BTCFi’s leading project Core completes Fusion upgrade: an article explaining the changes and market opportunities in detail

Author: Weilin, PANews

In the Bitcoin decentralized finance (BTCFi) ecosystem, Core is an L1 blockchain driven by Bitcoin and compatible with EVM. The verification node is simultaneously maintained by miners, Bitcoin pledges, and Core native token pledges to maintain its security. sex. Core, with its innovative Satoshi Plus consensus that combines Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS), is providing long-term and robust earnings opportunities for Bitcoin holders.

Currently, approximately 75% of the world's Bitcoin mining hash power has been contributed to Core's model through DPoW, and through non-custodial Bitcoin staking, more than 9,000 Bitcoins have participated in its pledge. Core is unlocking the potential of Bitcoin to become the primary protector and core asset of decentralized finance in the future.

On November 19, Core completed the Fusion upgrade and introduced two innovative products: Core Double Collateral and Core LstBTC. This article will provide an in-depth analysis of the important changes in this upgrade and explore the adoption trends of BTCFi by institutions.

Go deep into the Bitcoin community and innovatively launch the Satoshi

Plus consensus

The foundation of Core is its innovative Satoshi Plus consensus mechanism. Among them, the DPoW mechanism allows Bitcoin miners to settle the hash power on the Bitcoin main network through syntax such as OP_Return and entrust it to the preferred verification node to earn CORE tokens. Coin rewards. In this way, Core not only obtains the protection of Bitcoin miners, but also improves the miners' profits. Especially in the context of the reduction of Bitcoin block rewards, Core's block rewards supplement the reward vacancy after the halving.

On the other hand, the Delegated Proof of Stake (DPoS) in the Satoshi Plus consensus allows CORE token holders to support network security by delegating CORE to verification nodes. Thereby participating in the election of these validators and receiving CORE token rewards for ensuring the chain. The key to this mechanism is the "mixed score", which selects the top 27 validators by calculating the delegation hash and delegation shares, and updates them every 24 hours to ensure the decentralization and stability of the network.

The third important component of the Satoshi Plus consensus is non-custodial Bitcoin staking. Since its launch in April 2024, the delegation volume of Core blockchain validators once exceeded 9,000 Bitcoins. The approach centers around absolute timelocks, a Bitcoin-native feature that allows holders to lock their Bitcoins for a predefined period of time, during which they cannot be spent. While Bitcoin remains locked on the Bitcoin blockchain, stakers delegate that Bitcoin to elect Core validators, who secure Core and are rewarded with CORE tokens. Through this process, Bitcoin holders are rewarded daily with CORE tokens without giving up custody of their assets or taking on counterparty risk.

Notably, Core has deep ties with the Bitcoin community, especially miners and Bitcoin holders. This point makes Core different from other Bitcoin L2 or sidechain projects. More than 75% of the global mining hash power provides support to the Core network through Delegated Proof of Work (DPoW), contributing computing power to verification nodes on the chain and thereby receiving security rewards. The zero-risk and no-transfer characteristics of non-custodial Bitcoin staking make many large Bitcoin holders and institutions willing to trust Core’s technology and entrust their Bitcoins to verification nodes to maintain the security of the network. Unlike other Bitcoin projects, Core pays more attention to satisfying Bitcoin holders' concerns about security and practical needs when providing them with income opportunities.

Key points of Fusion upgrade: the introduction of double collateral and

LstBTC

In January this year, the Bitcoin spot ETF was approved, and in November the results of the US election were announced. Subsequently, the cryptocurrency industry once again reached the peak of hot topics. The traditional financial world has been looking for more flexible ways to participate in Bitcoin.

Against this background, on November 19, Core further launched the Fusion upgrade. The Fusion upgrade enhances Core's BTCFi ecosystem through Core's dual pledge and LstBTC, and also provides institutions with a more efficient way to participate.

Among them, the launch of dual pledge products aims to solve the problem of community reward distribution balance that may be caused by Bitcoin pledgers locking their assets and receiving CORE token rewards through verification nodes during the non-custodial pledge process. Especially when institutions pledge a large amount of Bitcoin, the CORE rewards released will increase accordingly. Based on this background, in order to encourage Bitcoin pledgers to re-pledge the CORE rewards they receive to verification nodes, double staking increases users’ willingness to participate by providing a higher annualized rate of return (APY). Double staking is divided into four levels, and the income ratio varies according to the ratio of the amount of pledged CORE to Bitcoin. They are Base, which is 0 CORE: 1 BTC; Boost, which is 1,000 CORE: 1 BTC; Super, which is 3,000 CORE: 1 BTC; Satoshi, which is 8,000 CORE: 1 BTC. This level will get the highest profit ratio.

