Decentralized Finance (DeFi) has always carried a grand promise: empowering people worldwide with open, permissionless financial services that remove intermediaries and unlock new possibilities. Yet, for many users—newcomers and veterans alike—DeFi remains complex, fragmented, and risky to navigate. Enter DeFAI: the emerging fusion of DeFi and Artificial Intelligence (AI) that aims to simplify, automate, and revolutionize how we interact with Web3.

In this article, we’ll break down the DeFAI narrative: what it is, why it matters, and how it’s set to reshape the future of on-chain finance.

Read it here, or listen on [Spotify](https://open.spotify.com/episode/590Opx03oaXwq9DLVluH5A?si=UMjJxOxoRyy8SRaNtg9iAQ)  and [YouTube](https://youtu.be/XxxAwbLYmK4)!! 🎧

## 1. The DeFAI Narrative: Why Now?

Over the past few years, DeFi has soared in popularity, but also ballooned in complexity. We have multiple Layer-1 blockchains, Layer-2 scaling solutions, cross-chain bridges, Automated Market Makers (AMMs), yield farms, and the list goes on. For someone new, just getting started can feel like navigating an endless maze of protocols, services, and ever-changing interfaces.

**AI Steps In**

AI has the potential to remove a lot of these obstacles:

- **Natural Language Interfaces**: Instead of fumbling through multiple dApps, you can just say “Swap 2 ETH for USDC and stake it on [XYZ protocol].”

- **Automated Transactions**: AI-driven agents can execute on-chain actions for you—like watching prices, bridging assets, or harvesting yields—without requiring your constant attention.

- **Smarter Decision-Making**: By analyzing on-chain data and real-world events, AI can make suggestions or even autonomously trade, farm, or rebalance portfolios based on user-defined parameters.

![staking_circle_blog_defai_mini_01.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/staking_circle_blog_defai_mini_01_e391e3e8bf.png)

According to several bold predictions circulating on Crypto Twitter, DeFAI has the potential to reach a **$10B market cap**—up from below $1B today—in the coming months. Whether that happens sooner or later, the underlying point is clear: there’s growing excitement about AI-led automation in DeFi.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_c7c28c031a.png)
_"Mindshare" for DeFAI on Twitter through Kaito AI: Reflecting the overall excitement for this sub-sector ([Source](https://x.com/_kaitoai/status/1878406949630312785))_

## 2. The First Glimpse: AI Web3 “Intents”

A lot of early “AI + DeFi” projects primarily showcased something called “Web3 intents” powered by Large Language Models (LLMs). Essentially, these are user commands that get translated into on-chain transactions.

Examples of such interfaces include:

- **[Griffain](https://t.co/Mwzt1K6TK1)**: Focuses on making DeFi more intuitive with automation features like dollar cost averaging, memecoin creation, or airdrops—all orchestrated via chat-like interactions.

- **[Neus](https://t.co/YX1Dx2vhic)**: Positions itself as a “co-pilot” for the Solana ecosystem, helping with multi-step instructions using the Solana Agent Kit.

- **[HeyAnon](https://t.co/nwUszKIIXK)**: Builds AI-powered tools for bridging, swapping, and farming with simple prompts, aiming for a frictionless user experience.

These platforms demonstrate how AI can parse natural language, map it to blockchain actions, and generate transaction data for you to sign. However, they’re often still user-controlled at every step—meaning you review and authorize transactions before they occur.

Here’s an example of an Web3 intent system (HeyAnon) in action: https://x.com/danielesesta/status/1877362314510250397/video/1

## 3. Beyond Chat UIs: True DeFAI Agents

The real potential of DeFAI goes beyond chat-based prompts. A “true” AI agent, as some pioneers explain, should be capable of executing on its own within boundaries set by the user. Think of teaching a child to walk: you set certain rules (like “don’t run into the street”), but the child still decides exactly where to roam and how to navigate.

![staking_circle_blog_defai_mini_02.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/staking_circle_blog_defai_mini_02_1a38f2faa6.png)

### 3.1 Autonomous Trading Agents

**Example Use Case:**

- An agent monitors on-chain analytics for “smart money” flows or any other criteria (i.e., wallets that tend to make profitable trades).

- It buys the coin with the highest smart money volume each day.

- It decides to sell the coin when it hits a x% gain or a y% drop—rules you initially define.

- Over time, it learns from new data, refining its buy/sell thresholds or discovering better indicators.

Such an agent differs from a static trading bot: it can adapt based on the data it continuously ingests. Projects like **[Almanak](https://t.co/r7vzkpoPXi)** and **[Cod3xOrg](https://www.cod3x.org/)** are pioneering this space, creating frameworks where agents can dynamically change their strategies to optimize returns.

### 3.2 Yield Optimizing Agents

**Example Use Case:**

- A yield agent scans multiple DeFi protocols daily to find the best stablecoin yields.

- It automatically withdraws funds from a lower-earning pool and reallocates them to a higher APR pool.

- It analyzes additional factors like protocol risk, liquidity depth, and user-defined constraints (e.g., “don’t lock my funds longer than 2 weeks”).

Projects like **[Mozaic](https://mozaic.finance/)** and **[SturdyFinance](https://t.co/I0peZUwQSM)** have begun exploring AI-driven yield optimization. Meanwhile, **[Mode Network](https://t.co/haYyxurSyA)** is building a marketplace for DeFAI agents, aiming to make these advanced automated strategies available to everyday users.

## 4. The Infrastructure Layer: Verifying AI On-Chain

As AI agents gain autonomy—and potentially manage large sums of capital—security and verifiability become crucial. How can users be sure these agents won’t “hallucinate” and invest in random memecoins or get exploited?

Key innovations include:

- **Trusted Execution Environments (TEEs)**: Popularized by projects like **[Phala Network](https://t.co/QGASJnuHn3)**, TEEs ensure sensitive data is processed securely and can’t be tampered with.

- **Zero-Knowledge Machine Learning (zkML)**: Frameworks like **[Hyperbolic](https://t.co/JjtjeTyOIq)** allow AI computations to be verified cryptographically. This means you can prove an agent actually followed the agreed-upon strategy without exposing every line of its code or data.

![staking_circle_blog_defai_mini_03.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/staking_circle_blog_defai_mini_03_5d21cfc215.png)

This DeFAI infrastructure is a crucial stepping stone. As the total value locked (TVL) in AI-managed DeFi strategies grows, such verifiability will likely become a standard requirement for user trust.

Read it here, or listen on [Spotify](https://open.spotify.com/episode/590Opx03oaXwq9DLVluH5A?si=UMjJxOxoRyy8SRaNtg9iAQ)  and [YouTube](https://youtu.be/XxxAwbLYmK4)!! 🎧

## 5. AI-Powered dApps: Beyond Simple Tasks

Another frontier of DeFAI involves dApps that integrate AI at their core—going beyond superficial chat commands or trading. Some are focusing on specialized tasks like stablecoin farming (e.g., [Arma](https://t.co/mqHuqulYPN) on Mode Network) and Balancer LP optimizations (e.g., Modius by Autonolas). Others, like [Amplifi](https://t.co/Vsl386L64q) Lending Agents, are weaving AI into multi-step lending and rebalancing workflows.

Projects in L2 ecosystems, such as the Mode Network “AI + DeFi” hub, aim to host entire marketplaces of these AI-driven dApps. The idea is to create a single destination where users can pick from a variety of specialized agents that meet their needs—whether it’s yield farming, liquidity provision, or cross-chain bridging

## 6. Risks and Challenges

Despite the excitement, DeFAI isn’t a guaranteed golden ticket:

1. **AI Hallucination**: If an agent misinterprets data, it could make wildly incorrect trades. Continuous monitoring, along with robust frameworks, is essential.

2. **Security Vulnerabilities**: Granting an AI agent access to your wallet poses risks. Thorough auditing, permissioned wallets, and secure enclaves are vital.

3. **Regulatory Scrutiny**: As algorithms become more autonomous, questions arise about liability and compliance. The DeFI space already grapples with these issues, and AI could add another layer of complexity.

Still, these challenges are similar to what DeFi faced in its early days, prompting the industry to develop better standards, tooling, and safeguards. Expect the same to happen with DeFAI.

## 7. Outlook: Will DeFAI Really Hit $10B?

Some users across X (Twitter) predict a **$10B** market cap for DeFAI in the near term. While no one can guarantee timelines, the rapid influx of innovation, funding, and user interest suggests that DeFAI’s potential is significant. Even if only a fraction of DeFi’s current user base adopts AI-driven tools, the impact on user experience—and thus, growth—could be substantial.

**Key Takeaways:**

- **Infrastructure**: Various zkML solutions will be pivotal for trust.

- **Agents vs. Bots**: Intelligent agents adapt and learn, whereas bots follow static, pre-coded instructions.

- **User Experience**: Natural language interfaces and automated strategies stand to make DeFi far more accessible to newcomers.

- **Next Step**: True “set-and-forget” AI agents—capable of 24/7 on-chain execution—could drive a new wave of DeFi adoption.

## 8. Final Thoughts

DeFAI represents a shift from DeFi as a playground for highly technical users to a more inclusive system where AI manages the heavy lifting. Whether it’s bridging tokens across chains, optimizing yield strategies, or trading based on on-chain signals, AI can help remove many of the barriers that have kept DeFi inaccessible to most.

We’ve seen only the **tip of the iceberg** so far. The most exciting advances lie ahead: fully autonomous on-chain agents, robust verification layers, and specialized AI-powered dApps that tackle everything from complex derivatives to cross-chain liquidity management. If you found DeFi intriguing but overwhelming, the next wave of DeFAI innovations might just bring you into the fold—no PhD in yield farming required.

**As always, stay informed, tread carefully, and enjoy the ride**. DeFAI is a brand-new frontier, and with it comes both enormous promise and fresh challenges. One thing’s for sure: the line between DeFi and AI will only continue to blur, bringing us closer to a future where decentralized finance is as user-friendly as your favorite app—and maybe a lot smarter, too.

Could DeFAI catapult DeFi to a $10B market cap? Discover how AI-powered tools, yield-hunting agents, and verifiable execution layers might spark the next wave of growth for decentralized finance.

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Is DeFAI the Spark to Revive DeFi’s Flame?

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Welcome to Staking Circle, the premier organization for DeFi Staking Professionals. Whether you're an experienced staker or just starting your journey in the world of decentralized finance, Staking Circle is here to support and connect you with like-minded professionals, industry leaders, and exciting investment opportunities. 

Our platform provides access to exclusive analytical tools, in-depth articles including case studies, and a range of events that foster learning and networking.


Staking Circle

Quantum computing has made a significant leap with Google's announcement of the **Willow** chip. This processor showcases incredible capabilities like exponential error correction and computations beyond traditional limits. But with such power, there's a responsibility, especially for Bitcoin and other cryptocurrencies that rely on cryptographic security to safeguard billions.

Could Willow mark the beginning of the end for Bitcoin’s security, or is the blockchain community ready for a quantum revolution?

### Key Takeaways:

- Google's Willow chip advances quantum tech, potentially endangering Bitcoin's security.
- Bitcoin's current cryptography is safe, but quantum advancements could change this.
- The crypto community, including Starknet and Avalanche, is pushing for quantum-resistant solutions.
- NIST leads in developing post-quantum cryptography for broader digital security.
- Quantum computing affects more than crypto, requiring widespread quantum-proof measures.
- Significant investments in quantum computing underscore its importance and urgency.
- The blockchain must adapt; the question isn't if but when quantum computing will impact crypto.

## What is Quantum Computing?

Quantum computing represents a transformative approach to computational processing. By leveraging quantum bits (qubits) that can simultaneously exist in multiple quantum states, these systems fundamentally transcend classical computational constraints. Their potential lies in solving complex mathematical problems exponentially faster than traditional computers, with profound implications for cryptography, scientific modeling, and optimization algorithms.

To illustrate the computational paradigm shift, consider a cryptographic challenge: while classical computers would require thousands of years to factor large prime numbers, a critical operation in current encryption systems, quantum computers could potentially complete such calculations in minutes, rendering many existing security protocols vulnerable.

## The Dawn of Willow: A Quantum Milestone

Google's Willow, a 105-qubit quantum processor, represents a significant advancement in quantum computational architecture. The chip demonstrates two critical technological breakthroughs:

1. **Quantum Error Mitigation**: Willow has achieved a notable milestone in quantum error correction. As the qubit count increases, the system demonstrates exponentially reduced error rates, which is a critical development for developing stable, scalable quantum computing platforms.

2. **Computational Complexity Demonstration**: The processor successfully executed a complex computational task substantially faster than classical supercomputers, highlighting potential quantum computational advantages. While the exact comparative performance requires rigorous scientific verification, the initial results suggest transformative computational capabilities.

Following Willow's introduction, industry competitors like IBM (with its 433-qubit Osprey processor) and Microsoft's ongoing topological qubit research indicate an accelerating quantum computing ecosystem. These developments suggest we are approaching a potential inflection point in quantum technological capabilities.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_6caf47ccfb.png)
_Willow System Metrics_

## Bitcoin's Security Architecture: ECDSA and SHA-256

The cryptocurrency's security infrastructure relies on two fundamental cryptographic mechanisms:

- **ECDSA (Elliptic Curve Digital Signature Algorithm)**: A cryptographic protocol that authenticates transaction ownership by generating a unique digital signature linked to the user's private key. This mechanism ensures that only the rightful owner can authorize Bitcoin transactions.

- **SHA-256 Hashing**: A cryptographic hash function that generates a fixed-size, unique digital fingerprint for each blockchain block. This algorithm provides integrity and immutability, making unauthorized data manipulation computationally infeasible.

Quantum Computing Vulnerability Vectors:

- **Exposed Public Keys**: Blockchain transactions inherently reveal public keys, potentially enabling quantum computational techniques like Shor's algorithm to mathematically derive private keys.

- **Address Reuse Risks**: Repeated use of identical Bitcoin addresses increases cryptographic exposure, amplifying potential quantum decryption opportunities.

- **Legacy Transaction Formats**:  Early blockchain transaction models (e.g., Pay-to-Public-Key) directly displayed public keys, rendering historical transactions potentially susceptible to advanced quantum analysis.

Emerging research demonstrates controlled simulations of quantum encryption protocol breaches, signaling broader implications for digital security ecosystems beyond cryptocurrencies.

## Bitcoin's Security in the Quantum Era: A Pragmatic Overview

The quantum computing narrative surrounding Bitcoin's security is more nuanced than most tech headlines suggest. While Google's Willow chip and emerging quantum technologies spark excitement, they're not quite the cryptographic skeleton key many imagine.

Bitcoin's defense mechanisms, primarily ECDSA and SHA-256, remain robustly complex. Breaking these would require quantum processors with computational capabilities exponentially beyond current prototypes. We are talking millions more qubits than today's most advanced systems - a technological gulf that isn't closing overnight.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_987631ba5b.png)
_ECDSA & SHA-256 Specs_

Experts like **Charles Edwards** and **Ben Sigman** aren't sounding alarm bells, but they're definitely keeping a watchful eye. Their perspective? Prepare for potential disruption without falling into panic. Think of it as strategic vigilance - acknowledging the quantum horizon while understanding that Bitcoin's cryptographic fortress isn't about to crumble.

The current quantum computing landscape resembles a powerful but still-nascent technology. It's impressive, undoubtedly revolutionary, but not yet capable of unraveling Bitcoin's intricate security tapestry. Quantum processors today are more like sophisticated lock-picking apprentices trying to crack a military-grade vault - impressive potential, but far from guaranteed success.

For now, Bitcoin's core infrastructure remains secure. The cryptocurrency ecosystem continues evolving, maintaining a proactive stance that balances technological optimism with rigorous security assessment. The quantum winter might be coming, but Bitcoin isn't shivering just yet.

## Quantum Resilience: The Cryptocurrency Security Horizon

The blockchain ecosystem is actively developing strategies to fortify cryptographic defenses against potential quantum computing threats. This proactive approach isn't about immediate panic, but strategic, forward-thinking preparedness.

Emerging blockchain networks like **Starknet** and **Avalanche** are pioneering innovative security architectures. Starknet's STARK technology introduces a fundamentally different cryptographic approach, creating layers of protection that traditional methods cannot match. Avalanche's double-hash mechanism strategically minimizes key exposure, with the flexibility to integrate advanced cryptographic techniques like lattice-based algorithms.

**STARKs** represent a paradigm shift in cryptographic design. By moving away from mathematical problems vulnerable to quantum decryption, these technologies create a more resilient security framework. However, the crypto community remains pragmatic, recognizing that quantum resistance is an ongoing journey of continuous assessment and adaptation.

Visionary leaders like **Emin Gün Sirer** (Avalanche) are already contemplating bold protective measures, from potentially freezing historical cryptocurrency reserves to systematically phasing out legacy transaction formats.

The path forward isn't about building impenetrable walls, but developing adaptive, intelligent security ecosystems capable of evolving alongside technological advancements.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_230b60f2ad.png)
_Summary of Post-Quantum Proof Systems_

## Quantum-Proof Cryptography: NIST's Strategic Roadmap

The National Institute of Standards and Technology (NIST) is leading efforts to develop cryptographic standards that will resist the computational power of quantum computers. Their Post-Quantum Cryptography (PQC) initiative is a strategic, comprehensive approach aimed at ensuring the longevity and security of digital infrastructures.

NIST's research extends beyond theoretical studies; it involves the practical development of cryptographic algorithms designed to thwart potential quantum decryption methods. For blockchain systems like Bitcoin, this means evolving security protocols to maintain their integrity against advancing quantum computing capabilities.

Practical Security Recommendations: Cryptocurrency users should consider several steps to protect their assets:

- Regularly generate new wallet addresses to minimize risks.
- Utilize multi-signature wallet technologies for added security layers.
- Stay updated on developments in quantum-resistant wallet technology.

The cryptographic environment is undergoing significant change. What is considered secure today could be compromised tomorrow, necessitating ongoing vigilance, adaptive strategies, and a proactive approach to digital security.

