Crypto.news recently spoke with Olivier Roussy Newton, CEO of DeFi Technologies, about the Valour Bitcoin Staking ETP, a groundbreaking product that combines Bitcoin with yield-bearing staking mechanisms.
Historically, Bitcoin holders have been unable to participate in staking opportunities available to other cryptocurrencies because Bitcoin relies on the Proof-of-Work (PoW) consensus mechanism. PoW necessitates that miners solve complex mathematical puzzles to validate transactions and secure the network.
Given the extensive scale of the Bitcoin network, a significant amount of computational power is required, which in turn consumes substantial amounts of electricity.
As an alternative, Proof-of-Stake (PoS) enables users to validate transactions based on the amount of cryptocurrency they hold and stake as collateral. In a PoS system, validators are selected according to the quantity of cryptocurrency they are willing to “stake” as collateral.
This method allows participants to earn yields simply by holding and staking their tokens. It is a more energy-efficient and accessible process compared to other consensus mechanisms.
In contrast, Bitcoin’s PoW system compensates miners with newly minted coins and transaction fees for solving complex computational puzzles. However, this reward system is restricted to those who can afford the significant costs associated with Bitcoin’s energy-intensive process.
As a result, Bitcoin holders have traditionally depended on price appreciation for returns, missing out on the yield-generation mechanisms available in PoS networks.
Recent innovations are bridging this gap by introducing methods for staking Bitcoin. For instance, blockchain networks like Core Chain are enabling Bitcoin staking through hybrid mechanisms that integrate elements of both PoW and PoS.
Core Chain’s Satoshi Plus protocol enables BTC holders to generate yields through non-custodial staking of their BTC. This approach lets users maintain control over their assets while participating in network operations to earn rewards.
This innovation provides Bitcoin holders with a way to generate passive income from their holdings without compromising the core principles of Bitcoin’s PoW-based security model.
The Valour Bitcoin Staking ETP (Exchange-Traded Product) leverages this technological advancement, offering a secure and regulated means for investors to earn staking rewards directly through Bitcoin.
Newton elaborates on how this could revolutionize the Bitcoin investment landscape.
Overview of the Valour Bitcoin Staking ETP and the Inspiration Behind Its Launch
Valour is at the forefront of regulated crypto products, making them accessible to a wide audience. They identified a significant issue with BTC products: the inability to earn yield without incurring substantial risks. Recognizing the advantages of Core Chain’s Non-Custodial BTC Staking, Valour realized it could provide its users with yield-bearing BTC without introducing any additional risk.
How Does Core Chain’s BTC Staking Program Operate? What Ensures Its Security and Efficiency?
BTC staking involves using the most valuable digital asset to secure the Core blockchain. This process leverages Bitcoin-native functionalities such as absolute time-locks to ensure that staked BTC remains on the Bitcoin chain. Users lock their BTC on the Bitcoin blockchain, use this locked BTC to vote for validators on Core Chain, and subsequently earn rewards from these validators who secure Core Chain while the BTC remains locked. Therefore, BTC secures Core Chain without ever leaving the Bitcoin chain. This BTC staking mechanism is integrated into Satoshi Plus, which serves as Core Chain’s consensus mechanism. Therefore, by participating in BTC staking with Core Chain, entities such as Valour actively contribute to the election of reliable validators responsible for creating blocks on the Core Chain network.
What Sets Apart the Valour Bitcoin Staking ETP from Other Yield-Generating Platforms Like Celsius and BlockFi?
First and foremost, maintaining a healthy dose of skepticism is crucial in the crypto space, and individuals should conduct their own research. Notably, Valour differs significantly from platforms like Celsius and BlockFi. Valour is a regulated and publicly traded company with an array of existing ETPs. Furthermore, the source of yield for their Bitcoin Staking ETP is transparent and well-defined. This yield stems from Core Chain’s Non-Custodial BTC Staking, where the BTC held by Valour remains non-custodial and never changes hands. This setup eliminates additional counterparty risks, with the only remaining risk being associated with Valour itself, similar to a non-yield-bearing Valour BTC ETP.
Bitcoin Miners’ Role in the Core Chain Network and Their Influence on Security and Rewards
Similar to how BTC stakers delegate their BTC to elect validators on Core Chain, Bitcoin miners and mining pools have the option to delegate their hash power to Core Chain for electing validators. As a reward for their contribution to Satoshi Plus, Bitcoin miners and mining pools receive CORE rewards. Given that Bitcoin miners are the decentralized guardians of Bitcoin, their participation in Core Chain enhances the decentralization of validator election and establishes alignment between Core Chain and the Bitcoin blockchain.
Enhancing Security and Efficiency for Stakers: A Deep Dive into the ‘Satoshi Plus’ Consensus Mechanism Compared to Traditional Bitcoin Proof of Work
The ‘Satoshi Plus’ consensus mechanism is a game-changer for Bitcoin stakeholders, offering tangible benefits in multiple ways. Initially, it incentivizes Bitcoin miners by rewarding them for delegating their hash power, thereby encouraging them to play an active role in securing the Bitcoin Network. Secondly, ‘Satoshi Plus’ introduces native yield to Bitcoin through BTC staking, marking a historic milestone as Bitcoin now boasts staking rewards akin to Ethereum, all while maintaining its fundamental design principles intact.
0 Comments