The basis of dual pledge operation is to further develop the non-custodial Bitcoin pledge launched in April, allowing Bitcoin pledgers to pledge CORE tokens and receive higher verification node rewards; on the other hand, it also encourages CORE Token holders can obtain higher staking rewards than a single pledge of CORE tokens by holding and staking small amounts of Bitcoin (minimum participation is 0.01 BTC). With the staking mechanism, Core has strengthened its alignment with Bitcoin, allowing many institutions to explore the possibility of Bitcoin income while maintaining the harmony between the security of the Core blockchain and the sustainability of income.

Overall, the Fusion upgrade has an important and beneficial impact on the entire Core ecosystem. Prior to the Fusion upgrade, delegated proof-of-work had attracted more than half of Bitcoin’s total computing power. However, not all hash power delegators know what to do with their CORE token rewards. Although CORE is the most useful token on the Core blockchain (used for paying gas fees, staking, and governance), miners tend not to focus on non-mining activities. The CORE token introduced in the Fusion upgrade enhances the staking utility and can incentivize miners to stake their CORE rewards to earn income from Bitcoin reserves.

Additionally, prior to the upgrade, Bitcoin stakers earned CORE tokens, which they could also stake, but CORE staking was separate from their primary Bitcoin staking interest. Rewarding Bitcoin stakers with double staking for also staking CORE tokens closes the economic value cycle and further aligns Bitcoin with CORE assets. This capability enhances the yield and security commitment of Bitcoin stakers to Core.

Before Fusion, the three components of the Satoshi Plus consensus largely operated in isolation, even though miners and Bitcoin stakers were closely linked to the Core community, but after double staking these components merged together, making all stakeholders Agree around the Core network and the CORE token.

Another key part of this upgrade is LstBTC, which allows Bitcoin stakers to maintain their liquidity in the Core DeFi ecosystem while staking BTC. Additionally, they are rewarded with CORE tokens when staking. While earning Bitcoin staking benefits, users can use their LstBTC to borrow, exchange, re-stake, and participate in other on-chain activities.

There are more than 200 projects in the ecosystem, and institutional

adoption has become a trend

As the Core network continues to develop, more and more decentralized financial projects are being built on its platform. Currently, the number of ecological projects on the Core chain has exceeded 200, including Pell Network, Solv Protocol, Avalon Finance, DeSyn Protocol, Colend, etc. The addition of these projects not only promotes the expansion of the Core ecosystem, but also provides impetus for the growth of its TVL (Total Value Locked).

In 2024, the data on the Core chain has grown significantly: as of the third quarter, its TVL has increased by 614%, and the amount of Bitcoin and CORE token pledges has increased by 85%. As of December 12, Core’s TVL has exceeded $983 million, with more than 31.5 million independent addresses on the chain and 327 million transactions completed.

Core’s innovation has attracted the attention of not only Bitcoin holders, but also institutions. In June 2024, Core launched a yield-based Bitcoin exchange-traded product (ETP) for the first time, providing investors with the opportunity to earn income through non-custodial Bitcoin staking. By partnering with Valour, a subsidiary of DeFi Technologies, this ETP provides investors with a 5.65% yield, becoming an important way for institutional investors to enter the BTCFi ecosystem.

In addition, Core has established strategic partnerships with multiple hosting service organizations such as Fireblocks, Copper, Cactus and Hashnote. These are all important service providers participating in Core's dual pledge. One of the main reasons why custodian service providers have become a key competitive area for Bitcoin staking protocols and the second layer is that most Bitcoin holders tend to use trustworthy Assets are managed by a custodian. These service providers usually provide zero-risk, stable income solutions, which is their primary consideration. Now, these service providers together become the institutional force for Core to unlock the potential of BTC.

It is worth mentioning that after the success of MicroStrategy’s Bitcoin strategy, it was imitated by a large number of listed companies to buy crypto assets such as Bitcoin. In November, the listed company DeFi Technologies announced the launch of a strategy called CoreFi, further increasing Core’s institutional investment attraction among those. The CoreFi strategy is inspired by the successful experiences of MicroStrategy and Metaplanet. The CoreFi strategy provides investors with a regulated investment method to obtain leveraged Bitcoin and CORE income, allowing investors to gain economic exposure to high-Beta Bitcoin and BTCFi.

On December 9, the Core Foundation announced a cooperation with BitGo, making BitGo the first custodian to support users in participating in Core’s “double pledge”. This collaboration marks a further breakthrough for Core in institutional adoption.

Through the Fusion upgrade, Core not only enhances the scalability and flexibility of the Bitcoin decentralized financial ecosystem, but also provides more income opportunities for Bitcoin holders and institutions. The introduction of double collateral and LstBTC makes Core's position in the BTCFi field more stable.

In the future, with the launch of more innovative features and the growth of market demand, Core is expected to play a more important role in the Bitcoin ecosystem and become a bridge connecting Bitcoin holders with BTCFi. For investors, Core's innovation brings new vitality to the market.