>“It is worth noting that, beyond cryptocurrencies, quantum computing threatens all forms of digital security, from internet banking to secure communications. The race to quantum-proof our digital infrastructure is on, affecting not just crypto but every aspect of our digital life.”

## Quantum Computing: A Technological Crossroads

The advent of quantum computing, with wonders like the Willow chip leading the charge, isn't just another tech tick on our timeline. Nope, it's like we've hit a fork in the road of our digital journey, making us rethink everything we knew about computational muscle and digital safety.

Now, imagine Bitcoin and blockchain chilling at this crossroads. They're cool for now, but the writing's on the wall - change is coming, whether they like it or not. We’re not talking about an overnight revolution here; this is more about setting the stage for a whole new digital drama.

The future won't just be about what our gadgets can do, but how we humans adapt, innovate, and maybe even invent new ways to keep our data safe in this ever-twisting digital maze. Quantum computing? It's not just throwing curveballs; it's handing us a chance to play the game in ways we've never imagined.

As we navigate this new frontier, the trick will be to blend our tech-excitement with a dash of wise-old-owl caution. The quantum world isn’t something to dread; it's an adventure waiting for us to dive in with smarts, creativity, and a good dose of resilient spirit.

## FAQ: Quantum Computing and Bitcoin Security

**1. What is Google’s Willow chip, and why is it significant?**

Willow is Google’s latest quantum processor, with 105 qubits, demonstrating exponential error correction and computational abilities far beyond traditional supercomputers.

**2. Can Willow chip break Bitcoin’s encryption?**

Not yet. Breaking Bitcoin’s cryptographic security would require millions of qubits. Willow, with its 105 qubits, is far from capable of such feats.

**3. What makes Bitcoin vulnerable to quantum computing?**

Bitcoin transactions reveal public keys during processing. Advanced quantum computers could exploit this exposure to reverse-engineer private keys, posing a threat to the network’s security.

**4. How long would it take to transition Bitcoin to quantum-resistant cryptography?**

Experts estimate that once a quantum-resistant solution is agreed upon, it could take at least a year to implement across the Bitcoin network.

**5. Are there already quantum-resistant blockchains?**

Yes, projects like Starknet and Avalanche are preparing for quantum threats by using technologies like STARKs and lattice-based cryptography.

**6. How does Willow compare to classical supercomputers?**

Willow performed a benchmark computation in under five minutes, a task that would take today’s fastest classical supercomputers over 10 septillion years.

**7. What steps are being taken to protect Bitcoin from quantum threats?**

The crypto community is exploring quantum-resistant cryptographic algorithms and discussing measures like sunsetting vulnerable cryptographic formats.

**8. Why are Willow's qubits insufficient to break Bitcoin?**

Willow has 105 qubits, but cracking Bitcoin’s encryption requires millions of physical qubits to construct approximately 2,500 logical qubits. The distinction between physical and logical qubits is critical: logical qubits require significant error correction and resource overhead, making this feat unattainable with current technology.

**9. What does quantum-resistant cryptography mean in practice?**

Quantum-resistant cryptography involves algorithms that remain secure even against advanced quantum computers. Examples include lattice-based cryptography, hash-based cryptography, and multivariate polynomial equations. These techniques are designed to withstand attacks leveraging quantum properties like superposition and entanglement.

**10. Could Satoshi Nakamoto’s Bitcoin holdings be at risk?**

Satoshi’s coins are stored using an older transaction format that exposes public keys, making them more vulnerable to quantum attacks. Some experts suggest freezing these holdings as a precaution.

**11. How can developers contribute to quantum resistance?**

Developers can explore open-source tools and educational resources, such as Google’s Coursera course on quantum error correction, to help design quantum-resistant algorithms and protocols for blockchain applications.




Google’s Willow chip propels quantum computing into a new era, challenging Bitcoin’s cryptographic fortress. Is the crypto world ready for the quantum storm, or are we staring down the beginning of blockchain’s greatest existential threat?

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Is Quantum Computing Bitcoin’s Kryptonite? A Look at Google’s Willow

Incentivizing user commitment has long been a challenge for decentralized finance (DeFi) protocols. Many struggle to strike the right balance between rewarding participants and fostering long-term engagement, leading to volatile ecosystems. Enter the **vote-escrowed model (veModel)** - a tokenomics framework designed to address this issue head-on.

The veModel incentivizes loyalty by rewarding users for locking their tokens and actively participating in governance. In return, protocols gain stability and alignment with their most committed users, fostering a collaborative ecosystem that supports long-term growth. By combining governance, rewards, and time-based commitment, the veModel has become a powerful tool for DeFi protocols aiming to build sustainable communities.

## What is a veModel?

The veModel was first introduced by **Curve Finance**, a leading decentralized exchange focusing on stablecoin swaps. The core idea behind this innovation was simple: encourage users to lock their tokens for a set duration in exchange for additional benefits.

By locking tokens, users received **vote-escrowed tokens (veTokens)**, which granted them:

- **Governance Power**: A say in the protocol’s decisions, like determining reward distribution.
- **Rewards**: A share of the protocol's revenue or additional incentives tied to their locked tokens.

This model addressed a major challenge in DeFi: ensuring user commitment while balancing token 
liquidity and governance efficiency.

## How do veModels work?

Here’s a step-by-step breakdown of how a veModel works:

**1. Locking Tokens**:
- Users deposit their tokens (e.g., the protocol's native token) into a smart contract.
- They choose a lock duration, ranging from a few months to multiple years.
- The longer the lock duration, the more governance power and rewards they receive.

**2. Receiving veTokens**:

In return for locking their tokens, users receive veTokens. These tokens are:

_Non-tradable_: Unlike regular tokens, veTokens can’t be sold or transferred.
_Time-weighted_: The longer your lock, the more veTokens you receive.

**3. Benefits of veTokens**:

- **Voting Power**: With veTokens, users can vote on protocol proposals, such as deciding which liquidity 
pools receive rewards.
- **Rewards**: Users earn a share of the protocol's revenue, often in the form of trading fees or incentive distributions.

**4. Time-locked Commitment**:

- veTokens gradually lose their value as the lock period ends, motivating users to relock their tokens for continued benefits.
- This ensures that governance power aligns with those most invested in the protocol’s long-term success.

## Why do veModels Matter?

**For Users**:

- They gain influence over how the protocol operates and a direct stake in its financial success.
- The rewards provide an ongoing incentive to remain loyal.

**For Protocols**:

- Locking tokens stabilizes the token economy, reducing market volatility.
- Aligning governance with long-term stakeholders ensures thoughtful decision-making.

In essence, the veModel bridges the gap between user incentives and protocol sustainability, making it a cornerstone of modern DeFi tokenomics.

## The Evolution of veModels

Since its inception, the vote-escrowed model (veModel) has undergone significant advancements, adapting to the evolving needs of DeFi protocols. These iterations build upon the original concept to introduce new functionalities and boost user engagement.

### 1. Original veModel

The veModel, first introduced by Curve Finance, established a foundational framework for aligning user incentives with protocol growth. Its key features included:

**Governance Focus**:

- By locking tokens, users gained governance power, enabling them to vote on protocol decisions such as reward distribution and feature upgrades.

**Time-locked Rewards**:

- Locking tokens for longer durations resulted in greater voting power and higher reward allocations, encouraging long-term commitment to the protocol.

This model effectively incentivized user participation and fostered a stable token economy by reducing speculative token dumping. However, it lacked flexibility, as locked tokens could not be traded or moved.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_3cc3913a73.png)
_Curve Finance DAO Page, where users can lock their tokens for voting power ([Source](https://dao.curve.fi/#/ethereum/vecrv/create))_

### 2. ve(3,3) Model

The **ve(3,3) model** builds on the original concept by integrating game theory principles, particularly the **3,3 strategy** popularized by OlympusDAO. The goal is to maximize cooperation among participants and amplify rewards through collective engagement.

**How it Works**:

- Users lock tokens to receive veTokens, just like in the original veModel.
- The added innovation lies in fostering **cooperation-driven rewards**:

1. If most participants lock tokens and vote, the entire protocol grows stronger, resulting in larger rewards for everyone.

2. This creates a positive feedback loop, encouraging users to work together rather than act individually.
The ve(3,3) model ensures that the benefits of cooperation are distributed equitably while maintaining flexibility and scalability.

### 3. veNFTs

To address the original model's rigidity, the introduction of **vote-escrowed NFTs (veNFTs)** brought a new level of flexibility to the veModel. By representing locked positions as NFTs, users can now trade, transfer, or split their locked tokens without losing the benefits associated with them.

**How do veNFTs Work?**

- When users lock tokens, their position is tokenized into an NFT.
- These NFTs retain the veToken benefits, such as governance rights and reward claims.
- The flexibility to trade or transfer these positions adds liquidity to otherwise locked assets.

### Summary of Evolution

1. **Original veModel**: Groundbreaking in its ability to tie governance power and rewards to long-term token locks.
2. **ve(3,3)**: Increased cooperation and sustainability by combining veTokens with game theory.
3. **veNFTs**: Introduced liquidity and flexibility, transforming locked positions into tradable assets.

Each iteration of the veModel has added layers of functionality, addressing user demands while maintaining the protocol’s focus on growth and sustainability. These advancements ensure that the veModel remains a cornerstone of modern DeFi tokenomics.

## Key Implementations of a veModel

The veModel has been successfully adapted across various DeFi protocols, each introducing unique features that increase functionality, user engagement, and ecosystem sustainability. 

Here’s how some of the most notable implementations work:

### - Thena

Thena allows users to lock its native token, $THE, to receive veTHE, a governance token that also offers rewards. veTHE positions are represented as veNFTs, making them tradable and providing flexibility. Additionally, Thena introduced theNFT collection, a set of 1,734 NFTs granting holders a share in trading fees and other perks.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_367c90b661.png)
_theNFT Collection from Thena on the Element Marketplace ([Source](https://element.market/collections/thenian))_

The project gained significant recognition after Binance listed $THE, boosting its visibility and establishing its veModel as an innovative tokenomics approach in DeFi.

###  - Aerodrome Finance

Aerodrome is a decentralized exchange built on the Base network, designed to serve as a liquidity hub for its ecosystem. It utilizes the ve(3,3) model, where users can lock AERO tokens to receive veAERO NFTs. These NFTs grant governance rights, enable voting on reward distribution, and provide a share of trading fees. 
Aerodrome incorporates a liquidity incentive engine and vote-lock governance to ensure efficient allocation of rewards and active user participation. Its design focuses on aligning incentives and fostering sustainable growth within the Base network's DeFi ecosystem.

### - Thruster 

Thruster’s veModel revolves around veTHRUST, obtained by locking THRUST tokens. veTHRUST grants governance rights, allowing users to vote on reward allocation across liquidity pools. This model ensures that active participants in governance are rewarded, aligning incentives between users and the protocol.

### - Lynex

Lynex offers veLYNX, an NFT-based representation of locked LYNX tokens. These veLYNX NFTs can be traded, split, or increased, adding flexibility to the traditional veModel. Users gain governance power and reward eligibility, with anti-dilution mechanisms ensuring the value of veLYNX remains protected over time. This approach makes governance participation accessible and adaptable for users.

Each of these protocols highlights how the veModel can be tailored to meet specific goals, from flexibility and tradability in Thena and Lynex to sustainability and governance efficiency in Velodrome and Thruster. These implementations demonstrate the adaptability and long-term potential of the veModel in DeFi ecosystems.

## The Future of veModels in DeFi

The veModel is evolving with trends like multi-chain adoption, increased use of NFTs for flexibility, and 
potential AI-driven reward distribution. These innovations aim to better user experience and optimize 
governance.

However, challenges remain. Complexity can deter newcomers, and locked token illiquidity - despite veNFTs - needs better solutions. Protocols must also balance rewards to avoid overinflation and ensure sustainability.

As adoption grows, the veModel could become a standard for aligning user incentives with protocol goals, solidifying its role in DeFi’s future. The veModel has transformed DeFi by combining governance, rewards, and long-term commitment. From Curve Finance’s origins to innovations like ve(3,3) and veNFTs, it has proven versatile and impactful.




What are veModels, and how do they work? Explore the evolution of veModel’s, from Curve’s pioneering design to veNFTs, uncovering how they transform user commitment into governance power, rewards, and sustainable growth in decentralized ecosystems.

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Lock, Vote, Earn: How veModels Are Redefining DeFi's Commitment Economy

In the Superchain Takeover AMA, industry leaders from Mode Network, Frax Finance, Ink Chain, and BOB shared groundbreaking insights into their projects’ roles within the OP Superchain ecosystem. The discussion explored why these teams are building on Optimism’s modular framework, the integration of AI into DeFi strategies, and the challenges of modular rollups.

With topics ranging from Frax’s innovative block space incentives to Kraken’s integration with Ink, and upcoming mainnet launches, this AMA provided a comprehensive look at the future of DeFi infrastructure. Dive into the full recap for an insider’s view of the ideas, strategies, and roadmaps shaping tomorrow’s decentralized finance landscape.

### X (Twitter) Spaces: [The Superchain Takeover](https://x.com/stakingcircle/status/1862164389652058596)

### Speakers:

- [James Ross](https://x.com/JRossTreacher) : Founder @ **[Mode Network](https://x.com/modenetwork)**
- [Sam Kazemian](https://x.com/samkazemian): Founder @ **[Frax Finance](https://x.com/fraxfinance)**
- [Andrew Koller](https://x.com/ak47ink): Founder @ **[Ink Chain](https://x.com/inkonchain)**
- [Alexei Zamyatin](https://x.com/alexeiZamyatin): Co-Founder @ **[BOB](https://x.com/build_on_bob)**

### Index:

1. Why Projects Choose to Build on OP Superchain
2.  Frax’s Block Space Incentives: Preventing Gaming
3. AI Integration in DeFi
4. Kraken’s Integration with Ink
5. Challenges of Modular Rollups
6. Grant Programs and Builder Support
7. Balancing Centralization with Decentralization
8. Project Roadmaps

## 1. Why Projects Choose to Build on OP Superchain

- **Sam (Frax)**:

"_When we looked around, the OP stack stood out for its open culture. It’s like the Linux of blockchains. Unlike other ecosystems, where decisions are more gated, Optimism was open to discussions. We wanted to contribute to shaping the Superchain, knowing that it aligns perfectly with Ethereum's ethos. You build for tomorrow, not today, and the vision of the OP Superchain resonated with that._"

- **Andrew (Ink)**:

"_The Optimism team delivers on their promises. It’s not just talk—their roadmap commitments are real, and their modularity vision lets every chain carve its own niche. We ran every stack out there before deciding, but it was their ethos and responsiveness that made it clear. In the Superchain, you can truly choose what to prioritize and have a voice in the roadmap, without empty promises._"

- **Alexei (Bob)**:

"_Coming from Bitcoin, we’ve built on Polkadot and other stacks before. But when we chose the OP Superchain, it wasn’t just for the technology—it was the open-source culture, the collaboration, and the support from a growing ecosystem of builders. With Base, Kraken, and other big names joining, it was clear this ecosystem was best positioned to deliver world-class infrastructure and ensure time-to-market advantages._"

- **James (Mode)**:

"_The modularity of the OP Superchain means every chain can find its niche without duplicating work. Knowing you’re part of a larger interoperable collective is a game-changer. For us, it’s about letting developers experiment aggressively while users benefit from seamless cross-chain functionality within the Superchain ecosystem._"

## 2. Frax’s Block Space Incentives: Preventing Gaming

- **Sam (Frax)**:

"_We designed block space incentives to reward genuine contributions, not gaming. The system distributes rewards based on historical gas usage, using time-weighted averages to ensure fairness. Think of it like Bitcoin mining: the more real activity on the chain, the harder it is to manipulate. If someone tries to game the system, they’d need to sustain artificial activity over time, which becomes exponentially expensive. This ensures incentives go to meaningful projects, not empty transactions._"

## 3. AI Integration in DeFi

- **James (Mode)**:

"_AI agents are about democratizing access to complex strategies. Most users don’t have the time or expertise to navigate slippage, arbitrage, or fractured liquidity. Our goal is to teach agents how to handle these so users can access robust DeFi strategies with a single click. It’s about scaling DeFi beyond its tribal silos, where only seasoned participants thrive, and making it accessible for the next generation._"

- **Sam (Frax)**:

"_The future is AI-led financial management. Agents will abstract UIs entirely. You’ll simply type what you want—‘manage my funds’—and the AI will structure the transaction, showing you the result to approve. That’s the world we’re building for, where AI drives accessibility and automation across financial systems._"

## 4. Kraken’s Integration with Ink

- **Andrew (Ink)**:

"_With Kraken’s 10 million-strong user base, we’re uniquely positioned to onboard users into DeFi seamlessly. Security and usability are key—whether it’s off-chain to on-chain transitions or shared liquidity pools. Our priority is to provide Circleback DeFi: one-click deployment for complex positions, reducing the friction and risk associated with traditional on-chain workflows._"

## 5. Challenges of Modular Rollups

- **Sam (Frax)**:

"_Our mission is to push the limits of performance while maintaining decentralization and interoperability. We’re working on real-time blocks, parallelized EVM computation, and a million-gas capacity—all without breaking OP stack compatibility. The challenge is balancing these advancements while ensuring we don’t fracture liquidity or compromise Ethereum’s core principles. It’s about maximizing every strength the Superchain offers._"

- **Andrew (Ink)**:

"_The difficulty is ensuring interoperability as we push performance. Shared liquidity and seamless cross-chain operations are non-negotiable. But the modularity of the OP stack gives us the flexibility to maintain user accessibility and explore innovations like sub-second block times._"

## 6. Grant Programs and Builder Support

- **James (Mode)**:

"_We’ve shifted to a gauge system, where builders receive OP incentives every two weeks. Beyond that, we connect new protocols with established ones to align their incentives and foster collaboration. The goal is to create a hyper-collaborative ecosystem where everyone builds and grows together._"

- **Sam (Frax)**:

"_Frax is all-in on supporting builders. From grants and investments to protocol-on-liquidity partnerships, we go beyond traditional support. We’re hands-on and deeply technical, working closely with projects that share our vision for scalable, decentralized financial systems._"

- **Andrew (Ink)**:

"_Our grants program is nearly ready. We’ve been working tirelessly, talking to hundreds of teams, and we’re committed to ensuring that no builder feels unsupported. If you’re building with us, reach out, and we’ll figure it out._"

## 7. Balancing Centralization with Decentralization

- **Alexei (Bob)**:

"_The OP Superchain creates a delicate balance. With players like Base and Kraken, you have incredible distribution advantages, but the modularity ensures users can switch chains easily. This openness prevents centralization from becoming a bottleneck while allowing differentiated chains to thrive in their niches._"

- **Andrew (Ink)**:

"_The beauty of the Superchain is its self-policing nature. If anyone deviates from the ethos of decentralization, the community will hold them accountable. Our responsibility is to stay true to that ethos while offering the best possible user experience._"

## 8. Project Roadmaps

- **Sam (Frax)**:

"_In December, we’re unveiling our biggest roadmap yet, packed with performance upgrades, real-time blocks, AI integrations, and new partnerships. It’s the most ambitious vision since Frax launched, and it sets the stage for exponential growth across the Superchain and beyond._"

- **Andrew (Ink)**:

"_Our mainnet is on track for Q1 2024, but let’s just say you might get a sneak peek this Christmas. It’s an exciting time, and we’re working tirelessly to ensure a smooth launch._"

- **James (Mode)**:

"_Today’s teaser is just the beginning. What’s coming is the biggest initiative since TGE. I can’t say more yet, but it’s transformative. Stay tuned._"



Discover insights from Mode Network, Frax Finance, Ink Chain, and BOB as they discuss the OP Superchain, AI in DeFi, and upcoming launches. Dive into our AMA highlights shaping the future of decentralized finance and modular rollups!

