In a significant development for the cryptocurrency ecosystem, BitGo has integrated institutional-grade Bitcoin staking through the layer-1 blockchain platform Core DAO. This partnership enables clients to earn scalable Bitcoin yields while retaining full custody of their assets.
What is Bitcoin Staking?
Bitcoin staking is a process that allows crypto holders to earn passive rewards for holding their assets by locking them in wallets. Although staking is natively supported on proof-of-stake (PoS) blockchains, such as Ethereum, Bitcoin operates on a proof-of-work (PoW) consensus mechanism. However, there are methods to stake BTC indirectly.
Methods of Staking Bitcoin
According to HashKey, there are at least four methods of BTC staking:
- Custodial Lending: This involves lending BTC through a custodian or exchange.
- Wrapped BTC and DeFi Lending: Users wrap their BTC in a decentralized finance (DeFi) protocol and earn interest on the wrapped tokens.
- Bitcoin Layer-2 Staking: This method allows users to stake BTC on a layer-2 scaling solution, which enables faster transaction processing.
- Restaking: A user stakes their BTC with an intermediary protocol, which then restakes it with external client chains.
Core’s Self-Custodial Bitcoin Staking
Core DAO offers non-custodial Bitcoin staking, where users lock their BTC on the Bitcoin blockchain to provide security to the Core blockchain in exchange for CORE tokens. This approach is known as self-custodial staking.
Dual Staking with BitGo and Core
BitGo’s integration of Core’s dual staking model enables institutional clients to secure extra Bitcoin staking rewards. Dual staking grants higher BTC staking rates to those who also stake CORE tokens.
According to Rich Rines, a founding contributor to Core DAO:
"With dual staking, we’ve kind of stepped it up to the next level, where now you can go put your Bitcoin to work, and you can earn even more attractive deals than some of the DeFi opportunities in terms of these Bitcoin ecosystems."
Benefits of BitGo’s Integration with Core
BitGo’s integration offers several benefits, including:
- Scalable Yield: Clients can unlock tiered yield without incurring risks on their principal assets.
- Security: Institutional clients can secure extra Bitcoin staking rewards while maintaining control over their assets.
Core DAO Surpasses $1 Billion in Total Value Locked
The news of BitGo’s integration with Core comes shortly after Core DAO surpassed $1 billion in total value locked (TVL) on December 5, 2024. The majority of the assets contributing to this milestone are primarily Bitcoin-based DeFi protocols.
Conclusion
BitGo’s partnership with Core DAO expands institutional-grade Bitcoin staking opportunities while ensuring security and control over assets. This integration highlights the growing demand for scalable yield in the cryptocurrency ecosystem.
By understanding the mechanics of Bitcoin staking, investors can make informed decisions about their investment strategies.
Learn More About Bitcoin Staking
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