LstBTC
LstBTC will allow users to earn staking rewards while retaining their Bitcoin's liquidity. Core Foundation

KEY POINTS

  • Every LstBTC token is fully pegged to one Bitcoin, ensuring its value stability
  • The LstBTC token bridges the gap between staking and liquidity in Bitcoin
  • The new token features a Multisig wallet setup to ensure enhanced security

The Core Foundation, a group dedicated to sponsoring ecosystem development on Core's Bitcoin-powered blockchain, has announced LstBTC, an ERC-20 liquid staking token pegged 1:1 with Bitcoin (BTC), the world's top cryptocurrency by market value.

LstBTC enables Bitcoin holders to earn daily rewards in CORE, the native token of the Core blockchain, while maintaining the liquidity of their Bitcoin – a solution to the longstanding challenge of choosing between staking and liquidity in the DeFi space.

The token's launch comes as South Korea holds the Korea Blockchain Week (KBW), an annual global blockchain and Web3 festival that gathers top industry enthusiasts and experts.

How Does the LstBTC Work?

Since every LstBTC token is fully pegged to one Bitcoin, its value remains stable. LstBTC allows holders to retain full liquidity, meaning their BTC can still be used for various transactions such as lending, transferring, and swapping, as with other ERC-20 tokens. Such benefits are not present with standard staking.

With the flexibility offered by LstBTC, Bitcoin holders can have a game-changing experience in terms of maximizing their returns without compromising their ability to fully engage in the DeFi space.

Addressing the Bitcoin Liquidity Challenge

Liquidity has always been a crippling issue for Bitcoin holders. In traditional BTC staking, assets are often required to be locked up, making them unavailable for other potential uses.

With the Core Foundation's LstBTC, holders now have a solution. The token eliminates the trade-off by preserving Bitcoin's value while also offering staking benefits. Holders now have the opportunity to retain their assets' liquidity and participate fully in the evolving BTCfi ecosystem.

"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," Rich Rines, Initial Contributor at Core, said in a press release shared with International Business Times.

A Multisig Setup for Enhanced Security

Security has become a major issue for many crypto holders in recent years due to the prevalence of security breaches and incidents that resulted in millions of losses. LstBTC is issued on the Core blockchain and features a Multisig setup on the Bitcoin network. The Multisig setup requires "a slight increase in trust," but since it is managed by reputable entities and many established protocols implement this practice, holders can rest assured their assets are secure.

Notably, the Multisig wallets go through rigorous security audits to ensure that user assets are well-protected, while still allowing them to benefit from the liquidity and rewards offered by LstBTC.

The Core Chain takes pride in its prioritization of security. The network was designed to thwart consensus attacks through incentive structures that provide rewards for participants that identify malicious nodes.

Bridging the Staking and Liquidity Gap to Expand the BTCfi Ecosystem

Core sees the LstBTC as an expansion driver for the blockchain's already comprehensive BTCfi ecosystem, which includes a wide range of offerings, including lending, borrowing, restaking, DEXs, perpetual futures, and non-fungible token (NFT) platforms. By offering Bitcoin holders greater flexibility in managing their assets, LstBTC is bridging the gap between staking and liquidity.

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