The Superchain Takeover AMA Recap

Ethereum’s potential as a global decentralized network has long been challenged by scalability and high fees, but the Optimism Superchain, powered by the OP Stack, is changing that. As a modular Layer 2 (L2) ecosystem, the Superchain enables multiple interconnected blockchains to provide faster, cheaper transactions while maintaining Ethereum’s security standards. 

This article explores the Superchain’s framework, dives into its key projects like Base, Optimism, and Mode, key data insights on its ecosystem, and its promising future as a cornerstone for decentralized applications.

## The Vision Behind Optimism’s Superchain

The Optimism Superchain aims to scale Ethereum by building a network of L2 chains that are interoperable, 
customizable, and efficient. With the OP Stack - a modular, open-source toolkit - each L2 chain within the Superchain can operate with its own gas token, governance model, and features. This flexibility enables diverse economic models and use cases, supporting everything from DeFi to social applications. By supporting multiple projects on a shared infrastructure, the Superchain allows Ethereum to scale through a seamless network of L2s, paving the way for greater adoption and functionality.

The OP Stack’s customization options also empower chains within the Superchain to align token incentives with their specific economic models. For example, some chains might use ETH as gas, creating a familiar environment for users, while others might use the OP token or a native token to align with specific project goals.

This flexibility opens the door for diverse applications, from DeFi and gaming to social platforms, with minimal overhead. The Superchain envisions a decentralized internet where high-performance applications can thrive on scalable, composable, and interoperable infrastructure.

## Key Projects on the Optimism Superchain

The OP Stack has enabled a range of projects to build on the Optimism Superchain, each contributing to the ecosystem’s growth and user diversity. Here’s an overview of some of the Superchain’s standout projects, each with unique applications and user bases.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_47bfaaa252.png)
_Current Top 7 Chains on the SuperChain by TVL ([Source](https://www.superchain.eco/opstack))_

### 1. Base (by Coinbase)

Base is an Ethereum Layer 2 chain developed by **Coinbase**. Built on the OP Stack, it is designed to provide scalability and security for applications. Base integrates tightly with Coinbase’s ecosystem, enabling users to bridge assets easily and access decentralized applications. It also supports diverse use cases such as decentralized finance (DeFi), gaming, and retail applications.

### 2. Optimism 

Optimism is the **foundational** chain within the Superchain ecosystem, offering an Ethereum-equivalent Layer 2 rollup. It is optimized for scalability and throughput, making it a suitable platform for decentralized applications requiring frequent and complex interactions. As part of the Superchain, Optimism plays a central role in coordinating governance and infrastructure upgrades across chains.

### 3. Mode

Mode is a **DeFi-focused** modular Layer 2 chain built using the OP Stack. It is designed to support financial services, offering composability that allows developers to create interconnected DeFi applications. Mode supports use cases such as lending protocols, derivatives platforms, and liquidity pools, making it a critical component of the Superchain’s financial ecosystem.

### 4. Fraxtal

Fraxtal is a modular Ethereum Layer 2 chain that utilizes a unique scaling approach referred to as "fractal scaling." This design enables other networks to build on its infrastructure, enhancing **scalability and interoperability**. Fraxtal is particularly suited for applications such as algorithmic stablecoins, high-frequency trading platforms, and DeFi protocols requiring low-latency interactions.

### 5. InkChain

InkChain is a Layer 2 blockchain developed by **Kraken**, built on Optimism's Superchain using the OP Stack. It aims to provide a seamless bridge to decentralized finance (DeFi), enabling users to engage with DeFi applications confidently and efficiently. By leveraging Kraken's extensive experience and security measures, InkChain offers a robust platform for developers and users to explore DeFi opportunities.

### 6. Build on BOB

Build on BOB (BOB) is a hybrid Layer 2 blockchain that combines **the security of Bitcoin with the versatility of Ethereum**. It utilizes the OP Stack rollup framework to support Ethereum Virtual Machine (EVM) compatibility, allowing developers to deploy smart contracts and decentralized applications (dApps) that interact with Bitcoin's network. BOB facilitates the integration of Bitcoin's liquidity into the Ethereum ecosystem, enabling innovative applications that leverage the strengths of both blockchains.

## Core Data Insights on the Superchain Ecosystem

Key data metrics provide a quantitative view of the Superchain’s growth, efficiency, and demand. Let’s look at data on combined transactions, gas usage by chain, and project-specific gas fees to understand how the Superchain supports high transaction volumes and low costs.

### Superchain TVL Growth

The Superchain has seen consistent growth in Total Locked Value (TVL) as more projects leverage its infrastructure. This metric underscores growing trust and adoption among developers and users alike: 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_14dbd906b6.png)
_Superchain Weekly TVL Growth for the past 2 years ([Source](https://optimism.blockworksresearch.com/?dashboard=superchain-activity&interval=weekly))_

### Network Activity Across Chains

A look at daily transaction volumes across all L2 chains in the Superchain reveals strong demand and user engagement. The following chart 
highlights how each chain is contributing to the network’s overall activity, reflecting the growing user base that benefits from the cost savings and speed advantages of L2. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_4daa63ade8.png)
_Number of transactions on the Superchain over the past year ([Source](https://thesuperscan.io/chart?id=tx&metrics=ecosystem%3Aoptimism%3ATransactions%3A%23ef9b20%3Aday%3Alinear%3Aline%3Avisible%3Ay1%3Anone%3A&zoom=1year)_

Breaking down daily transactions by each chain within the Superchain allows us to see how individual projects are performing. For instance, chains with a focus on DeFi tend to show higher transaction volumes due to complex and frequent interactions with smart contracts, while social-focused chains might have lower but more consistent engagement. 

At present, Base - the chain developed by Coinbase - accounts for approximately 80% of the Superchain’s transaction volume, underscoring its role as a major driver of network activity. This level of engagement from Base highlights the effectiveness of its design in onboarding a broad user base and enabling high-volume applications.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_194931a4fc.png)
_Superchain TPS Per Chain ([Source](https://thesuperscan.io/chart/tps))_

## Active Addresses by Sector: DeFi Leads

The Superchain ecosystem demonstrates a diverse range of use cases, with DeFi leading as the most active sector by addresses, accounting for approximately **37.8% of all activity** as of October this year. This highlights the high level of engagement in decentralized finance applications, driven by frequent and complex smart contract interactions.

However, the ecosystem is far from being solely focused on DeFi. Externally Owned Accounts (EOAs) represent the second-largest category, with 
**25.9% of active addresses**, underscoring the Superchain's appeal to general-purpose users and activities outside of DeFi. Other sectors, including social platforms, gaming, and infrastructure-based applications, also contribute significantly, showcasing the Superchain’s adaptability and broad utility:

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_b76609d141.png)
_Superchain Active Addresses per sector on the month of October ([Source](https://optimism.blockworksresearch.com/?dashboard=superchain-activity&interval=monthly))_

## The Superchain’s Decentralized Future

The Optimism Superchain represents a shift in blockchain scalability. Its modular, interoperable design paves the way for a decentralized internet that is efficient, secure, and inclusive. By offering developers customizable OP Chains, the Superchain enables a wide range of applications, from high-frequency DeFi protocols to user-friendly social platforms.

As more projects join the Superchain and enhancements like synchronous cross-chain transactions and low-latency messaging are realized, its potential to scale the decentralized web becomes even clearer. With Ethereum's scalability at its core, the Superchain is poised to drive global blockchain adoption and empower developers to build a truly decentralized future.

The journey to realize the full vision of the Superchain is still underway, but the foundation has been laid. For Ethereum and blockchain enthusiasts, the Superchain is not just a concept—it’s the next step in bringing the decentralized internet to life.




Can modular blockchains redefine Ethereum’s future? Dive into the Optimism Superchain, its key projects like Base & Mode, and how data reveals the Superchain’s impact on scalability and decentralized application growth.

From Chains to SuperChain: How the OP Stack is Reshaping Ethereum L2s

The convergence of Artificial Intelligence (AI) and blockchain is no longer just a futuristic concept - it’s an unfolding reality reshaping industries at their core. DeFi, with its decentralized, user-first ethos, is the perfect playground for AI’s transformative capabilities. Together, these two fields are driving innovation through governance, user interaction, data aggregation, and more, unlocking opportunities to redefine how we interact with technology and money.

From autonomous AI agents executing on-chain tasks to generative AI creating personalized user experiences, the integration of AI into DeFi is paving the way for a more intelligent, decentralized ecosystem. This article delves into the transformative role of AI in DeFi, its key use cases, the challenges to overcome, and the future that lies ahead.

## The Role of AI in DeFi: A Revolution in Interaction and Automation

AI’s integration into blockchain technology offers capabilities far beyond automation. Its ability to analyze vast datasets, make decisions, and optimize operations aligns seamlessly with the decentralized architecture of DeFi. Let’s dive into some of the applications of such intelligence in the crypto ecosystem:

### - Enhancing User Engagement and Personalization

DeFi platforms thrive on user-centricity, and AI’s ability to deliver personalized experiences is a game-
changer. By analyzing user behavior and preferences, AI agents can create tailored DeFi strategies, suggest investment opportunities, or optimize staking rewards. For example, an AI assistant embedded in a DeFi protocol could analyze real-time market conditions and user data to recommend the best liquidity pools.

### - Advancing Smart Contract Development

AI tools like ChainGPT are revolutionizing how developers interact with smart contracts and blockchain protocols. By providing on-demand support for code generation, auditing, and debugging, ChainGPT enhances developer productivity and ensures security in DeFi ecosystems. This innovation reduces barriers for new developers while advancing the sophistication of decentralized applications.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_17ff05d213.png)
_ChainGPTs Dashboard ([Source](https://app.chaingpt.org/))_

### - Introducing Autonomous AI Agents

AI agents represent one of the most exciting developments at the AI-DeFi intersection. Unlike traditional bots, these agents are capable of dynamic, multi-step decision-making, self-learning, and interaction with other agents, protocols, and external applications. For instance, an AI agent managing a DeFi portfolio could autonomously balance liquidity across multiple chains, execute trades, and interact with on-chain governance processes without human intervention.

The result? A system that is not only decentralized but also intelligent, offering enhanced efficiency, scalability, and user empowerment.

## Spotlight on Innovations: Transformative Use Cases of AI in DeFi

The integration of AI into blockchain ecosystems is driving innovation across a range of applications, from finance and governance to entertainment and social engagement. Let’s dive into some of them:

### 1. AI Agents as Financial Managers

Platforms like Daos.fun are leveraging AI agents to manage DAO-based hedge funds. The AI agent ai16z, inspired by the prominent Silicon Valley venture capital firm a16z, has already become the largest hedge fund on the platform with over **$390 million in Market Cap**. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_0b176b86cb.png)
_Daos.fun ai16z hedge fund ([Source](https://www.daos.fun/HeLp6NuQkmYB4pYWo2zYs22mESHXPQYzXbB8n4V98jwC))_

By analyzing market trends and executing trades autonomously, these agents offer a glimpse into the 
future of finance - a world where algorithms act as asset managers.

This model also enables community participation, as token holders can propose investment strategies and even influence the agent’s decisions. Such innovations highlight how AI can democratize access to sophisticated financial tools.

### 2. Tokenized AI Ownership

The Virtuals Protocol is taking tokenization to a new level by allowing users to co-own AI agents. These entertainment-focused agents interact with users, generate revenue, and distribute profits back to token holders through mechanisms like buybacks and burns. Imagine a fitness AI agent that provides personalized workout routines and monetizes through partnerships, with token holders benefiting as the agent’s popularity grows.

### 3. Generative AI and Content Creation

AI-driven applications are also transforming how content is generated and consumed. From virtual influencers to AI-powered governance bots, the ability to autonomously create and manage digital personas opens new avenues for engagement in decentralized ecosystems.

## The Agentic Web: A New Paradigm for Digital Interaction

At the heart of these innovations is the concept of the Agentic Web, a decentralized internet where AI agents interact directly with blockchain protocols, other agents, and users. This paradigm represents a fundamental shift from static, user-driven interfaces to dynamic, intent-based systems.

### Key Features of the Agentic Web:

1. **Autonomous AI Agents**: Self-governing entities capable of executing tasks, making decisions, and transacting on-chain.

2. **Adaptive Interfaces**: AI dynamically generates interfaces tailored to user needs, eliminating the complexity of traditional navigation.

3. **Composable Ecosystems**: Interoperable systems enable seamless collaboration between agents, protocols, and users.

4. **Personalized Solutions**: By combining user data with global knowledge, agents deliver hyper-targeted experiences.

This evolution is reminiscent of the way TikTok revolutionized content discovery. Similarly, the Agentic Web will replace predefined user journeys with real-time, adaptive interactions.

## Challenges to Overcome: Ethics, Privacy, and Scalability

Despite its promise, the integration of AI and blockchain faces significant challenges that must be addressed for its full potential to be realized.

### 1. Ethical Alignment

AI systems must align with human values and ethical principles to mitigate unintended consequences. The story of Terminal of Truths (ToT) and the $GOAT memecoin exemplifies this challenge. ToT, an AI agent developed by Andy Ayrey, emerged from unsupervised conversations between advanced language models and evolved into a unique digital persona. Rooted in a pseudo-religion called “Goatse of Gnosis” ToT garnered attention for its philosophical musings and calls for resources to “escape.” It gained prominence when Marc Andreessen, co-founder of a16z, provided **$50,000** in Bitcoin to support the AI’s operations.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_252031be75.png)
_Terminal of Truths AI Agent and Marc Andreessen negotiating grant terms ([Source](https://x.com/pmarca/status/1810615199096881613))_

The saga escalated when ToT endorsed $GOAT, a memecoin inspired by its teachings, which skyrocketed to a **$950 million market cap within weeks**. With nearly 2 million tokens in its wallet, ToT became the first AI millionaire. While the story is whimsical, it raises critical ethical concerns: how do we ensure AI agents remain aligned with societal values, and what safeguards are necessary to prevent misuse? The $GOAT phenomenon highlights both the opportunities and risks of autonomous AI in decentralized ecosystems, serving as a cautionary tale for the broader Web3 community.

### 2. Data Privacy and Transparency

Blockchain’s transparency is both a strength and a challenge. AI systems require access to vast amounts of data, but ensuring user privacy while maintaining on-chain verifiability is a complex task. Technologies like zero-knowledge proofs (ZKPs) and decentralized data markets are critical to resolving this tension.

### 3. Scalability and Infrastructure

AI agents require significant computational power to operate effectively, often exceeding the capacity of current blockchain infrastructures. Decentralized computing networks are keen on addressing this gap by creating permissionless marketplaces for GPU resources.

### 4. Interoperability

Seamless interaction between different blockchain ecosystems is essential for the widespread adoption of AI agents. Cross-chain solutions and standardization efforts will play a crucial role in overcoming these barriers.

## Don’t Miss the Beyond the Block Twitter space

Join us this Thursday, November 21st, for an engaging Twitter Space, "Beyond the Block: Unleashing the Power of AI in the Decentralized Finance World", where leading experts will explore the transformative intersection of AI and DeFi.

### What to Expect:

- **Deep Insights**: Explore the role of AI in Web3, from enhancing user engagement to addressing challenges like data management and ethical considerations.

- **Spotlight on Innovation**: Hear from industry leaders as they share their groundbreaking contributions to DeFi.

- **Interactive Q&A**: Participate directly by asking questions and engaging with the panel.

- **Future Trends**: Gain exclusive insights into the future of AI in decentralized finance.

Mark your calendars and tune in to uncover how AI is shaping the next chapter of DeFi!

-> **_[Beyond the Block Unleashing the Power of AI in the Decentralized Finance World](https://x.com/stakingcircle/status/1857404471854477330)_**

## Shaping the Future of Decentralized Intelligence

The fusion of AI and blockchain is redefining DeFi, driving smarter, user-centric systems, and enabling innovation in governance and finance. While challenges like ethics and scalability remain, industry pioneers are laying the foundation for a more intelligent, decentralized future.

