Author: Weilin, PANews
In the Bitcoin decentralized finance (BTCFi) ecosystem, Core is a Bitcoin-driven, EVM-compatible L1 blockchain, with verification nodes maintained by miners, Bitcoin staking, and Core native token staking to maintain their security. Core, with its innovative Satoshi Plus consensus, combines Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS), providing Bitcoin holders with long-term and robust income opportunities.
Currently, about 75% of the world's Bitcoin mining hash power has been contributed to Core's model through DPoW, and more than 9,000 Bitcoins have participated in its staking through non-custodial Bitcoin staking. Core is unlocking the potential of Bitcoin and making it the main protector and core asset of decentralized finance in the future.
On November 19, Core completed the Fusion upgrade, introducing two innovative products: Core dual staking and Core LstBTC. This article will delve into the significant changes brought by this upgrade and explore the trend of institutional adoption of BTCFi.
Delving into the Bitcoin community, innovatively launching the Satoshi Plus consensus.
Core's foundation lies in 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 verification nodes to earn CORE token rewards. Through this approach, Core not only gains protection from Bitcoin miners but also enhances miners' profits, particularly in the context of reduced Bitcoin block rewards, where 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 CORE to verification nodes. This enables participation in the election of these validators and earns CORE token rewards for securing the chain. The key mechanism is the 'mixed score', which selects the top 27 validators by calculating delegated hashes and delegated shares, updating every 24 hours to ensure 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 amount by Core blockchain validators has exceeded 9,000 Bitcoins. This method centers around an absolute time lock, a local Bitcoin feature that allows holders to lock their Bitcoin for a predefined period during which it cannot be consumed. While Bitcoin remains locked on the Bitcoin blockchain, stakers delegate that Bitcoin to elect Core validators, who secure Core and earn CORE token rewards. Through this process, Bitcoin holders earn CORE token rewards daily without relinquishing custody of their assets or incurring counterparty risk.
It is worth noting that Core has a deep connection with the Bitcoin community, especially miners and Bitcoin holders. This sets Core apart 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 power to the verification nodes on the chain, thereby earning security rewards. The zero-risk nature of non-custodial Bitcoin staking, which does not require asset transfer, makes many large Bitcoin holders and institutions willing to trust Core's technology and delegate their Bitcoin to verification nodes, maintaining network security. Unlike other Bitcoin projects, Core places greater emphasis on meeting Bitcoin holders' concerns about safety and practical needs when providing yield opportunities.
Key points of the Fusion upgrade: The introduction of dual staking and LstBTC.
In January of this year, the Bitcoin spot ETF was approved, and in November, the results of the U.S. elections were announced. Subsequently, the cryptocurrency industry once again reached a peak of interest. The traditional financial sector has been seeking more flexible ways to participate in Bitcoin.
Against this backdrop, on November 19, Core further launched the Fusion upgrade. The Fusion upgrade enhances Core's BTCFi ecosystem through dual staking and LstBTC, providing institutions with more efficient participation pathways.
Among them, the launch of the dual staking product aims to address the balance of community reward distribution issues that may arise when Bitcoin stakers lock their assets during the non-custodial staking process and receive CORE token rewards through verification nodes. Especially in cases where institutions stake a large amount of Bitcoin, the released CORE rewards will increase accordingly. Against this background, to encourage Bitcoin stakers to re-stake the CORE rewards they receive back to verification nodes, dual staking enhances user participation willingness by offering higher annualized yield rates (APY). Dual staking is divided into four levels, with reward ratios varying based on the ratio of staked CORE to Bitcoin. They are Base, i.e., 0 CORE:1 BTC; Boost, i.e., 1,000 CORE:1 BTC; Super, i.e., 3,000 CORE:1 BTC; Satoshi, i.e., 8,000 CORE:1 BTC, with this level 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 stake CORE tokens for higher verification node rewards. On the other hand, it 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) compared to single staking of CORE tokens. Through the staking mechanism, Core strengthens its alignment with Bitcoin and allows many institutions exploring the potential of Bitcoin returns to maintain the security and sustainability of the Core blockchain.
Overall, the Fusion upgrade has had 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 power delegates were clear on how to manage 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 staking utility and can incentivize miners to stake their CORE rewards to earn returns on Bitcoin reserves.
Moreover, prior to the upgrade, Bitcoin stakers earned CORE tokens, which they could also stake, but CORE staking was independent of their primary interest in Bitcoin staking. Through dual staking, Bitcoin stakers can also stake CORE tokens, closing the economic value loop and further aligning Bitcoin with CORE assets. This ability enhances Bitcoin stakers' commitment to Core's returns and security.
Before Fusion, the three components of the Satoshi Plus consensus operated independently. Even though the connection between miners and Bitcoin stakers with the Core community was strong, these components merged after dual staking, aligning all stakeholders 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 will 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.
Over 200 projects in the ecosystem, institutional adoption has become a trend.
With the continued development of the Core network, more and more decentralized finance projects are being built on its platform. Currently, the number of ecological 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, data on the Core chain showed significant growth: as of the third quarter, its TVL grew by 614%, and the amount of Bitcoin and CORE token staking increased by 85%. As of December 12, Core's TVL has surpassed $983 million, with over 31.5 million independent addresses on the chain, completing 327 million transactions.
Core's innovations have attracted attention not only from Bitcoin holders but also from institutions. In June 2024, Core launched its first yield-generating Bitcoin exchange-traded product (ETP), providing investors with the opportunity to earn returns through non-custodial Bitcoin staking. In collaboration with Valour, a subsidiary of DeFi Technologies, this ETP offers investors a yield of 5.65%, becoming an important channel for institutional investors to enter the BTCFi ecosystem.
In addition, Core has established strategic partnerships with several custodial service providers such as Fireblocks, Copper, Cactus, and Hashnote. These companies are key service providers involved in Core's dual staking. One of the main reasons custodial service providers have become a critical 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 yield solutions, which are their primary consideration. Together, these service providers have become the institutional force unlocking BTC's potential for Core.
It is worth mentioning that after the successful Bitcoin strategy of MicroStrategy, many listed companies have followed suit by buying Bitcoin and other crypto assets. Meanwhile, listed company DeFi Technologies announced in November the launch of a strategy named CoreFi, further enhancing the appeal of Core among institutional investors. The CoreFi strategy is inspired by the successful experiences of MicroStrategy and Metaplanet. It provides investors with a regulated investment approach to obtain leveraged returns on Bitcoin and CORE, 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 partnership marks a further breakthrough for Core in institutional adoption.
Through the Fusion upgrade, Core not only enhanced the scalability and flexibility of the Bitcoin decentralized finance ecosystem but also provided more yield opportunities for Bitcoin holders and institutions. The introduction of dual staking and LstBTC solidifies Core's position in the BTCFi space.
In the future, as more innovative features are introduced 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.
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