As a Bitcoin re-pledging protocol, the goal of the Chakra protocol is to establish a secure Bitcoin proof-of-stake system, enable liquidity for long-term Bitcoin assets, and provide decentralized services maintained by asset holders. This article is sourced from the official Chakra website and compiled, organized, and written by TechFlow.
Table of Contents:
How Chakra Works
Self-custody Pledging
ZK-based Pledge Proof
Re-pledging Service
Applications of Chakra
Guiding the New Bitcoin Second Layer
Bringing Various Benefits to Pledgers
With the market rebound, Bitcoin’s current market value has once again surpassed $1 trillion, positioning itself as a form of digital gold. However, at present, it mostly remains an idle asset.
Most Bitcoin is stored in users’ cold wallets and various exchanges around the world, rather than actively participating in the blockchain network or generating benefits for holders. Therefore, the potential of Bitcoin far exceeds its current usage and application scope.
The goal of the Chakra protocol is to establish a secure Bitcoin proof-of-stake system, enable liquidity for long-term Bitcoin assets, and provide decentralized services maintained by asset holders. As a Bitcoin re-pledging protocol, it aims to leverage the most powerful blockchain network to secure new chains and applications, using front-end zero-knowledge proof technology to unlock the economic potential for Bitcoin holders.
The challenge is obvious. Bitcoin holders desire to benefit from pledge earnings while not compromising the security of their Bitcoin.
How Chakra Works
Chakra steps up to solve this problem. Through the Chakra protocol, Bitcoin holders can enjoy multiple benefits without worrying about the security of re-pledging. What makes the Chakra protocol unique in terms of Bitcoin re-pledging?
Self-custody Pledging
Bitcoin enthusiasts trust Bitcoin because of its highly decentralized nature and strong security. Therefore, compromising security for pledge earnings may be a major concern.
Our solution allows Bitcoin holders to pledge without transferring assets out of their own wallets. This is achieved through the use of time-locked scripts, ensuring no involvement of third-party risks.
ZK-based Pledge Proof
In our solution, the pledging event of Bitcoin is proven through zero-knowledge proofs, which can be verified off-chain to access on-chain information without connecting to the Bitcoin network.
We will use STARK to implement the proof system. Compared to SNARK, STARK provides a zero-knowledge proof solution without the need for trusted setups, while ensuring enhanced security.
Re-pledging Service
Pledge proofs can be verified in various places, granting pledgers multiple rights and providing a range of services maintained by pledgers. Each right or service can be customized to meet specific needs, such as AI, DeFi, gaming, etc., all guaranteed by Bitcoin holders.
Bitcoin holders only need to pledge once, and then they are authorized to expand their Bitcoin in many ways.
Applications of Chakra
The Chakra protocol supports various Bitcoin applications, leveraging Bitcoin’s strong security while unlocking liquidity for Bitcoin assets.
Guiding the New Bitcoin Second Layer
Pledge proofs can be verified on the Bitcoin second layer, allowing pledgers to participate in the consensus and governance of the second layer. These second layers share the security of Bitcoin and provide data availability services and execution environments maintained by pledgers. For example, we can launch a Bitcoin Layer 2 maintained by pledgers and execute it with Cairo VM.
Bringing Various Benefits to Pledgers
Pledge proofs can be used to create derivatives of Bitcoin assets, providing opportunities for users to use Bitcoin-backed assets in DeFi protocols. For example, similar to stETH in the Ethereum ecosystem, we can utilize the Chakra protocol to issue stBTC and build interacting DApps with it.
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