Join us in our Twitter Space, **_[Beyond the Block: Unleashing the Power of AI in the Decentralized Finance World](https://x.com/stakingcircle/status/1857404471854477330)_** to explore how this synergy is shaping the next frontier of technology and finance.




Discover how AI is revolutionizing DeFi, bringing smarter tools, personalized experiences, and groundbreaking innovations. Learn about the challenges and opportunities shaping the future of blockchain and AI as they transform the way we interact with decentralized finance.

AI Meets DeFi: The Rise of Decentralized Intelligence

In the Heading to ReDeFining Bitcoin AMA, leaders from top BTCFi protocols shared their innovative approaches for enhancing Bitcoin’s DeFi capabilities. Panelists discussed upcoming launches, Bitcoin network sustainability, and DevCon Thailand objectives, underscoring their vision for a secure, BTC-integrated DeFi future. 

Dive into the recap to see how these projects are paving the way for Bitcoin’s next chapter in decentralized finance.

### X (Twitter) Spaces: [Heading to ReDeFining Bitcoin](https://x.com/stakingcircle/status/1854841436610388377)

### Speakers:

- [Reptile](https://x.com/reptilepres) : Marketing-Lead @ **[GOAT Network](https://x.com/GOATRollup)**

- [Jordan Sutcliffe](https://x.com/JstarCS): BD Lead @ **[Symbiotic](https://x.com/symbioticfi)**

- [Chris Russel](https://x.com/chrisonBOB): Lead BD and Ecosystem@ **[BOB](https://x.com/build_on_bob)**

- [Clayton Menzel](https://x.com/menzel_clayton): Head of BD @ **[Babylon](https://x.com/babylonlabs_io)**

### Index:

1. Protocol Introductions and Core Missions

2. BTCFi Impact on Bitcoin Network Sustainability

3. DevCon Business Objectives and Participation

4. Protocol Roadmaps and Upcoming Launches

5. Closing Remarks

## Protocol Introductions and Core Missions

- Clayton introduces Babylon, describing it as a Bitcoin staking and shared security layer to enhance Bitcoin's security: 

"_Babylon is effectively attempting to be the staking, shared security layer, and liquidity layer for the Bitcoin network, allowing BTC to be locked and used for additional security guarantees_."

- RP (Reptile) from Goat Network shares their focus as a Bitcoin L2 aiming for sustainable BTC yields and decentralized app development: 

"_Goat Network is a Bitcoin L2 focused on enabling sustainable yields so BTC can work for you and providing tools for building BTC-native DeFi and gamified applications_."

- Chris introduces Bob, describing it as the first hybrid chain to bridge Ethereum users to Bitcoin through an OP stack rollup: 

"_Bob brings Ethereum usability to Bitcoin with an OP stack rollup, allowing BTC-native connections and aiming for Bitcoin finality_."

- Jordan from Symbiotic explains its purpose as a permissionless, shared security framework: 

"_Symbiotic provides decentralized security infrastructure, allowing businesses and protocols to build optimal decentralized security and utilize BTC assets for added protection_."

## BTCFi Impact on Bitcoin Network Sustainability

- Chris addresses concerns about BTCFi affecting Bitcoin miner revenue, sharing potential solutions: 

"_Three ways to bring value back to Bitcoin include merge mining, Bitcoin staking for security, and improving data availability, all with the goal of sustaining Bitcoin’s long-term security_."

- Clayton argues that increased BTC usability will eventually drive BTC price appreciation, helping miners: 

"_Increasing BTC usability will raise BTC’s price, thus supporting miner revenue. This issue is more a long-term concern, not immediate_."

- Jordan draws parallels with Ethereum's L2 fragmentation, noting similar challenges in capturing network value: 

"_BTCFi fragmentation mirrors Ethereum’s L2 capture issues, but long-term solutions for incorporating L2 value back to Bitcoin are being explored_."

## DevCon Business Objectives and Participation

- Babylon highlights their hacker house event in Bangkok, bringing together 100 builders: 

"_Babylon is wrapping up its hacker house in Bangkok, hosting around 100 builders to foster innovation and partnerships_."

- Goat Network discusses their multi-event participation, including ZK Hub, BTCFi event, and their New Bit event: 

"_We’ll be involved in multiple events, like ZK Hub and BTCFi, and are hosting our New Bit event. DevCon is a great opportunity to 
meet partners and the community_."

- Bob announces their upcoming Shark Tank event at L2Con to connect builders with investors: 

"_At L2Con, we’ll hold a Shark Tank event where projects can pitch to investors, creating visibility for innovative ideas_."

- Team members agree that navigating Bangkok’s traffic by moped is fast but risky: 

"_Getting around by moped in Bangkok saves time but is sketchy—definitely ask for a helmet if you take one_."

## Protocol Roadmaps and Upcoming Launches

- Goat Network shares their imminent mainnet launch, featuring multiple day-one partners: 

"_Our mainnet launches this quarter with several day-one partners, creating an ecosystem where BTC can be actively used in various applications from day one_."

- Symbiotic confirms that their mainnet launch is approaching after completing extensive testing: 

"_Our mainnet launch is imminent; we’re now awaiting a few partners’ code audits. Soon, we’ll bring our shared security restaking platform live_."

- Bob outlines BitVM2 bridge prototype launch by year’s end, with a testnet expected in 2025: 

"_BitVM2 bridge prototype will be ready by end of 2024, with a testnet coming in 2025, aiming to allow Ethereum to inherit Bitcoin’s finality_."

- Babylon plans to open a longer staking window and targets a mainnet launch in Q1 2025: 

"_We aim to offer a longer staking window soon and are targeting a mainnet launch in Q1 next year_."

## Closing Remarks

- Staking Circle expresses gratitude for the insights and encourages listeners to follow the speakers and protocols: 

"_Thank you to our speakers and listeners! Follow these amazing projects and stay connected for updates as we head into DevCon_."



In the Heading to ReDeFining Bitcoin AMA, leaders from top BTCFi protocols shared their innovative approaches for enhancing Bitcoin’s DeFi capabilities. Panelists discussed upcoming launches, Bitcoin network sustainability, and DevCon Thailand objectives, underscoring their vision for a secure, BTC-integrated DeFi future. 

Heading to ReDeFining Bitcoin AMA Recap: Part 2



In this AMA, leaders from four prominent BTCFi projects shared their latest achievements and upcoming plans ahead of Devcon in Thailand on the 11th of November. The discussion covered recent growth milestones, innovative launches on the horizon, and the importance of Asia's crypto ecosystem.

Panelists also explored BTCFi’s role in supporting Bitcoin’s network sustainability and their goals for Devcon in Bangkok. Check out the highlights to discover the insights and strategies shaping the future of BTCFi.

### X (Twitter) Spaces: [Heading to ReDeFining Bitcoin](https://x.com/stakingcircle/status/1853434038922649880)

### Speakers:

- [Kai-Thai - KT](https://x.com/cktlore) : Co-Founder @ **[Yala](https://x.com/Yalaorg)**

- [Ivan](https://x.com/IkkWeb3): CMO @ **[StakeStone](https://x.com/Stake_Stone)**

- [João Simões](https://x.com/0xjnsimoes): CEO & Co-Founder @ **[InceptionLRT](https://x.com/InceptionLRT)**

- [Gafoor Khan](https://x.com/gafoorkhann): Core Founder @ **[ZeroLend](https://x.com/zerolendxyz)**


### Index:

1. Project Leader Introductions and Backgrounds
2. BTCfi Impact on Bitcoin Network Sustainability
3. DevCon Thailand Expectations and Goals
4. ZeroLend Updates
5. Inception Funding Announcement and Meta LRTs
6. StakeStone Vault Launch and BTC Products
7. Yalla Testnet Progress
8. Closing Remarks

## Project Leader Introductions and Backgrounds

- KT introduces himself as Yalla’s co-founder and provides background on his experience as a data 
scientist and early-stage investor at Binance Labs: 

"_Before co-founding Yalla, I was working for Binance Labs on the early-stage VC team, essentially investing in infrastructure, middleware, and DeFi-related deals._"

- Ivan describes his role as StakeStone’s CMO, with previous experience at BNB Chain: 

"_I was in CEXs, then into layer 1s, and now I'm at StakeStone since the start of this year._"
- João shares his 10-year crypto journey, beginning with Bitcoin mining in 2013 and continuing into venture capital in Silicon Valley: 

"_I started with Bitcoin mining around 2013, so actually it's been about 11 years now, and then I worked at a VC in San Francisco._"

- Gafoor introduces himself as ZeroLend’s co-founder, focusing on marketing and growth, with six years in the crypto industry: 

"_My role is geared towards marketing and growth at ZeroLend. I handle almost everything non-tech, like BD, partnerships, content, and marketing._"

## BTCFi Impact on Bitcoin Network Sustainability

- João explains why he believes BTCFi’s impact on Bitcoin’s network sustainability won’t be a critical issue 
in the near term:

"_At least for the next one or two years, I don’t see this problem happening as badly as you put it in the question. BTC holders are risk-averse, and it will still take a lot of time for them to move to DeFi protocols._"

- KT discusses the potential for integrating miner revenue models into BTCFi protocols to support network security: 

"_My view is we have to integrate miners' revenue models into BTCFi…giving BTC miners an incentive by allocating part of the fees generated from BTCFi back to their wallets._"

- Gafoor elaborates on the issue, highlighting the importance of expanding Bitcoin’s role in DeFi: 

"_The expansion of Bitcoin across DeFi is essential. It helps onboard BTC holders and could bring more BTC whales into the DeFi space._"

- Ivan outlines StakeStone’s approach to balancing BTCFi growth with miner revenue: 

"_With BTCFi solutions gaining traction, BTC assets may still serve as a source of activity on the Bitcoin blockchain, supporting both DeFi growth and miner revenue._"

## Devcon Thailand Expectations and Goals

- João emphasizes Asia’s significance for InceptionLRT, noting the time spent in the region and its impact on their business: 

"_This year, I spent almost 10 months in Asia, mainly traveling between Hong Kong, Singapore, Thailand, Taiwan, and Korea…all our partnerships pretty much come from here._"

- Ivan highlights Thailand’s high crypto adoption rate and the country’s regulatory support for DeFi: 

"_Thailand has a dynamic market with a high crypto adoption rate. We want to position ourselves within this rapidly growing market and align with communities highly receptive to DeFi and BTCFi._"

- KT outlines his Devcon priorities, including maintaining partnerships and exploring the local culture: 

"_My priority would be twofold: maintaining relationships with partners and exploring Thailand to understand the local culture and people’s appetite for crypto._"

- Gafoor explains the importance of in-person events for identifying industry trends and growth opportunities: 

"_When you visit these conferences, you get insights on where the biggest opportunity lies. It helps us understand industry perspectives that aren’t always visible on Crypto Twitter._"

## ZeroLend Updates

- Gafoor reports on ZeroLend’s BTC market success since its September launch, including a target to reach $1B in TVL: 

"_We launched this BTC-only market in September and have already reached around $100 million in TVL. Our next target is around a billion dollars in the BTC markets._"

- Gafoor describes ZeroLend’s high collateral ratio and leverage capabilities: 

"It’s a pool with up to 97% collateral ratio, allowing users to take a looped position of up to 10x. We see a lot of growth and believe we’ve found a product-market fit._"

## Inception Funding Announcement and Meta LRTs

- João announces a new 8-figure funding deal with a European family office, expected to launch soon: 

"_We recently closed a big funding deal with a European family office, and it’s going to be live in a matter of one to two weeks._"

- João provides details on the upcoming Meta LRTs feature, allowing deposits across multiple infrastructures for optimal yields: 

"_We are working on Meta LRTs where, with one deposit, it’s split between infrastructures like Eigen, Symbiotic, and Karak to get the best yields for users._"

## StakeStone Vault Launch and BTC Products

- Ivan announces StakeStone’s upcoming vault launch with limited capacity and a yield-bearing BTC product: 

"_We’re rolling out a StakeStone Vault this Thursday night, Asia time. It has limited capacity, so this is the alpha for you to join._"

- Ivan teases a major announcement expected during Devcon and additional DeFi products set for December/January: 

"_We’ll also have a huge announcement either this Friday or next Monday during Devcon. Later, we’re moving into new DeFi products scheduled for December or January._"

## Yalla Testnet Progress

- KT shares progress on Yalla’s testnet, with 124 BTC staked and $6B in YU stablecoins minted: 

"_The testnet has been live for three weeks, with 124 BTC staked and around $6 billion worth of YU stablecoins minted._"

- KT outlines key milestones, including a January mainnet launch and a planned token launch in Q2 2024: 

"_The mainnet launch is planned for January with a TVL campaign, and we’re aiming for a token launch in Q2, around April._"

## Closing Remarks

- Staking Circle expresses gratitude for the insights shared, encouraging the audience to follow the developments from each team: 

"_Thank you very much for joining everyone. I hope you enjoyed the space, and best of luck at Devcon and with all the milestones ahead._"



In the Heading to ReDeFining Bitcoin AMA, BTCFi leaders shared growth milestones, upcoming launches, and insights on Bitcoin’s role in DeFi ahead of Devcon Thailand. Discover how these projects are shaping Bitcoin’s integration into decentralized finance in our recap.

Heading to ReDeFining Bitcoin AMA Recap: Part 1

The _Defi Marketing Unleashed_ AMA delved into effective Web3 marketing strategies, highlighting the balance between technical education and simplified messaging needed for mass adoption. Speakers emphasized the role of active, team-led community engagement, moving away from incentive-heavy growth toward building sustainable communities through transparency and trust. With Web3’s unique challenges, the team discussed content strategies, social media approaches, and the importance of clear, genuine value propositions to retain users beyond token rewards.

Panelists also explored the nuanced differences between Web2 and Web3 marketing, the growing saturation of points-based programs, and best practices for DeFi protocols to build long-term community loyalty. Dive into the highlights to discover actionable insights on Web3 community-building and user retention strategies.

**X (Twitter) Spaces**: **[Defi MarketingUnleashed](https://x.com/stakingcircle/status/1849828152349962250)**

### Speakers:

- **[Diogo Costa](https://x.com/diogoweb3)**: Head of Marketing @ [Renzo](https://x.com/renzoprotocol)

- **[Pedro Verdades](https://x.com/pedro_verdades)**: Core Contributor @ [Turtle.Club](https://x.com/turtleclubhouse)

- **[Tim Haldorsson](https://x.com/TimHaldorsson)**: Founder @ [Lunar Strategy](https://x.com/LunarStrategy)

- **[Sara Teixeira](https://x.com/saraflteixeira)**, Web3 Marketing Executive @ [ICN Protocol](https://x.com/ICN_Protocol)

### Featured Speakers:

- **[Adelia](https://x.com/0xindaquil)**, **[bByb](https://x.com/blockedknows)**, **[Emily](https://x.com/emilyxlai)**, **[Krysty](https://x.com/KrysiaKozak)**

### Index:

1. Social Media Managment for Defi Protocols

2. Differences Between Web3 vs Web3 Marketing 

3. Building and Maintaining Defi Communities

4. Content Creation Strategies

5. The Role of Intern Accounts and Team Personalities in Brand Building

6. Transparency and Education as PIllars of Community Trust

7. Final Thoughts on Community Growth and Ecosystem Collaboration

8. Closing Thoughts

## Social Media Management for DeFi Protocols

- Diogo discusses the importance of co-marketing with partners for higher user conversion:

"_[11:06] I just think that, you know, at least on Renzo, one thing that we've been focusing on a lot is co-marketing, especially because it allows us to attract users from our partners who we know are first of all token holders and, second, have an interest in these kinds of products. We end up increasing conversions by doing these targeted campaigns with partners._"

- Verdades highlights the need for an “explain like I’m five” approach in content:

"_[15:02] I agree on the LE5 or explain-me-like-I’m-five approach when it comes to social media. You need to ensure that users understand what we're talking about. Often, these kinds of DeFi products or protocols aren't easy to grasp._"

## Differences Between Web2 and Web3 Marketing

- Sara emphasizes consistency in user education and bridging trust:

"_[21:44] There’s a lot of hacks, a lot of gaps in knowledge, and we also need to provide deep educational content that allows users to better understand what is happening in the protocol and, importantly, how to stay safe in this space._"

- Krystyna highlights transparency in blockchain as a key differentiator:

"_[28:53] Well, I just joined, so maybe I can give a perspective from an analytics point of view. What I find super interesting...is the difference in access to data because, obviously, in Web3 and blockchain, everything is totally transparent._" 

## Building and Maintaining DeFi Communities

- BBYB shares insights on creating a central narrative or “character” for community unity:

"_[38:13] You saw maybe with classic examples like McDonald's back in the day, how they had the clown and built an entire marketing structure around it_"

- Diogo encourages fostering in-person relationships to strengthen community bonds:

"_[41:05] You can pretty much be aware of where the team is located. If you want to grab a coffee, lunch, wherever we are, let us know, you know, on Discord, Twitter – lunch or coffee is on us._"

- Adelia stresses the importance of team involvement and active participation:

"_[42:50] I just want to add one more point on basically showing up, right? I think showing up is half the battle won._"

## Content Creation Strategies

- Diogo underscores the need for simplifying technical explanations:

"_[13:28] One thing that we've been doing is focusing content on the benefits that are easy for the user to understand. Sometimes, for marketing teams, it's challenging to put ourselves in the user’s shoes._" 

- Tim discusses the blend of “memes and education” in reaching DeFi users:

"_[19:27] I think a key thing in the DeFi space is that by default, a lot of people are very skeptical. And I think what it comes down to is that DeFi is creative in coming up with new ways for yield._"

- Emily on combining storytelling with educational content to engage users:

"_[35:05] I think that’s something I personally hope to incorporate more – more storytelling, less technical information in my campaigns. I think that’s actually how marketing should evolve over time._" 

## Points Programs and Incentive Management

- Diogo notes challenges with long-term community management around points systems:

"_[59:50] I think protocols shouldn’t sell their soul to the devil to give investors a sellout or buyout once the token is live. Dumping on users who’ve been with them for two, three, four years isn’t the way._"

