Core Foundation pioneers Liquid Staking Token LstBTC, Enabling DeFi on Bitcoin
In a groundbreaking move, the Core Foundation has unveiled the Liquid Staking Token, LstBTC, on the Bitcoin-supported Layer 2 “Core” network. This ERC-20 token will be linked 1:1 with BTC, providing daily rewards to holders in CORE tokens.
Rich Rines, an early contributor to Core DAO, lauds the introduction of LstBTC as a revolutionary development in the Bitcoin DeFi realm. The token is anticipated to draw new creators to the Core ecosystem and set the stage for the emergence of further liquid staking tokens on Core.
Core, a Bitcoin sidechain compatible with EVM, employs merge mining and delegated proof of stake for network security, employing a consensus method named “Satoshi Plus.” This innovative strategy enables Core to offer more functionality than conventional Bitcoin L1.
With liquid staking, BTC holders can now stake their assets independently on platforms like Core, generating steady yields without the requirement to lock up their assets. This shift represents a notable departure from conventional staking methodologies.
While liquid staking brings many benefits, it also carries certain risks linked to the need for trust assumptions in asset management. Notwithstanding, Core DAO stresses that stringent security evaluations have been carried out to safeguard user assets and ensure the security of LstBTC.
The introduction of liquid staking tokens like LstBTC demonstrates the expanding DeFi landscape on Bitcoin. Other networks such as the Stacks Bitcoin L2 have also introduced similar tokens like BTCz, which appreciate in value over time in tandem with the BTC backing.
As the DeFi sector progresses, liquid staking tokens offer BTC holders a fresh avenue to generate passive income while maintaining asset flexibility. The debut of LstBTC and comparable tokens marks a significant advancement in bringing DeFi functionalities to the Bitcoin ecosystem.
