By providing a solution that bridges the gap between staking and liquidity, Core enables BTC holders to more fully participate in the evolving BTCfi ecosystem.
In unlocking the value of BTC, Core made its first foray into yield-based Bitcoin exchange-traded products (ETPs) in June 2024. The first such product was launched at the Frankfurt Stock Exchange by Valour, a subsidiary of DeFi Technologies. This ETP offers a 5.65% yield through non-custodial BTC staking, providing investors with another way to earn income from holding Bitcoin. In addition, custodial service providers such as Fireblocks and Copper also participate in Core's non-custodial BTC staking and dual staking, becoming strategic partners in unlocking the potential value of BTC.
The broad prospects of cryptocurrency ETFs are global, and people are increasingly interested in digital assets, but the regulatory framework has not yet fully adapted to such products. Rich Rines, an early contributor to Core, said, "Core's goal is to launch an ETF in the United States within five years so that more people can hold digital currency derivatives." This shows that the Core Foundation continues to work hard for the future of Bitcoin finance.