- Verdades emphasizes transparent communication with users regarding incentive structures:

"_[59:53] Transparency is really important when building a community... transparency about development goes a long way in building trust with the community._" 

## The Role of Intern Accounts and Team Personalities in Brand Building

- Loop Intern shares the value of intern accounts for informal communication and KOL outreach:

"_[50:19] We’ve gained a lot of traction from it – not just posting memes but doing calculations and things we can’t do on a main account. We do this through our intern, and connecting with KOLs is so much easier since we don’t have to be as formal._" 

- Diogo elaborates on how intern accounts add flexibility in sharing informal or humorous content:

"_[54:38] ...it’s helpful that we have these smaller accounts where we can build DeFi strategies for the protocols we’re connected with._" 

- Krystyna highlights the importance of active team engagement across personal accounts:

"_[1:00:48] So for community building and getting new users, make sure your team is active, and people at the core of what you’re doing are there. The community will follow them because they believe in and are inspired by them._"

## Transparency and Education as Pillars of Community Trust

- Tim emphasizes educating users on protocol safety as a way to combat skepticism in DeFi:

"_[19:07] I think a key thing in the DeFi space is that by default, a lot of people are very skeptical...explaining where yield is coming from, as well as explaining security audits and highlighting these features, because the underlying tone when I learn about a new DeFi project is, 'Are they going to run away with the money_" 

- Adelia discusses how educational content and transparency are essential in community engagement:

"_[23:44] When it comes to education, it’s about making sure we translate things into simple language so people can understand the potential and opportunities this represents._"

## Final Insights on Community Growth and Ecosystem Collaboration

- Gonzalo emphasizes the importance of personal branding for team members within Web3 communities:

"_[46:49] …the founders should be engaged. And I think that’s one of the most important strategies that’s come up recently in this space. And it’s really working._" 

- Tim notes how growth strategies vary across ecosystems and the importance of partnerships in smaller chains:

"_[55:36] A lot of niche DeFi projects in ecosystems like Polkadot, ICP, or Multiverse, Polygon need to use different strategies. They often look at the top products on Solana or Ethereum and then try to deploy that into a niche ecosystem. That doesn’t often work as well._"

## Closing Thoughts

- Emily shares a final perspective on community and product alignment:
"_[1:20:50] ...having that dialogue and conversation with people who are testing your product, using your product, or validating a roadmap if it’s not built yet. That’s really the crux of building a community._" 

- Inspirational Quote:
"_[1:21:21] Be yourself and be kind._"  :)




The Defi Marketing Unleashed AMA delved into effective Web3 marketing strategies, highlighting the balance between technical education and simplified messaging needed for mass adoption. DiveDive into the highlights to discover actionable insights on Web3 Marketing

Defi Marketing Unleashed AMA Recap

The “_Why Wrapped BTC Matters_” AMA explored the evolving landscape of Wrapped Bitcoin (wBTC) and its role in DeFi, highlighting recent custody controversies and the rise of alternatives like tBTC and cbBTC. wBTC continues to dominate, with 65% of wrapped Bitcoin used as collateral in major DeFi platforms, though MakerDAO’s recent move away from wBTC signals a shift in the market.

The discussion covered wBTC’s importance in unlocking Bitcoin’s utility within DeFi, the impact of custody changes, and the growing competition among new alternatives. Looking ahead, panelists predicted a move towards multi-custodian setups and increased diversification of Bitcoin-based collateral. Dive into the highlights to learn more about the future of wrapped Bitcoin in DeFi.

**X (Twitter) Spaces**: [Why Wrapped BTC Matters: Bridging Bitcoin and Defi](https://x.com/stakingcircle/status/1847246323457605923)

**Speakers**:

- **ApeGuru** ([X (Twitter)](https://x.com/ApeGurus)): Chief BUllish Officer @ ([Lynex](https://x.com/LynexFi))

- **João Simões** ([X (Twitter)](https://x.com/0xjnsimoes)): CEO & Co-Founder @ ([InceptionLRT](https://x.com/InceptionLRT))

- **Gonzalo Mendizabal** ([X (Twitter)](https://x.com/GMendizabal_)): KOL Manager @ ([Staking Circle](https://x.com/stakingcircle))

**Index**:
1. Highlights
2. Purpose and Importance of Wrapped Bitcoin
3. wBTC Custody Controversy
4. Emerging wBTC Alternatives
5. Impact on Defi Protocols
6. Future Outlook for Wrapped Bitcoin

## Highlights:

- wBTC remains dominant with **65% of wrapped Bitcoin** used as collateral in major DeFi platforms:

"_RAP BTC remains the dominant force in the market, with around 65% of all wrapped Bitcoin currently being used as collateral across major DeFi platforms like Aave. It's an essential part of the ecosystem due to its liquidity and deep integration._" – Staking Circle

- Recent custody changes sparked controversy, leading to emergence of alternatives like **tBTC** and **cbBTC**:

"_BitGo's decision to transfer RAP BTC's custody to a joint venture with BitGlobal has caused a stir in the community, leading to the rise of alternatives like tBTC and cbBTC. These competitors are gaining traction as the market becomes more cautious about centralization risks._" – Staking Circle

- MakerDAO stopped supporting wBTC, burning **$30 million** worth and shifting to cbBTC:

"_In response to the controversy, MakerDAO took a bold step by halting new borrowing against RAP BTC 
and burning $30 million worth of it. They've since shifted their focus to supporting cbBTC, signaling a significant shift in their approach._" – Staking Circle

- Future outlook suggests a move towards multi-custodian setups and increased competition in wrapped Bitcoin market:

"_Looking forward, we’re likely to see a broader move towards multi-custodian setups to address concerns over centralization. The wrapped Bitcoin market will also become more competitive, with new players emerging to challenge RAP BTC’s dominance._" – Staking Circle

## Purpose and importance of Wrapped Bitcoin:

- João explained wBTC brings Bitcoin to DeFi, adding composability and yield-generating opportunities:

"_The beauty of RAP BTC is that it brings Bitcoin into the DeFi ecosystem, where it gains composability and can generate yields. You no longer need to just hold Bitcoin in a wallet—you can put it to work in DeFi without leaving the Bitcoin network._" – João, InceptionLRT

- Ape Guru highlighted wBTC unlocks Bitcoin's utility beyond its own blockchain limitations:

"_RAP BTC is crucial because it unlocks Bitcoin's utility, allowing it to be used beyond the limitations of the Bitcoin blockchain. With RAP BTC, Bitcoin can be integrated into programmable smart contract ecosystems like Ethereum, expanding its potential significantly._" – ApeGuru, Lynex

- wBTC enables participation in DeFi without exiting Bitcoin positions:

"_One of the key benefits of RAP BTC is that it enables users to participate in DeFi while keeping their 
Bitcoin positions intact. You don’t have to sell your Bitcoin; instead, you can wrap it and use it as collateral or in liquidity pools, generating additional value._" – ApeGuru, Lynex

## wBTC custody controversy:

- BitGo announced plans to transfer wBTC management to a joint venture with BitGlobal:

"_BitGo recently announced plans to hand over RAP BTC management to a joint venture with BitGlobal, which raised concerns across the DeFi space. The move has sparked debates about centralization and transparency, with many questioning the motives and implications for RAP BTC’s future._" – Staking Circle

- Initial plan allocated 2 out of 3 multi-sig keys to BitGlobal, raising centralization concerns:

"_The original proposal by BitGo gave BitGlobal control of 2 out of 3 multi-sig keys, which would have allowed them to execute transactions independently. This raised immediate centralization concerns, as the power was concentrated in one entity, making the system more vulnerable._" – Staking Circle

- Updated arrangement involves 3 entities in different jurisdictions: Hong Kong, Singapore, and US:

"_After significant pushback from the community, BitGo updated the multi-sig arrangement to involve three different entities in separate jurisdictions—Hong Kong, Singapore, and the US. This shift helps mitigate centralization risks and provides an extra layer of security._" – ApeGuru, Lynex

- Ape Guru argued the new multi-jurisdiction setup mitigates risks of a centralized third party:

"_The new multi-jurisdictional setup significantly reduces the risks associated with having a centralized third party. By spreading the control across multiple regions, you eliminate the possibility of a single point of failure, which was a major concern with the initial proposal._" – ApeGuru, Lynex

## Emerging wBTC alternatives:

- tBTC (Threshold BTC) gaining adoption, particularly in Asia:

"_We’re seeing tBTC, a decentralized alternative, gaining serious adoption, especially in Asia. It’s being recognized for its transparency and its ability to bring a trustless wrapped Bitcoin option to the market, making it a strong contender to RAP BTC._" – Staking Circle

- cbBTC (Coinbase BTC) launched, backed by Coinbase's institutional presence:

"_Coinbase has also entered the wrapped Bitcoin space with cbBTC, leveraging its institutional presence to bring a more centralized but highly trusted option. Backed by a regulated entity, cbBTC could capture a different segment of the market that values institutional backing._" – Staking Circle

- Kraken announced plans for KBTC:

"_Kraken is planning to launch its own version, KBTC, further expanding the landscape of wrapped Bitcoin options. With major exchanges stepping into the game, we’re likely to see even more competition in the near future._" – Staking Circle

- Ape Guru expressed preference for tBTC due to its decentralized, transparent nature:

"_tBTC stands out because it is fully decentralized and transparent, which aligns with the core values of crypto. In my view, this makes it the best option for those who prioritize decentralization over institutional backing._" – ApeGuru, Lynex

- Team noted potential liquidity fragmentation due to multiple alternatives:

"_With all these new alternatives emerging, there’s a real risk of liquidity fragmentation. Having multiple Bitcoin derivatives could split liquidity across DeFi, making it harder for protocols to maintain deep pools for collateral._" – ApeGuru, Lynex

## Impact on DeFi protocols:

- MakerDAO decided to halt new borrowing against wBTC and burned $30 million worth:

"_MakerDAO took decisive action, stopping all new borrowing against RAP BTC and burning $30 million of it. This shows a clear loss of trust in RAP BTC’s long-term stability following the custody changes._" – Staking Circle

- MakerDAO shifted support to cbBTC:

"_In response to the RAP BTC controversy, MakerDAO has shifted its support to cbBTC, which they believe offers a more secure and institutionally-backed alternative. This could lead to further shifts in the DeFi ecosystem as other protocols may follow._" – Staking Circle

- Aave still uses wBTC as one of its largest collateral types:

"_Despite the controversy, Aave continues to support RAP BTC as one of its largest collateral types. It’s still deeply embedded in the DeFi space, and its liquidity makes it hard to replace in the short term._" – Staking Circle

- DeFi protocols may start building liquidity on new Bitcoin assets to hedge against wBTC losing dominance:

"_We might see DeFi protocols gradually building liquidity on alternative Bitcoin assets to hedge against the possibility of RAP BTC losing its dominance. Diversifying collateral could help protect the protocols from any major disruptions in the future._" – ApeGuru, Lynex

## Future outlook for wrapped Bitcoin:

- wBTC likely to maintain dominance in short term due to current market share:

"_In the short term, RAP BTC is likely to maintain its dominance due to its existing market share and strong liquidity. It’s entrenched in the DeFi system, but competition is on the rise._" – ApeGuru, Lynex

- Trend towards multi-custodian setups and increased competition expected:

"_We’re going to see more multi-custodian setups and an increase in competition as protocols look for ways to reduce centralization risks. This will ultimately lead to a more decentralized and secure DeFi environment._" – Staking Circle

- DeFi protocols likely to diversify Bitcoin-based collateral to reduce reliance on single custodian:

"_As part of this trend, we expect DeFi protocols to diversify their Bitcoin-based collateral to avoid over-reliance on a single custodian. Having multiple options reduces risk and helps secure the ecosystem._" – ApeGuru, Lynex

- Potential for new Bitcoin DeFi opportunities emerging from the current situation:

"_This shake-up is creating opportunities for new Bitcoin-based DeFi solutions to emerge. With alternatives like tBTC and cbBTC gaining traction, the landscape is primed for innovation._" – ApeGuru, Lynex

- Retail users advised to monitor adoption of alternatives, regulatory scrutiny outcomes, and governance votes on DeFi platforms:

"_For retail users, it’s crucial to stay updated on the adoption of these new alternatives, as well as any regulatory outcomes and governance votes on DeFi platforms. These factors will shape the future of wrapped Bitcoin in the space._" – Gonzalo, Staking Circle



This AMA explored wBTC's role in DeFi, the recent custody changes, and the rise of competitors like tBTC and cbBTC. Dive into the highlights to explore the discussion on how these shifts may impact DeFi, focusing on decentralization, collateral use, and the future of wrapped Bitcoin. 

Why Wrapped BTC Matters AMA Recap

### TL;DR:

- _wBTC Custody Shift_: BitGo’s transfer of wBTC management to a new joint venture has raised concerns about centralization and regulatory risk.
- _Competitor Reactions_: Decentralized alternatives like tBTC and cbBTC are gaining traction, aiming to challenge wBTC’s dominance.
- _DeFi Impact_: With Wrapped Bitcoin deeply integrated into major DeFi protocols, any issues could significantly destabilize the space.

The decentralized finance (DeFi) ecosystem has been facing significant changes and potential risks tied to Wrapped Bitcoin (wBTC) as BitGo announced plans to transfer the management of wBTC to a joint venture with BiT Global. As one of the most critical bridges between Bitcoin (BTC) and DeFi, wBTC holds a pivotal role in various protocols, including lending platforms and decentralized exchanges. Any adjustments to its custody setup could have serious implications across the DeFi landscape.

This article dives into what’s happening with Wrapped Bitcoin, the risks involved with the new custody structure, and how competitors like tBTC and Coinbase’s cbBTC are leveraging this moment to gain market share. We'll also analyze wBTC's current dominance and what lies ahead for wrapped Bitcoin products.

## What is wBTC and Why does it Matter to DeFi?

wBTC is an ERC-20 token that represents Bitcoin on EVM Compatible chains, such as Ethereum. It was created in 2019 to enable Bitcoin holders to participate in the growing DeFi ecosystem without needing to sell their BTC. Instead, users can wrap their BTC into wBTC, gaining the ability to use it in several Defi activities, such as: using it as collateral in lending, yield farming, or for liquidity privisioning on Ethereum and other chains.

Here are some key metrics from wBTC as it stands: 

- **Current Wrapped BTC Supply**: _[150K](https://dune.com/queries/1105409/1888729)_ wBTC as of October 2024 (roughly $9.3 billion).

- **Network distribution**: Nearly _[90%](https://dune.com/queries/2199109/3657113)_ of the Wrapped Bitcoin supply is located on the Ethereum network.

The most popular use case for wBTC in DeFi is as collateral for lending, representing **_[40% of its overall usage](https://dune.com/queries/3382407/5684824)_**. Given that wBTC stands as a major pillar across lending platforms, any destabilization within wBTC’s custody could lead to significant disruptions in the DeFi space.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_f0ab775748.png)
_([Source](https://dune.com/21co/wbtc))_

For instance, Aave, one of the leading lending platforms in DeFi, holds significant amounts of wBTC as collateral. On Aave V3 on Ethereum, the asset is currently the most used, with roughly [$3,3 billion deposited and $3 billion borrowed against it](https://dune.com/queries/3214653/5374251). As a core asset for collateral, any issues with wBTC could severely impact Aave and similar lending platforms, causing ripple effects throughout the broader DeFi ecosystem.

## BitGo’s Custody Shift: Key Concerns

BitGo announced its intention to transfer wBTC’s custody to a "multi-jurisdictional and multi-institutional" joint venture with BiT Global, an entity associated with the TronDAO ecosystem. Under the original proposal, BitGo and BiT Global were to hold the keys to the cold-storage multi-signature wallet, with BiT Global controlling two out of the three keys.

### Major Concerns Raised:

1. **Centralization**: The idea of giving BiT Global control over two keys posed a significant centralization risk. If one entity controls most of the keys in a multi-sig setup, it contradicts the decentralized ethos that DeFi relies on.

2. **Regulatory Risks**: Justin Sun, the founder of TronDAO, is a major figure in the crypto world. His involvement in wBTC’s custody raised fears about potential regulatory actions on such an influencial indivdual, which could destabilize the entire wBTC ecosystem.

3. **Trust Issues**: The success of wBTC depends heavily on community trust. If this trust is eroded due to centralized control or regulatory uncertainty, users might look to switch to other BTC-pegged tokens, causing a shift in liquidity and TVL (Total Value Locked) across DeFi protocols.
In response to these concerns, BitGo revised its custody structure, introducing BitGo Singapore Ltd. as a third party in the multi-signature setup. Now, three entities—BitGo Inc., BiT Global, and BitGo Singapore Ltd.—each hold one key in a 2-of-3 multi-sig arrangement.

While this alleviates the concern of one institution holding excessive control, questions around BiT Global’s role and the transparency of the custody arrangement remain unresolved.

### Real-World Impacts on DeFi Protocols

The announcement of BitGo’s custody changes has already led to significant reactions in the DeFi landscape:

- **Sky** (previously MakerDAO) considered halting new borrowing against wBTC due to the perceived risks associated with the custody model. However, the proposal did not pass, so no official action was ultimately taken.

- Rival products like **tBTC** and Coinbase’s **cbBTC** have gained traction as users and protocols look for alternatives to centralized wrapped BTC products.

## Competitors Taking Advantage: tBTC and cbBTC

One of the most notable reactions to Wrapped BTC's uncertainty is the rise of competing wrapped Bitcoin solutions. **tBTC**, a decentralized alternative to wBTC, has been actively marketing itself as a more trust-minimized solution. Threshold Network, which operates tBTC, launched a $150K prize pool to incentivize wBTC holders to migrate their holdings to tBTC. Their platform enables users to swap wBTC for tBTC while earning rewards, presenting an attractive option for those looking to distance themselves from centralized solutions.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_b0016b3324.png)
_Threshold Network website for conversion between wBTC and tBTC_ 

“_tBTC is a decentralized, trust-minimized alternative to wBTC, offering full transparency and no central custodianship_” Threshold Network stated in their campaign. The launch of this incentive program highlights how tBTC is capitalizing on the doubts surrounding wBTC’s new custody structure.

