Key Points
- Core Foundation has launched LstBTC, a liquid staking token that reflects Bitcoin’s value.
- LstBTC aims to address the trade-off between staking rewards and asset liquidity in the decentralized finance (DeFi) sector.
The Core Foundation, a non-profit organization focused on the expansion and evolution of the decentralized network, has unveiled LstBTC. This is a novel liquid staking token that matches the value of Bitcoin (BTC) on a 1:1 ratio.
On Thursday, September 5, it was revealed that the liquid staking token intends to tackle an enduring issue in the decentralized finance (DeFi) industry: the balance between staking rewards and asset liquidity. The fresh token, which is compatible with ERC-20 smart contracts, allows Bitcoin owners to earn rewards in CORE, Core blockchain’s native crypto, while maintaining their Bitcoin liquidity.
Introduction of Multisig Setup
This new development enables users to earn rewards while staking their BTC. Simultaneously, they can utilize the leading crypto assets for other activities, such as trading, lending, and swapping across chains for other ERC-20 tokens.
According to Rich Rines, Initial Contributor at Core, Bitcoin holders have traditionally faced a tough decision between staking their assets and keeping them liquid for participation in the DeFi ecosystem. LstBTC changes this by allowing users to earn staking rewards in Core while keeping their Bitcoin liquid and active in the ecosystem.
The organization clarified in the announcement that LstBTC would be minted on the Core blockchain with a Multisig setup on the Bitcoin network. Despite this arrangement necessitating “a modest increase in trust”, the foundation assures it is managed by reputable entities and follows standard practices adopted by many established protocols. This setup is designed to ensure the security of users’ assets while facilitating the new token’s functionality.
Boosting the BTCfi Ecosystem
The Core Foundation anticipates LstBTC to significantly improve its BTCfi ecosystem, which already encompasses a broad range of services such as lending, borrowing, restaking, decentralized exchanges (DEXs), perpetual futures, and non-fungible token (NFT) platforms.
By integrating LstBTC, the foundation aims to provide Bitcoin holders with increased flexibility in managing their assets. This new token addresses the challenge of balancing staking with liquidity, effectively bridging the gap between these two critical aspects of decentralized finance.
The organization has been actively working to expand the Core ecosystem. In July of this year, Core introduced a dual staking model to increase Bitcoin yields and establish a new market standard. This model rewards Bitcoin stakers who commit to long-term investments in Core by offering enhanced returns for those who also stake CORE.
Additionally, in April, Core launched a non-custodial BTC staking solution, making Bitcoin a yield-earning asset for the first time since its inception in 2009.
