People are still seeking the optimal solution that can fully inherit the security of Bitcoin while also building a decentralized financial ecosystem for Bitcoin (BTCFi). This article will introduce the BTCFi solution provided by the public chain Core.
What is Core Chain?
Can it become the optimal solution for BTCFi?
Core Chain’s consensus mechanism is based on Bitcoin’s PoW
Bitcoin Staking will be launched in Q2 2024
Introducing stCORE to establish BTC DeFi
Core team and background
Core token CORE
Conclusion
Bitcoin recently celebrated its 15th “birthday” this year, and its fourth halving, which marks the mining reward reduction, is imminent. 92% of the total supply of 21 million tokens has already been mined. At this historical moment, applications such as inscriptions and Bitcoin NFTs have exploded in the market in the past six months. The heat of the Bitcoin smart contract ecosystem, represented by Stacks, has also been reignited. For the current Bitcoin, DeFi is the most lacking but also the most imaginative aspect.
Core Chain is an EVM-compatible Layer 1 blockchain driven by Bitcoin. “Bitcoin-driven” is the key for Core Chain to inherit the security of the Bitcoin network, which is reflected in Core Chain’s consensus mechanism.
Core Chain’s consensus mechanism combines Bitcoin’s PoW. Specifically, Core’s 21 validating nodes are selected through a hybrid scoring system, which includes the size of Bitcoin mining power staked on the validating nodes and the amount of staked native token CORE on Core Chain. In the future, Bitcoin staking is also planned to be one of the scoring criteria for nodes.
As a newcomer in the BTCFi field, whether Core Chain can become the optimal solution is yet to be verified by the market. However, its adoption of Bitcoin’s PoW consensus mechanism and the upcoming Bitcoin Staking undoubtedly provide strong support for its security and decentralization features.
The biggest difference between Core Chain and other current Bitcoin ecosystem projects lies in Core Chain’s direct use of Bitcoin’s PoW for its consensus mechanism. Bitcoin’s PoW consensus is currently the most secure and decentralized accounting mechanism verified over time.
Therefore, Core Chain incorporates Bitcoin’s PoW mechanism into its consensus, which provides a secure “protective shell” for Core Chain while ensuring the security and decentralization of Bitcoin.
For Bitcoin miners, Core Chain’s consensus mechanism also provides an option to earn profits without increasing additional energy and time costs, which offers diversified income possibilities for miners amid the continuous reduction of Bitcoin rewards. According to the official website of Core Chain, the computing power of the validating nodes staked on Core Chain is 218.32 EH/s, accounting for 35% of Bitcoin’s total computing power of 611.3 EH/s. This number even reached 40% in August 2023. Major exchanges such as Huobi, OKX, and Bitget have joined Core Chain as validating nodes, jointly ensuring its secure operation.
Building on the foundation of Bitcoin’s PoW, Core Chain will introduce Bitcoin Staking in its consensus mechanism in Q2 this year. In other words, the validation node scoring on Core Chain will include three weighted factors: Bitcoin mining power, staked CORE tokens, and staked Bitcoin.
Bitcoin is currently the highest market value and most consensus-strong crypto asset. The introduction of Bitcoin Staking by Core Chain, combined with the underlying use of Bitcoin’s PoW to maintain the decentralization and security of the public chain, has great potential to fully open the prosperity of BTCFi.
For Bitcoin holders/investors, the new Bitcoin Staking feature of Core Chain will also be a new and competitive investment option. The Bitcoin Staking process on Core Chain is non-custodial, which is safer compared to some centralized custodial institutions.
The participation of Bitcoin Stakers will fully usher in a BTC 2.0 era, allowing Bitcoin Stakers, Bitcoin mining power stakers, and CORE stakers to continuously earn profits, forming a mutually positive economic cycle.
With this, the introduction to the Core consensus mechanism is complete. Core is a public chain that is both EVM-compatible and fully inherits the security of Bitcoin, providing the conditions for developing Bitcoin DeFi and offering infrastructure for existing DeFi projects to migrate to Core and build the Bitcoin DeFi ecosystem together.
Among the current DeFi field, liquidity staking has the highest TVL (Total Value Locked) ratio. It is simpler and can also enhance the utility of tokens compared to more complex DeFi activities. Therefore, Core’s initial exploration of Bitcoin DeFi focuses on liquidity staking strategies. Core recently announced the launch of the liquidity staking token stCORE to solve the problem of inability to trade tokens after staking CORE.
Users who stake CORE will receive an equivalent amount of liquidity staking token stCORE. stCORE can be traded, sold, or used in other DeFi protocols while CORE is staked on Core. This enhances user liquidity.
In addition, Core’s 2024 Bitcoin Staking roadmap shows that it will also launch Wrapped BTC minting and locking on Core, Bitcoin staking on Core, and incentives for Wrapped BTC to enhance the utility of Bitcoin on Core Chain.
To further understand Core, it is necessary to understand the team and organization behind it. L1 public chain Core is operated by the decentralized organization Core DAO, which currently has over 45 members worldwide. Among them, core contributor Rich Rines has three years of experience at Coinbase and is the chief engineer responsible for fund flow. Other team members also come from well-known large institutions and hold high positions, including Blockchain.com, MoonPay, BNB Chain, etc.
The strong background of the Core DAO contributor team and their operational effectiveness are also reflected through social media data. Core DAO has surpassed 2.1 million followers on the X (formerly Twitter) platform, and its Discord community has more than 250,000 members, indicating a large community base.
The token CORE is the utility and governance token of Core Chain, used to pay gas fees for transactions, stake on the Core network, and participate in network governance. It was launched in February 2023 with a total supply of 2.1 billion tokens. The token’s economic model includes the following distribution of the total supply:
– 39.995% (approximately 840 million tokens) for node mining rewards
– 25.029% (approximately 525 million tokens) for user rewards
– 15% (approximately 315 million tokens) distributed to project contributors
– 10% (approximately 210 million tokens) for reserves
– 9.5% (approximately 200 million tokens) allocated to the treasury to support the development of the Core Chain ecosystem
– 0.476% (approximately 10 million tokens) for relay node rewards
In the above distribution model, it can be seen that the most tokens are allocated to node mining, and the 39.995% node rewards will be distributed over approximately 81 years, with block rewards decreasing by 3.6% per year.
The various features of Core Chain revolve around building the BTCFi ecosystem, including its innovative consensus mechanism that combines PoW, a large user base, and EVM compatibility. In 2024, Core will use these features to complement and improve the Bitcoin DeFi ecosystem. At the same time, Bitcoin’s robust network and high security will support the stable and secure operation of Core Chain, mutually reinforcing and evolving together.