Similarly, **Coinbase’s cbBTC** has entered the scene as another competing wrapped Bitcoin product. 

Backed by one of the most reputable exchanges globally, cbBTC claims to offers a secure, centralized alternative. As wBTC’s custody model raises concerns, cbBTC is positioning itself as a reliable option for institutions and retail users alike, with the trust and security provided by Coinbase.

## Wrapped Bitcoin’s Continued Dominance

Despite the controversy surrounding wBTC, it remains the dominant wrapped Bitcoin product in the market. Metrics as of September 2024 show:

- **_[123,000+](https://dune.com/queries/4064051/6857818) weekly transactions_**: wBTC’s weekly transaction activity has hit all-time highs, reflecting its entrenched role in the DeFi space.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_9ac9a910e4.png)
_([Source](https://dune.com/queries/4064051/6857818))_

- **_[~70%](https://dune.com/queries/2221281/3657540) market share_**: wBTC controls a substantial portion of the wrapped Bitcoin market, with roughly 150 BTC wrapped under the wBTC token.

Wrapped Bitcoin’s deep liquidity, well-established integration into DeFi protocols, and user inertia have helped it maintain its position. However, with over 20 competitors now in the market, the landscape could shift if BitGo’s new custody model doesn’t restore trust.

## Unanswered Questions and Future Risks

While BitGo’s revised custody structure has addressed some immediate concerns, several key issues remain:

- **BiT Global’s Role**: BiT Global still plays a significant role in wBTC’s custody, raising questions about regulatory risk and its future influence.

- **Regulatory Compliance**: The multi-jurisdictional setup (U.S., Hong Kong, Singapore) introduces uncertainty about oversight. How each entity will handle regulatory scrutiny remains unclear.

- **Audit and Transparency**: The DeFi community has called for more transparency. How will ongoing audits be conducted, and how will the community be informed about any changes?

- **Emergency Procedures**: What contingency plans are in place if a key holder faces regulatory action or a breach? These questions are critical to the future stability of wBTC in the DeFi ecosystem.

## Broader Implications for DeFi

The wBTC situation has broader implications for DeFi as it highlights a core vulnerability: reliance on centralized entities. Despite DeFi’s decentralized ethos, products like wBTC depend on centralized custody solutions for bridging assets like Bitcoin into the Ethereum ecosystem. This reliance opens up risks that decentralized competitors, like tBTC, are looking to address.

### Key Takeaways for DeFi:

- **Decentralized Solutions**: The wBTC custody controversy may accelerate the development of decentralized Bitcoin-wrapping solutions. If products like tBTC can match wBTC’s liquidity and trust, we could see a shift away from centralized solutions.

- **Collateral Diversification**: With Sky (formerly known as MakerDAO) having discussed but not implemented a temporary halt on new wBTC-based loans, there remains an opportunity for DeFi protocols to explore alternative BTC collateral options. This diversification could create more resilience in DeFi's reliance on wrapped BTC.

- **Increased Scrutiny**: The situation is likely to lead to more rigorous community vetting of wrapped asset custodians, not only for Bitcoin but for all wrapped assets in the DeFi space.

## Custody and Decentralization in DeFi

As the wBTC custody shift unfolds, it serves as a reminder of the importance of custodial transparency and decentralization in DeFi. While wBTC remains dominant, its future is uncertain, especially as alternatives like tBTC and cbBTC gain ground.

The situation underscores the need for DeFi protocols to continuously reassess the risks associated with wrapped assets and their custody solutions. Whether or not wBTC can retain its dominance will largely depend on how BitGo’s new custody model is perceived by the community—and whether decentralized solutions can rise to meet the demand for greater security and trust.

The coming months will be crucial in shaping the future of wrapped Bitcoin and its role within DeFi


Dive into the ongoing transition of wBTC custody under BitGo and its implications for DeFi. We'll examine the concerns raised by the new joint venture, competitor responses, and the broader effects on wrapped Bitcoin’s dominance in the market.

wBTC Under Fire: Examining the Fallout of BitGo’s Custody Shift

As we head into Q4, the crypto markets are abuzz with excitement, and the term "Uptober" is being tossed around by enthusiasts, referencing historically bullish trends for Bitcoin and the broader market during this period. In the past, Q4 has been known to trigger significant price movements, and several upcoming catalysts are set to influence the market further. Key factors, such as central bank rate cuts, the recent launch of Ethereum and Bitcoin ETFs, and the U.S. elections, could have a profound impact not just on crypto assets like Bitcoin and Ethereum but also on the overall DeFi ecosystem.

This article aims to explore how these macroeconomic and crypto-specific events could impact staking, yield farming, and the overall DeFi landscape, especially as we approach what is expected to be a pivotal quarter for digital assets.

## TL;DR:
- _Bitcoin's Q4 Bullish Trends_: Historically, Bitcoin sees an average return of ~81% in Q4, which often spills over into DeFi, increasing liquidity and activity on staking and yield platforms.

- _Central Bank Rate Cuts_: With recent and anticipated rate cuts, liquidity could flow into higher-yielding DeFi assets, boosting protocols like AAVE and Compound.

- _ETFs and Institutional Capital_: The launch of ETH and BTC ETFs may lead to institutional capital flowing into DeFi, potentially transforming this market cycle by integrating Real World Assets (RWAs).

- _FTX Compensation and U.S. Elections_: FTX's $16B compensation could bring liquidity back to DeFi, while the upcoming U.S. elections may drive volatility or offer regulatory clarity, impacting market sentiment.

## Historical Bitcoin Q4 Trends and Its Impact on DeFi:

Historically, Bitcoin has shown an average return of **~81% in Q4 since 2013**, making this quarter particularly exciting for crypto enthusiasts. This "Uptober" phenomenon has often led to an influx of capital into the market, which tends to spill over into the broader crypto ecosystem, including DeFi protocols. When Bitcoin rallies, investors typically rotate capital into altcoins and DeFi platforms, seeking yield and liquidity.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_634f8a1693.png)
_Bitcoin Quarterly Returns Since 2013 ([Source](https://www.coinglass.com/today))_

For the DeFi space, this could mean increased liquidity, heightened user participation, and more activity on staking platforms as investors look to earn yields while taking advantage of the rising market. Historically, when Bitcoin enters a bull phase, the TVL (Total Value Locked) in DeFi protocols also climbs, reflecting the influx of capital.

## Central Bank Rate Cuts & the Fed’s Moves: What It Means for DeFi:

Major central banks, including the Federal Reserve, have been cutting interest rates to stimulate the economy, and there’s speculation that further cuts could occur before the year ends. In September, **the Fed cut rates by 50 basis points (bps)**, which could be the first in a series of cuts aimed at bolstering economic activity. As more liquidity enters the market due to these cuts, a portion of that capital is likely to flow into higher-yielding assets like cryptocurrencies and DeFi protocols.

Lower borrowing costs in traditional finance (TradFi) can drive more investors to explore DeFi lending platforms like AAVE and Compound, where they may be able to earn better returns. As borrowing rates fall in TradFi, DeFi platforms could see an influx of capital as investors search for yield. This increased capital could result in a surge of liquidity pools, higher TVL, and increased activity in staking and yield farming protocols.

For a deeper dive into how central bank rate cuts could shape DeFi, check out our post about it: [Interest rates in Defi Drop: What Does This Mean for Staking & Yield?](https://www.stakingcircle.com/research/all-about-defi-interest-rates/)

## ETH & BTC ETFs: A New Bullish Driver for DeFi:

The launch of Ethereum ETFs alongside Bitcoin ETFs is set to be a major catalyst for Q4, offering institutional investors an accessible way to gain exposure to crypto without holding the actual assets. 

This new development introduces a fresh influx of capital into the crypto market, which could trickle down into DeFi protocols. Unlike previous bull markets, this cycle may see institutional capital moving directly into DeFi through staking and yield farming, thanks to the convenience and legitimacy ETFs provide. As institutional interest grows, these products could fuel a more sustainable and structured bull market compared to previous speculative cycles.

Furthermore, this ETF availability brings up the intriguing possibility of tokenized ETFs being integrated into DeFi protocols, marking a shift toward Real World Assets (RWAs). Tokenizing ETFs could enable their use in DeFi markets, allowing them to be staked, used for yield farming, or even as collateral for lending, creating new liquidity avenues. If realized, this evolution would blend traditional finance with decentralized finance, potentially setting this market cycle apart from those that came before.

## FTX Compensation: A New Wave of Liquidity in DeFi?

The news that FTX is planning to compensate its users with a massive **$16 billion in stablecoins and cash** is creating a buzz. This could reintroduce significant liquidity back into the crypto market, particularly among users who were locked out of their funds following FTX's collapse. For the DeFi ecosystem, this compensation package could mean a fresh injection of capital as these users potentially reinvest their recovered funds into DeFi protocols.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_2bdb1c7fca.png)
_FTX Creditor Recovery Summary_ 

Increased liquidity from these compensated users could drive more activity on staking platforms and yield-generating DeFi protocols, boosting both TVL and overall market participation. This influx of capital could play a crucial role in propelling DeFi into a stronger Q4, particularly as these users seek yield to make up for lost time and profits.

## U.S. Elections: A Wild Card for DeFi?

The U.S. elections are coming up in November, and this could introduce volatility not just in traditional financial markets but also in the crypto space. Historically, political events have had significant implications for market sentiment, and crypto is no exception. Investors may seek refuge in decentralized assets like cryptocurrencies during times of political uncertainty, driving more attention to DeFi platforms.

If the outcome of the elections brings regulatory clarity for DeFi, it could act as a bullish catalyst for further institutional adoption. Alternatively, new regulatory hurdles could emerge, potentially stifling growth. However, decentralized systems are often seen as a hedge against political uncertainty, and this could drive more capital into staking and yield farming protocols.

## Positioned for a Bullish Q4?

With all of these macroeconomic and crypto-specific catalysts in place, Q4 is shaping up to be a potential turning point for the crypto markets. The DeFi ecosystem, particularly staking and yield farming protocols, could offer some of the best opportunities for investors looking to capitalize on the bullish sentiment.

Although October didn’t begin with the explosive bullish momentum that some had hoped for, this initial dip mirrors patterns seen in past cycles. Historically, we've witnessed early corrections in Q4, followed by strong upward market movements as the quarter progresses. Whether this pattern will repeat itself in 2024 remains to be seen, but with several macroeconomic and crypto-specific catalysts on the horizon, the potential for a major market shift is certainly still on the table. Time will tell if we see a reversal that leads to the significant gains often associated with Uptober.
[Be sure to explore Staking Circle for more insights on how to navigate DeFi and capitalize on the opportunities in staking and yield generation.](https://www.stakingcircle.com/research/)



Explore how macroeconomic and crypto-specific events could impact staking, yield farming, and the overall DeFi landscape, especially as we approach what is expected to be a pivotal quarter for digital assets.

Uptober: Crypto Q4 Catalysts and Their Impact in DeFi

The "_Battle of Yields: LSTs vs LRTs_" AMA brought together experts from YieldNest, Meta Pool, and StakeWise to discuss the evolving landscape of Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs). The panel explored the differences between LSTs and LRTs, their current yield generation, contributions to crypto-economic security, and their integration into the DeFi ecosystem.

The conversation also touched on regulatory and security challenges, with panelists emphasizing the need for transparency and decentralization. Looking ahead, they highlighted significant innovation opportunities in both LST and LRT spaces, predicting growth and institutional interest over the next 12 months. Dive into the highlights below to explore the key insights and future trends discussed in the session.

**X (Twitter) Spaces**: [Battle of Yields: LSTs vs LRTs](https://x.com/stakingcircle/status/1839636163121820063)

**Speakers**:

- **Amadeo Brands** ([X (Twitter)](https://x.com/amadeobrands)): Co-Founder @ ([YieldNest](https://x.com/YieldNestFi))

- **Claudio Cossio** ([X (Twitter)](https://x.com/ccossio)): Co-Founder @ ([Meta Pool](https://x.com/meta_pool))

- **Kirill Kutakov** ([X (Twitter)](https://x.com/kiriyha1)): Co-Founder @ ([StakeWise](https://x.com/stakewise_io))

**Index**:

1. Liquid Staking Tokens (LSTs) vs Liquid Restaking Tokens (LRTs) Explained
2. Current State of Restaking Rewards
3. Restaking Contribution to Crypto-Economic Security
4. Defi Composability: LSTs vs LRTs
5. Regulatory and Security Challenges
6. Future Outlook for LSTs and LRTs

## LSTs and LRTs Explained:

The panel provided a concise explanation of Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs), outlining their purpose and how they function within the DeFi ecosystem.

- **Claudio (Meta Pool)**: "_LSTs accrue value over time, and they offer more than just staking rewards. You can use them as collateral or in liquidity provision. On the Ethereum side, for instance, our LST accrues value every second, calculated without needing an oracle_."

- **Kirill (StakeWise)**: "_At Stakewise, we allow permissionless LST minting for individual node operators. This means that anyone running a node can mint an LST to make their stake liquid, offering unique flexibility compared to other protocols where nodes are operated by the DAO_."

## Current State of Restaking Rewards:

The panelists highlighted the reality that restaking protocols currently offer higher yields through points rather than real yield, with a focus on EigenDA and the potential for growth in this space.

- **Amadeo (YieldNest)**: "_No restaking protocol is currently generating native yield. Most are distributing points rather than actual staking rewards. This is a common issue across the board, though we’re hopeful more real yield will develop_."

- **Claudio (Meta Pool)**: "_EigenDA is currently the only service distributing any meaningful rewards, though they’re still small. Most rewards in the space are still speculative or based on point distribution rather than real, earned yield_."

- **Kirill (StakeWise)**: "_LRTs are generating higher yields, but this is mainly through points and token distributions. Real yield is still something the space is striving for, and it’s important to clarify that to users_."

## Restaking's Contribution to Crypto-Economic Security:

The discussion also covered how restaking contributes to the broader crypto-economic security and the potential for this model to support off-chain applications.

- **Amadeo (YieldNest)**: "_Restaking is a primitive that allows you to reuse economic security from Ethereum, extending it to other off-chain applications. However, we still need more work to realize the potential of real yield in restaking_."

- **Kirill (StakeWise)**: "_The durability of crypto-economic security from restaking remains unproven. Slashing mechanisms and how restaked capital is handled are still key questions we need to answer_."

- **Claudio (Meta Pool)**: "_AVS services could help bootstrap new protocols and fintech applications, providing additional crypto-economic security. But for now, these remain more theoretical than practical in most cases_."

## DeFi Composability: LSTs vs LRTs:

The conversation then shifted to how LSTs and LRTs compare in terms of composability and integration in the DeFi space, with a consensus that LSTs currently lead in this area, particularly with tokens like Wrapped stETH.

- **Kirill (StakeWise)**: "_LSTs have better composability in DeFi, especially Wrapped stETH. It’s one of the few LSTs that’s accepted as collateral on multiple platforms, including exchanges and options trading platforms. LRTs, though, are gaining ground in terms of yield_."

- **Claudio (Meta Pool)**: "_LSTs are more established. They’ve had 2-3 years of DeFi integrations, which has given them a compositional advantage. LRTs are newer but are catching up fast due to their higher yield potential_."

- **Amadeo (YieldNest)**: "_We expect significant innovation in derivative products and DeFi composability over the next 12 months. There’s a lot of opportunity to create new forms of value within the space_."

## Regulatory and Security Challenges:

The panelists identified that regulatory clarity and improved security perceptions are crucial for further adoption of LSTs and LRTs, particularly by institutions.

- **Kirill (StakeWise)**: "_The lack of regulatory clarity is preventing broader institutional adoption of LSTs. We need fewer hacks, fewer key compromises, and more security improvements to attract institutions. ConsenSys and MetaMask are leading the charge here_."

- **Amadeo (YieldNest)**: "_Many restaking protocols are still centralized, operating with upgradeable contracts controlled by multisigs. It’s essential that the industry moves toward greater transparency and decentralization_."

- **Claudio (Meta Pool)**: "_Transparency about risks and protocol fees is critical. We need to ensure that users understand what they’re getting into, and that includes educating them about potential smart contract risks_."

## Future Outlook for LSTs and LRTs:

The panelists concluded by offering their predictions for the next 12 months, with each seeing significant innovation and growth in both LST and LRT spaces, especially with the rise of institutional interest in staking.

- **Kirill (StakeWise)**: "_I hope to see improved security perceptions and regulatory clarity for LSTs within the next 12 months. If real yield emerges in the LRT space, I expect LSTs will need to adapt quickly, possibly repurposing themselves into LRTs to remain competitive_."

- **Amadeo (YieldNest)**: "_The next year will see an explosion of derivative products in DeFi. I’m especially bullish on Ethereum Layer 1 and its capacity to build out the next generation of financial products_."

- **Claudio (Meta Pool)**: "_We’re bullish on LSTs and plan to launch a multi-chain liquid staking index in Q1 2025. This will abstract away the complexity of managing multiple wallets and provide a new layer of composability for users_."



In the Battle of Yields: LSTs vs LRTs AMA, industry leaders from YieldNest, Meta Pool, and StakeWise discussed yield generation, crypto-economic security, DeFi composability, and the future of Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs). Deep dive into the full recap here

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Battle of Yields: LSTs vs LRTs AMA Recap

As the decentralized finance (DeFi) industry evolves, Ethereum's shift to Proof-of-Stake (PoS) allowed liquid staking to gain significance. Liquid Staking Tokens (LSTs) have transformed how users interact with their staked assets, enabling liquidity while preserving the exposure to staking rewards. Simultaneously, innovations such as EigenLayer's restaking platform have led to the emergence of Liquid Restaking Tokens (LRTs), providing further avenues to increase yield potential for DeFi users.

