The new development allows users to earn rewards while staking their BTC and, at the same time, use the leading crypto assets for other activities, including trading, lending, and swapping across chains for other ERC-20 tokens.
Core Foundation, a non-profit organization dedicated to the growth and development of the decentralized network, has introduced LstBTC, a new liquid staking token that mirrors the value of Bitcoin (BTC) on a 1:1 basis.
According to an announcement on Thursday, September 5, the liquid staking token aims to solve an age-old challenge in the world of decentralized finance (DeFi) economy: the trade-off between staking rewards and asset liquidity. The new token, compatible with ERC-20 smart contracts, allows Bitcoin holders to earn rewards in CORE, the native crypto of the Core blockchain, while retaining the liquidity of their Bitcoin.
Secure Multisig Setup
The new development allows users to earn rewards while staking their BTC and, at the same time, use the leading crypto assets for other activities, including trading, lending, and swapping across chains for other ERC-20 tokens.
“Bitcoin holders have long faced a difficult choice between staking their assets and keeping them liquid for participation in the DeFi ecosystem. LstBTC changes that by allowing users to earn staking rewards in Core while keeping their Bitcoin liquid and active in the ecosystem,” said Rich Rines, Initial Contributor at Core.
In the announcement, the organization explained that LstBTC will be minted on the Core blockchain with a Multisig setup on the Bitcoin network. Although this arrangement requires “a modest increase in trust,” the foundation assures that 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 functionality of the new token.
Enhancing the BTCfi Ecosystem
Core Foundation expects LstBTC to significantly enhance its BTCfi ecosystem, which already includes a wide 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 offer Bitcoin holders 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. Earlier this year, in July, 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.
Furthermore, Core launched a non-custodial BTC staking solution in April, making Bitcoin a yield-earning asset for the first time since its inception in 2009.
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