Crypto.news recently spoke with Olivier Roussy Newton, CEO of DeFi Technologies, about the Valour Bitcoin Staking ETP. This innovative product merges Bitcoin with yield-bearing staking mechanisms, offering Bitcoin holders a unique opportunity to earn yields.

Staking and Bitcoin: Bridging the Gap

Bitcoin holders have traditionally been excluded from staking opportunities available to other cryptocurrencies, primarily due to Bitcoin’s reliance on the Proof-of-Work (PoW) consensus mechanism. PoW requires miners to solve complex mathematical puzzles to validate transactions and secure the network, consuming substantial computational power and electricity.

On the other hand, Proof-of-Stake (PoS) allows users to validate transactions based on the number of coins they hold and stake as collateral. This method is more energy-efficient and accessible, enabling participants to earn yields simply by holding and staking their tokens.

In contrast, Bitcoin’s PoW system rewards miners with newly minted coins and transaction fees for solving computational puzzles. This reward generation is limited to those who can afford the high expenses associated with Bitcoin mining, leaving Bitcoin holders reliant on price appreciation for returns.

Innovations in Bitcoin Staking

Recent innovations are addressing this gap by introducing ways to stake Bitcoin. For example, blockchain networks are enabling Bitcoin staking through mechanisms that combine PoW and PoS elements. One such protocol, known as Satoshi Plus, allows Bitcoin holders to earn yields by staking their BTC in a non-custodial manner, maintaining control over their assets while participating in network operations to earn rewards.

This approach provides Bitcoin holders with a means to generate passive income from their holdings without compromising the core principles of Bitcoin’s PoW-based security model.

Valour Bitcoin Staking ETP

The Valour Bitcoin Staking ETP capitalizes on these technological advancements, offering a secure and regulated avenue for investors to earn staking rewards directly through Bitcoin. According to Newton, this product could transform the Bitcoin investment landscape.

Valour is at the forefront of regulated crypto products, accessible to a broad audience. They identified that existing BTC products fail to earn yield or involve significant risks. By leveraging Core Chain’s Non-Custodial BTC Staking, Valour realized it could offer BTC with yield without introducing new risk assumptions.

How BTC Staking on Core Chain Works

BTC staking enables the most valuable digital asset to secure the Core blockchain. BTC staking utilizes Bitcoin-native functionalities like absolute time-locks to ensure that staked BTC never leaves the Bitcoin chain. Users lock their BTC on the Bitcoin blockchain, use that locked BTC to vote for validators on Core Chain, and then earn rewards from those validators securing Core Chain while their BTC remains locked. This process ensures that BTC secures Core Chain without ever leaving the Bitcoin chain.

Comparing Valour Bitcoin Staking ETP to Other Platforms

Given the challenges faced by other yield-generating platforms, skepticism is necessary in crypto. Valour distinguishes itself by being a regulated, publicly traded company with many existing ETPs. The source of the yield for Valour’s Bitcoin Staking ETP is clear: Core Chain’s Non-Custodial BTC Staking. This means the BTC held by Valour never needs to change hands, eliminating additional counterparty risk.

Bitcoin Miners and Core Chain Network

Bitcoin miners and mining pools can delegate their hash power to Core Chain to elect validators. In exchange for their participation in Satoshi Plus, they earn CORE rewards. This involvement further decentralizes validator election and aligns Core Chain with the Bitcoin blockchain, enhancing security and rewards.

Refining Bitcoin Proof of Work with Satoshi Plus

Satoshi Plus refines the traditional Bitcoin Proof of Work by incentivizing Bitcoin miners to secure the Bitcoin Network. Additionally, it introduces native yield to Bitcoin for the first time, allowing Bitcoin to have staking rewards similar to Ethereum without compromising its design principles.

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