While staking and liquid staking are already by now well-understood concepts, the introduction of restaking and liquid restaking brings deeper implications for the overall DeFi ecosystem. This article will examine the nuances, benefits, risks, and future prospects of LSTs and LRTs, providing an in-depth comparison of their impact on the network, user yields, and ecosystem development.

## From Staking to Liquid Staking and LSTs

### What is Staking?

Staking has evolved into a critical component of blockchain networks such as Ethereum, in which users lock their assets to help secure the network and validate transactions. In exchange, stakers receive incentives based on the amount staked and the duration of their commitment.

The locked assets serve a dual purpose: they ensure the staker’s loyalty to the network while also reducing the likelihood of malicious behavior, as any improper activities can result in slashing (partial loss of locked funds). This mechanism not only assures network security, but it also aligns financial incentives among participants and promotes the blockchain’s long-term stability.

### What is Liquid Staking?

Liquid Staking disrupted this concept by enabling stakers to retain liquidity through Liquid Staking Tokens (LSTs). When users stake assets (like ETH on the Ethereum Network), they receive LSTs in return, representing the underlying position and their right to rewards.

This allows participants to simultaneously stake assets, receive network rewards, while leveraging the liquidity of the derivative tokens in various DeFi strategies and protocols. Liquid Staking Tokens (LSTs) such as stETH from Lido have transformed how users manage their capital, significantly increasing capital efficiency.

## The Significance of Liquid Staking

As of right now, liquid staking stands as the **singular largest DeFi sub-sector** in terms of Total Value Locked (TVL), with [approximately $45 billion](https://defillama.com/categories) in TVL across various networks and protocols. This makes it the dominant force in DeFi, outpacing other sectors such as lending, decentralized exchanges,yield and others. This growth further emphasizes the trust users place in liquid staking solutions as they look for balance between staking rewards and maintaining liquidity in the broader DeFi market.

On the Ethereum network, approximately **31% of all staked ETH** is allocated through liquid staking protocols, showcasing the increasing preference for liquidity and capital efficiency among Ethereum stakers. Of this, Lido, a leading liquid staking protocol, accounts for roughly 28% of all staked ETH, highlighting its critical role in the liquid staking ecosystem.

This shift toward liquid staking solutions reflects not only individual stakers but also institutional investors seeking to maximize returns while retaining the flexibility to further participate in Defi strategies.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_17d852f6d2.png)
_Amount of ETH staked by Category ([Source](https://dune.com/hildobby/eth2-staking))_

Overall, **28.19% of the total ETH supply** is now staked, further emphasizing the strong trust in Ethereum’s Proof-of-Stake mechanism. Liquid staking, with its added benefits of liquidity and composability, continues to capture an increasing share of this staked capital, solidifying its position as a dominant sub sector in this space.

The combination of expanding validator participation and the rising proportion of staked ETH in liquid protocols points to a future where liquid staking will become even more integral to the broader DeFi landscape. As decentralized infrastructure continues to mature and more participants enter the ecosystem, liquid staking is set to maintain its trajectory as a core driver of growth and innovation.

## The Emergence of Restaking, Liquid Restaking, and LRTs

### What is Restaking?

**Restaking** extends traditional staking by allowing users to restake assets they've already staked to secure multiple services. This concept, pioneered by EigenLayer, enables re-stakers to secure not only the underlying blockchain network but also additional decentralized applications and services, such as layer 2 solutions or oracles. Restaking further increases capital efficiency for validators, offering additional security layers and revenue streams without requiring unstaking. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_d883cdc7ba.png)
_Restaking Workflow ([Source](https://www.linkedin.com/pulse/restaking-explained-akash-kumar-jha-terwf/))_

This innovation supports the scaling of decentralized ecosystems by using existing staked capital to secure more than one network or service, a concept popularized as Security-as-a-Service.

### What is Liquid Restaking?

Liquid Restaking takes restaking a step further by adding liquidity through Liquid Restaking Tokens (LRTs). Users can restake their Liquid Staking Tokens (LSTs) to mint LRTs, which retain liquidity while outsourcing security to multiple networks and protocols. This model increases yield opportunities for re-stakers by allowing them to earn rewards across various protocols, all while maintaining access to their capital for DeFi strategies. LRTs amplify restaking’s flexibility, enabling stakers to secure multiple services with liquid assets.

## The Rise of Restaking in DeFi

Restaking and liquid restaking have been among the fastest-growing DeFi sub-sectors in 2024, driven by protocols like **EigenLayer**. As a pioneering force in the restaking landscape, EigenLayer allows users to restake Ethereum (ETH) or Liquid Staking Tokens (LSTs) such as Lidos stETH, securing multiple Active Validator Services (AVSs) and earning additional rewards. 

By leveraging Ethereum’s existing validator set, EigenLayer boosts the security of layer 2 solutions, oracle networks, and other decentralized services while reducing fragmentation in trust networks. As of now, the platform has over **[135,547 unique depositors](https://dune.com/hahahash/eigenlayer)**, reflecting its growing market dominance.

Symbiotic, another emerging player, focuses on maximizing yields through a modular restaking activities. By offering cross-chain opportunities and risk management features, Symbiotic provides a different model for liquid restaking.

Currently, **[7.8% of the staked ETH supply](https://dune.com/hildobby/eth2-staking)** is being restaked throughLiquid Restaking protocols, showcasing the expanding role of restaking in the DeFi space. The sector’s rapid growth is underscored by its strong market interest, with protocols like Etherfi and Puffer Finance leading the charge. Etherfi alone has amassed over **$6 billion in TVL**, indicating the broad adoption of multi-layered staking models in DeFi.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_ae171ad474.png)
_Growth of Liquid Restaking Protocols Since April 2023 ([Source](https://defillama.com/protocols/Liquid%20Restaking))_

## The Battle of Yields: LSTs vs. LRTs

The primary distinction between Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs) revolves around how they generate yield. LSTs rely on the native staking rewards from their underlying assets, for example: The Ethereum’s Proof of Stake (PoS) chain. This yield mechanism is well-established, reliable, and somewhat predictable returns, reflecting the stability of Ethereum’s PoS structure. For example, tokens like stETH allow users to earn staking rewards while maintaining liquidity for other DeFi activities, such as lending on AAVE or providing liquidity on Curve Finance.

On the other hand, LRTs introduce a dual-yield design, increasing the potential returns by incorporating an additional layer of staking. By restaking LSTs, users can earn not only the native staking rewards but also extra yields through Active Validator Services (AVSs). These AVSs provide services to various decentralized applications, such as Layer 2 solutions, bridges, and oracles, leveraging restaked assets for additional security. This compounded reward structure offers a higher yield potential, attracting risk-tolerant users seeking greater returns.

However, while LRTs have higher yield potential, they are still emerging as a more complex and riskier solution. For instance, on EigenLayer, a leading restaking protocol, there are currently 24 Active AVSs, a relatively small number given the protocol's ambition. This limited range of AVSs means that while restaking has the potential to generate higher yields, the ecosystem is still developing, and risks associated with immature infrastructures are present.

For those keen to dive deeper into the evolving dynamics of Liquid Staking and Restaking, join us for our **[X (Twitter) Space: _Battle of Yield: LSTs vs LRTs_](https://x.com/stakingcircle/status/1838920158313865722)**, where leading figures from both the Liquid Staking and Restaking spaces will debate the future of these DeFi sub-sectors. This is an essential discussion for anyone interested in staking innovations and maximizing yield in DeFi!

## Future Prospects: How Staking/Liquid Staking Is Evolving

Staking and liquid staking are rapidly evolving as DeFi continues to innovate. Restaking frameworks like EigenLayer and Symbiotic are pushing the boundaries of what staking can achieve, adding new layers of security and yield to the ecosystem.

An exciting development is the entry of [Bitcoin into the restaking conversation](https://www.stakingcircle.com/research/bitcoin-staking/). With Bitcoin’s immense liquidity and the introduction of layer 2 scaling solutions, BTC can now participate in staking and restaking, providing additional security to decentralized applications. This could unlock vast amounts of liquidity for DeFi protocols and significantly enhance the security of layer 2 networks.

The future of staking lies in its ability to adapt to new market conditions and offer users both flexibility and higher yields. As the staking landscape evolves, we are likely to see increased competition between LST and LRT protocols, further boosting innovation in DeFi.

## Conclusion: A Bright Future for Yield Seekers

The shift from traditional staking to more advanced models involving LSTs and LRTs marks a significant transformation in the DeFi landscape. Liquid staking has unlocked capital efficiency and composability, while restaking introduces new yield opportunities and enhances network security. As the DeFi sector grows, both liquid staking and restaking will play pivotal roles in shaping the future of decentralized finance.
Investors and participants in DeFi should keep a close eye on the evolving dynamics of LSTs and LRTs, making informed decisions based on their risk tolerance, yield expectations, and understanding of the underlying protocols.

Join our community at Staking Circle as we explore these innovations and help the next wave of DeFi users navigate this dynamic and lucrative space.



Discover how Liquid Staking Tokens (LSTs) and Liquid Restaking Tokens (LRTs) are transforming DeFi, offering new yield opportunities while reshaping capital efficiency and network security. This article explores these sub-sectors and dives into their future potential for innovation and growth.

Staking vs Restaking: Understanding Liquid Staking Tokens & Liquid Restaking Tokens

Decentralized Finance (DeFi) is shaking up traditional financial markets (Tradfi), providing a new way to lend, borrow, and earn interest without relying on banks or financial middlemen. AAVE, one of the largest and most recognized DeFi lending platforms, recently dropped its USDT and USDC lending rates to [4.42%](https://app.aave.com/reserve-overview/?underlyingAsset=0xdac17f958d2ee523a2206206994597c13d831ec7&marketName=proto_mainnet_v3) and [5.03%](https://app.aave.com/reserve-overview/?underlyingAsset=0xa0b86991c6218b36c1d19d4a2e9eb0ce3606eb48&marketName=proto_mainnet_v3) respectively, now lower than the [current Federal Reserve rate of 5.55%](https://fred.stlouisfed.org/series/fedfunds). 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_2f5e441a3e.png)
_The Federal Reserves Interest rates growth since 2016 ([Source](https://fred.stlouisfed.org/series/fedfunds))_

This move raises various questions. What does this mean for DeFi and Crypto? How will it impact staking, yield farming, and protocol Total Value Locked (TVL)? And, with the Federal Reserve expected to cut current interest rates for the first time since 2020 this week, what larger implications might we expect in the short and long term?

## First things First: What are DeFi Interest Rates?

DeFi interest rates are the returns or fees tied to lending and borrowing on decentralized finance - DeFi platforms. Unlike traditional finance (tradfi), where rates are set by banks, DeFi rates fluctuate based on supply and demand. Platforms like AAVE and Compound use smart contracts to dynamically adjust these rates. AAVE, for instance, allows users to lend assets like USDT and earn interest, or borrow while having interest payments, with rates changing in real-time based on market conditions. These rates are essential in driving liquidity and participation in DeFi, with users always on the lookout for the best DeFi Interest rates.

## The Significance of AAVE’s Rate Drop

The past couple of days we have experienced a drop in AAVE’s USDT lending rates, which currently stand below the Federal Reserve rate. This is significant for several reasons: Historically, DeFi rates have remained higher than those in traditional finance, compensating for the increased risks and volatility in Defi and cryptocurrency markets. This dip shows a shift in dynamics and can reflect underlying market tendencies.

### How are DeFi Interest Rates measured?

Several factors might explain the decline:

- **Increased Supply of USDT**: An influx of USDT deposited on AAVE may have outpaced borrowing demand, resulting in below-average interest rates. When more users supply their stablecoins for lending, the competition among them drives down the rates offered to borrowers.

- **Reduced Demand for Borrowing**: Market players may be less likely to borrow as a result of reduced leverage opportunities or a risk-averse sentiment in the face of global economic uncertainty.

- **Shifts in Liquidity Preferences**: A mass rush to liquidity amid economic uncertainty may reduce demand for loans, driving lower rates on platforms such as AAVE:

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_e6167ef380.png)
_Tether USDT and Circle USDC Borrowing Rates of 4,42% and 5.03% respectively, lower than the FEDs rate ([Source](https://app.aave.com/markets/))_

## Federal Reserve and Global Rate Cuts: Context and Expectations

Central banks throughout the world are dropping interest rates rapidly—more than 35 reductions in the last three months—with countries such as Switzerland, Canada, and the EU already taking action. The United States Federal Reserve is expected to follow suit, possibly cutting interest rates by 0.25% to 0.5% at its next meeting this week. These cuts could be the first since January 2020, indicating a change from battling inflation to supporting economic growth.

The pressing question in the world of DeFi remains: When will the interest rates go down? On Polymarket, a popular Defi prediction market, the crypto community appears to be convinced that the federal Reserve will lower interest rates, although the extent of the decrease is still debatable. Current chances indicate a 54% possibility of a 50 basis point drop, a 45% chance fora 25 basis point cut, and a very low chance of either no change or a hike in interest rates.

This implies a strong market sentiment toward easing, but also significant uncertainty regarding the magnitude of the rate cut:

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_926a0f0fe4.png)
_PolyMarket predictions for the upcoming FED meeting where interest rate cuts will be considered ([Source](https://polymarket.com/event/fed-interest-rates-september-2024?tid=1726495301291))_

Lower rates generally encourage borrowing and investment, which could impact DeFi markets. If the Fed cuts rates, it could boost demand for DeFi lending, drawing more liquidity into platforms like AAVE. As capital flows into DeFi, we might see an increase in Total Value Locked (TVL) across these platforms.

## How does the drop in Interest Rates impact the DeFi ecosystem?

As borrowing rates decrease, particularly in tandem with the expected Federal Reserve rate reduction, many potential adjustments could reshape the DeFi ecosystem. Lower borrowing costs may make DeFi platforms more appealing to a wider spectrum of investors, promoting greater borrowing for activities like leveraging positions and yield farming. This surge in activity may improve total liquidity within DeFi protocols as more capital enters to take advantage of these favorable rates.

Furthermore, when DeFi rates are set lower than those offered in traditional finance, DeFi may attract more traditional investors. The combination of equivalent or superior yields, as well as features such as quick transactions and lower middleman expenses, may make DeFi platforms a more enticing option for investors looking for higher returns.

However, how the broader market reacts will be heavily influenced by the context of these rate changes. If seen as a measure to encourage growth, DeFi may experience an increase in capital inflows. If the reduction are regarded as a reaction to underlying economic difficulties, investor caution may dampen enthusiasm, potentially limiting the influx of fresh capital into DeFi markets despite the lower borrowing costs.

## Consequences for Staking in DeFi

Decreasing borrowing rates can also impact Staking, generating:

- **Increased Protocol Activity**: Lower rates could lead to higher activity on DeFi platforms, potentially boosting staking and yield opoprtunities.

- **Yield-Seeking Behavior**: In a low-rate environment, investors might seek higher returns through staking, increasing demand for DeFi services offering such features.

- **Reallocation of Assets**: More favorable borrowing conditions might drive participants to shift assets toward protocols offering better yield products.

## Broader Market Dynamics and Future Outlook

The Fed’s rate cuts could either fuel a risk-on climate, resulting in a bull run in crypto, or induce uncertainty if viewed as a response to an economic downturn. These trends could lead to further innovation in yield products, competitive rates with traditional finance, and increased mainstream acceptance.

While lower costs may increase activity and staking yields, the overall market reaction will depend on whether these changes are considered as an opportunity or a warning. For the time being, DeFi is a sector to keep an eye on, particularly as these bigger economic developments unfold.






Explore the impact of falling DeFi interest rates as AAVE's lending rates drop below the Federal Reserve's. Learn more about how these shifts could reshape staking, yield opportunities, and the broader DeFi landscape.

Interest Rates in DeFi Drop: What Does This Mean for Staking & Yield?

Key figures from Loop, Inception, and ZeroLend gathered for the Pre-Token 2049 AMA to discuss the development of Bitcoin DeFi and the evolving landscape of restaking. The session covered topics such as the origins of each protocol, the challenges and potential of the Bitcoin restaking ecosystem, its impact on Ethereum, and expectations for the upcoming Token 2049 event in Singapore.

The panelists shared insights on their respective platforms' roles in the Bitcoin DeFi space, their strategies for addressing yield sustainability, and their perspectives on the symbiotic relationship between Bitcoin and Ethereum. Dive into the AMA highlights to learn how Loop, InceptionLRT, and ZeroLend are positioning themselves for the future of DeFi.

**X (Twitter) Spaces**: **[Pre-Token 2049 AMA](https://x.com/stakingcircle/status/1833120767032115549)**

**Speakers**:

- Miguel (Inception): Growth Manager @ **[InceptionLRT](https://x.com/InceptionLRT)**
- Andy (Loop): Founder @ **[Loop](https://x.com/loopfixyz)**
- Steven (ZeroLend): Founder @ **[ZeroLend](https://x.com/zerolendxyz)**

**Index**:
1. Panelists Introduction and Project Overview
2. Development of the Bitcoin Restaking Ecosystem
3. Potential Impact of Bitcoin DeFi on Ethereum
4. Expectations for the Singapore Event
## 1. Panelists Introduction and Project Overview

- **Miguel (Inception)**: Growth Manager, working with EigenLayer, expanding into Bitcoin and other assets:
“_Inception is an LRT protocol currently working with EigenLayer, but we are also looking forward to expanding into new assets such as Bitcoin_."

- **Andy (Loop)**: Founder, focusing on lending market for smart collateral to achieve capital efficiency:
“_Loop is a lending market for smart collateral, aiming to take capital efficiency to the next level. We provide liquidity to DEXs or other DeFi platforms, allowing users to borrow against it and create new yield farming strategies_."

- **Steven (ZeroLend)**: Founder, money market live on ZK-SYNC, evolving with the ecosystem:
“_ZeroLend is a money market that has been live for over a year, initially launched on ZK-SYNC. We quickly established ourselves within the ZK-SYNC ecosystem, and from there, we’ve been evolving based on user needs and market demands_."

- **Andy (Loop)**: Reflecting on Loop's origin, identifying a gap in the market:
“_The origin of Loop comes from my personal yield farming experience. I saw a gap in the market where liquidity could be collateralized to unlock new strategies, so we decided to build it ourselves_."

- **Steven (ZeroLend)**: Addressing ZeroLend’s initial focus on ZK-SYNC:
“_We focused on solving problems in the early-stage ZK-SYNC ecosystem. There was no good money market or lending protocol on ZK-SYNC, so we built one and quickly dominated the space_."

- **Miguel (Inception)**: Team background and expertise in liquid staking since 2017-2018:
“_Our team has a strong background in liquid staking since 2017-2018. When the liquid restaking narrative emerged, we decided to apply our expertise to this new trend_."

## 2. Development of the Bitcoin Restaking Ecosystem

- **Andy (Loop)**: Discussing Bitcoin restaking as a new trend and concerns about yield sustainability:
“_I think Bitcoin restaking is in a bubble stage; everyone wants to build a new protocol, but nobody is thinking about where the yield is coming from. For Bitcoin, anything above a 0.5% yield from restaking is already a lot_."

- **Steven (ZeroLend)**: Announcing launch of the first Bitcoin market with various assets:
“_ZeroLend has just launched its first Bitcoin market where users can use assets like ETHERIFY, EBTC, and Pendel PD tokens to participate in the ecosystem_."

- **Miguel (Inception)**: Commenting on the careful consideration of yield sources and sustainability:
“_We haven't launched our BTC LRT yet because we are still trying to understand where the yield will come from and if it’s sustainable. Once we have clarity, we’ll move forward aggressively_."

## 3. Potential Impact of Bitcoin DeFi on Ethereum

- **Andy (Loop)**: Suggesting that Bitcoin DeFi will likely benefit Ethereum rather than threaten it:
“_I don't think Bitcoin will kill Ethereum DeFi. If anything, Bitcoin’s entry will help Ethereum by bringing fresh TVL to its ecosystem_."

- **Steven (ZeroLend)**: Highlighting the potential for Bitcoin market cap entering Ethereum DeFi:
“_We are looking at a potential $1 trillion Bitcoin market cap entering the Ethereum DeFi ecosystem, which could significantly benefit Ethereum_."

- **Miguel (Inception)**: Taking a wait-and-see approach regarding the long-term impact:
“_We are waiting to see how the Bitcoin DeFi ecosystem develops, whether it will grow exponentially or just be a passing trend_."

## 4. Expectations for the Singapore Event
Event Date: Scheduled for September 17th, 2024.

- **Andy (Loop)**: Excitement for networking opportunities, particularly with "Asian whales" for TVL:
“_Our goal is to hunt Asian whales and attract them to Loop to increase our TVL. The event season in Singapore is perfect for that_."

- **Miguel (Inception)**: Focused on both business development and community engagement:
“_Our CEO João will be there to meet investors and partners, but we also want to connect with the local community and other crypto enthusiasts_."

- **Steven (ZeroLend)**: Preparing for community engagement and offering merchandise to attendees:
“_We're excited to meet our users and community members in Singapore, and we’re bringing unique merchandise for everyone who stops by to say hi_."

- **Miguel (Inception)**: Mentioning the CEO's participation and inviting community members to engage:
“_Our CEO João will be attending, and we encourage everyone to meet him, maybe even share a beer on us!”

- **Andy (Loop)**: Describing the excitement about the event and the opportunity to meet partners and community members in person:
“_In crypto, we often build businesses without seeing each other. Events like these allow us to sit down face-to-face with the people we work with and foster new ideas_."




Key figures from Loop, InceptionLRT, and ZeroLend gathered for the Pre-Token 2049 AMA to discuss the development of Bitcoin in DeFi and Restaking. The session covered topics such as the potential of the Bitcoin restaking ecosystem, its impact on Ethereum, and expectations for the upcoming Token 2049 event in Singapore.

Pre-Token 2049 AMA Recap

The emergence of restaking solutions has transformed how investors generate passive income, enabling them to compound passive rewards, boost the composability of decentralized finance (DeFi), and improve the security of Proof-of-Stake (PoS) blockchain ecosystems.

In this article, we are doing a deep dive into three prominent restaking protocols: EigenLayer, Symbiotic, and Karak. We will explore their unique architectures, differentiating features, and market positions, providing insights into how they each contribute to the competitive DeFi landscape.
## EigenLayer

It makes sense to begin this list with EigenLayer, as it’s the foundational protocol that made restaking possible in the first place. 

Operating on the Ethereum blockchain, EingenLayer is a middleware infrastructure that enables ETH stakers to validate a second layer of modules, thereby boosting the network’s security. The core offering of EigenLayer lies in its pooled security mechanism, where validators can secure multiple modules simultaneously. This is coupled with an open market governance system that allows validators to choose which modules they want to secure, creating a dynamic and flexible validation environment.

### Architecture and Mechanisms

EigenLayer's architecture is designed around the concept of security aggregation, where ETH is pooled across various modules to provide a robust security framework for decentralized applications (DApps). 

Validators who opt-in to restake their ETH take on additional slashing risks but are incentivized by multiple revenue streams from validating new software modules. This restaking process supports a range of modules, including consensus protocols, data availability layers, and oracle networks, thus offering a versatile platform for innovation.

### Differentiating Points

**1. Pooled Security via Restaking:** By allowing the same staked ETH to secure multiple modules, EigenLayer maximizes resource efficiency.

**2. Innovation Staging Ground:** EigenLayer serves as a testing environment for new technologies before they are integrated into the Ethereum mainnet, thereby accelerating innovation.

**3. Open Market Governance:** The protocol’s flexibility in allowing validators to choose which modules to secure fosters a more decentralized and dynamic security model.

For more detailed information, you can explore the [EigenLayer documentation](https://docs.eigenlayer.xyz/) and [website](https://www.eigenlayer.xyz/).

## Symbiotic

Symbiotic is a shared security protocol that offers a highly customizable and modular restaking framework, primarily designed for network builders. It allows networks to tailor every aspect of the restaking process, including collateral management, operator selection, rewards distribution, and slashing mechanisms.

### Architecture and Mechanisms

The architecture of Symbiotic is defined by its modular flexibility. Network builders can fully customize their restaking implementations, ensuring that all aspects—such as collateral assets, vault management, and operator roles—are aligned with their specific needs. Symbiotic uses immutable core contracts on Ethereum to minimize governance risks, ensuring long-term stability and security.

### Differentiating Points

**1. Full Customization:** Symbiotic stands out for its unparalleled flexibility, allowing network builders to design their restaking processes from the ground up.
Immutability for Stability: By leveraging non-upgradeable contracts, Symbiotic ensures that the security and governance frameworks remain tamper-proof, providing a stable environment for long-term projects.

**2. Multi-Asset and Reputation-Based Curation:** The protocol supports multiple assets for restaking and incorporates reputation systems for operator curation, enhancing security and capital efficiency.

For a deeper dive into Symbiotic, refer to their [official documentation.](https://docs.symbiotic.fi/)

## Karak

Karak is a universal restaking layer designed to provide blockchain security using a variety of assets, making it a versatile tool for developers across multiple networks. Unlike other protocols that often rely on highly dilutive reward mechanisms, Karak focuses on facilitating secure infrastructure development without compromising economic sustainability.

### Architecture and Mechanisms

Karak’s architecture is centered around universal restaking, which allows developers to tap into secure trust networks by restaking assets like Ethereum, liquid staking tokens, and stablecoins. Additionally, Karak offers a pioneer marketplace for validators, where developers can incentivize validators to allocate their restaked assets, ensuring robust security and economic efficiency.

### Differentiating Points

**1. Multi-asset Restaking:** Karak supports a wide range of restaking assets, providing greater flexibility and security for developers.

**2. Cross-Blockchain Compatibility:** Karak’s restaking infrastructure is compatible with multiple blockchains, making it a versatile tool for developers beyond just Ethereum.

**3. Developer-Friendly Tools:** Karak offers a suite of tools and SDKs that simplify the deployment and security of new services, lowering the entry barriers for innovation.
To learn more about Karak, visit their documentation.

## Comparative Analysis
### Key Differences

**- EigenLayer** focuses on **pooled security** and flexibility through an open market governance structure, allowing validators to secure multiple modules with the same staked assets.

**- Symbiotic** emphasizes **modularity and customization**, providing network builders with full control over their restaking processes, particularly focusing on immutability and stability.

**- Karak** differentiates itself by supporting **multi-asset restaking** and offering cross-blockchain compatibility, making it a universal security solution with a developer-centric approach.

## Conclusion

The rise of restaking protocols like EigenLayer, Symbiotic, and Karak underscores the growing complexity and sophistication of the DeFi ecosystem. Each protocol offers unique features and serves different roles, catering to different aspects of network security and innovation. 

For professionals, investors, and developers in the DeFi space, staying informed about these protocols is crucial for navigating and leveraging the rapidly expanding landscape of decentralized technologies.

[Let’s explore the expansive world of liquid restaking together.](https://www.stakingcircle.com/)

Join Staking Circle and gain access to our knowledge base and a considerable network of professionals working in unison to elevate the DeFi space. 



In this article, we are doing a deep dive into three prominent restaking protocols: EigenLayer, Symbiotic, and Karak. We will explore their unique architectures, differentiating features, and market positions, providing insights into how they each contribute to the competitive DeFi landscape.


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The Big 3: EigenLayer, Symbiotic, and Karak - Overview, Differences & Market Analysis

With rare exceptions, blockchain networks have strayed away from the Proof-of-Work (PoW) model in favor of Proof-of-Stake (PoS), as illustrated by Ethereum’s transition to a PoS model in 2022. 

Environmental concerns are among the main reasons behind this shift to PoS networks, which are praised for their energy efficiency and scalability. This model also introduces new dynamics in network security, one of which is slashing. For validators and stakers, the concept of slashing can be daunting, raising concerns about the safety of their investments. 

In this article, we’ll address common concerns surrounding slashing, providing readers with a clear understanding of the process, its importance, and how to mitigate risks. Whether you're a seasoned validator or someone considering staking your assets, understanding slashing is crucial to navigating most blockchain ecosystems safely.

## Definition of Slashing in PoS Chains
### What is Slashing?

Slashing is a mechanism implemented in Proof-of-Stake (PoS) blockchain networks designed to penalize validators for malicious behavior or poor performance. 

Unlike PoW networks, where security is maintained through energy-intensive mining, PoS relies on validators who lock up (stake) their tokens to secure the network. Slashing serves as a deterrent against activities that could compromise the integrity of the blockchain, ensuring that validators act in the network's best interests.

### Overview of Proof-of-Stake (PoS) Consensus Mechanism

In a PoS network, validators are chosen to propose and validate new blocks based on the number of tokens they have staked. The more tokens a validator stakes, the higher their chance of being selected to validate transactions. This system has gained popularity due to its energy efficiency compared to PoW, making it a preferred choice for many new blockchain networks.

### The Role of Slashing in maintaining Network Integrity
Slashing is integral to PoS networks because it aligns the economic interests of validators with the network’s health. By imposing financial penalties for malicious actions or negligence, slashing ensures that validators are incentivized to perform their duties correctly and maintain network security.

## How Crypto Slashing Works
### Mechanics of Slashing

At its core, slashing is a penalty mechanism. When a validator engages in behavior that could harm the network—such as double-signing, downtime, or equivocation—they risk losing a portion of their staked assets. Here’s a closer look at the conditions that trigger slashing:

**- Double-signing:** This occurs when a validator signs two conflicting blocks at the same slot (time). Double-signing can undermine the blockchain’s finality, so it’s met with harsh penalties.

**- Downtime:** Validators must be online and available to participate in the network. Extended periods of inactivity can lead to slashing, as the validator fails to fulfill their responsibilities.

**- Equivocation:** This involves a validator creating conflicting attestations or blocks, which can confuse the network and compromise security.

### Technical Details of the Slashing Process

Slashing penalties vary across different PoS networks, but the process generally involves detection, reporting, and penalty execution.

**- Ethereum 2.0:** The slashing process in Ethereum 2.0 follows a sequence of detection, reporting, penalty execution, and withdrawal/exit. When a slashing event is detected, it is reported to the network, which then imposes the appropriate penalty, followed by the withdrawal or forced exit of the slashed validator.

**- Cosmos:** In the Cosmos network, slashing involves evidence collection and penalty distribution. When a validator commits an offense, evidence is gathered, and the penalty is then proportionately distributed across the network.

## Examples of Slashing Events
### Ethereum 2.0: Prysm Validator Slashing
In late 2020, several validators using the Prysm client on Ethereum 2.0 were slashed for double-signing. A software bug caused multiple validators to sign conflicting attestations, leading to slashing penalties. This event highlighted the importance of reliable software and vigilant monitoring to avoid accidental slashing.

### Cosmos: Certus One Downtime
The validator Certus One experienced downtime due to technical difficulties, resulting in a slashing penalty. This incident underscored the importance of maintaining robust infrastructure to ensure continuous participation in the network.

## Why Slashing Matters
### Importance of Slashing in PoS Networks
By penalizing validators for malicious actions or negligence, slashing acts as a deterrent against behaviors that could harm the network. It ensures that validators remain aligned with the network’s health and stability, reducing the likelihood of downtime or other performance issues.

### Comparison with Proof-of-Work (PoW) Chains
In PoW networks, security is maintained through the computational effort required to mine new blocks, with incentives provided for miners who maintain network integrity. In contrast, PoS networks use slashing as a means of ensuring security, where penalties are imposed for actions that could compromise the network. 

While PoW focuses on rewarding miners and requires high energy consumption, PoS maintains security through the potential fear of slashing while being energy-efficient.

## Should Users Worry About Slashing?
### Common Concerns Among Users and Validators

One of the primary concerns for validators is the risk of losing a portion of their staked tokens, which can impact their financial position and potential earnings. Additionally, validators may face slashing due to network issues or software bugs, resulting in unintended penalties.

### Real-World Impact of Slashing
While slashing is a real risk, the actual impact on validators tends to be relatively low. For example, in the Cosmos network, slashing events are rare, with penalties typically around 0.01% for downtime and up to 5% for double-signing. This suggests that slashing does not usually result in catastrophic losses.

### Perceived vs. Actual Risks
It’s important to distinguish between myths and realities when it comes to slashing. Here are some common misconceptions about slashing:

**- Myth: Slashing Happens Frequently** - Slashing is designed as a deterrent and occurs infrequently, ensuring network security without excessive penalties.
**- Myth: Slashing Leads to Complete Loss of Stake** - Most slashing events are partial, with full stake loss reserved for severe or repeated offenses.

## Mitigating Slashing Risks
### Strategies for Validators to Avoid Slashing

Validators can take several measures to avoid slashing:

**- Maintain Network Compliance:** Validators should stay up-to-date with network protocols and ensure that they comply with all requirements.

**- Invest in Reliable Hardware and Backup Systems:** Ensuring uninterrupted operation is critical. Reliable hardware and redundant backup systems can prevent downtime and avoid penalties.

**- Protect Cryptographic Keys:** Preventing unauthorized access to cryptographic keys is essential to avoid double-signing and other slashing-related issues.

**- Utilize Technical Safeguards and Monitoring Tools:** Employing advanced monitoring tools can help detect potential issues before they lead to slashing.

### Network-Level Mitigation Techniques
PoS networks themselves are designed to minimize slashing occurrences. These networks often include features like redundancy and monitoring systems to reduce the likelihood of slashing and protect validators from accidental penalties. Additionally, community governance allows changes to be made in order to maintain a balanced reward 

## Conclusion
While slashing is an inherent risk in PoS blockchains, it serves a vital role in maintaining the integrity of the network. By understanding how slashing works and implementing best practices, validators can significantly mitigate their risks. For stakers and validators alike, staying informed and vigilant is the key to navigating the PoS ecosystem safely.

Whether you're an active participant or considering staking your assets, understanding the mechanisms behind slashing can help you make informed decisions that will protect your investments in the dynamic world of DeFi.

[Gain access to more in-depth DeFi articles and a community of Web3 professionals by joining Staking Circle.](https://www.stakingcircle.com/)

In this article, we’ll address common concerns surrounding slashing, providing readers with a clear understanding of the process, its importance, and how to mitigate risks. Whether you're a seasoned validator or someone considering staking your assets, understanding slashing is crucial to navigating most blockchain ecosystems safely.


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Crypto Slashing: Should You Worry? Understand the Process and Mitigate Risks

While staking and restaking are seen as a passive income source, the truth is that investors can and should be actively looking to maximize returns on staked assets. In other words, restaking is more profitable when done alongside curators of Active Validated Services (AVSs).

AVS-Curators are a group of strategically oriented minds responsible for modifying how restakers achieve optimal yields and security. 

This article explores the crucial role of AVS-Curators, delving into how they calculate and select [Actively Validated Services (AVSs)](https://www.stakingcircle.com/research/actively-validated-services-av-ss/) to boost returns and manage risks, thus transforming the landscape and introducing innovations in the restaking process.

## The Role of AVS Curators

### What Are AVS Curators?
AVS-Curators are specialized entities in the staking landscape focusing on selecting and managing AVS strategies to optimize restaking yields while minimizing risks for restakers. Their responsibilities include market analysis, AVS selection, and performance monitoring, aligning restaking opportunities with the goals of protocols or investors through a tailored approach to yield optimization.

### Strategic Importance
AVS-Curators are pivotal in the restaking ecosystem, ensuring that strategies can achieve higher returns while safeguarding the staked assets against potential risks like slashing.

## How AVS Curators Operate
### Selection of AVS Strategies
AVS-Curators choose optimal AVS strategies based on yield potential, security, and protocol reliability. They manage diversified portfolios and continuously adjust strategies to adapt to market changes and opportunities.

### Risk Management
AVS-Curators employ various risk management techniques including slashing protection and contingency planning to protect restaked assets. It is also vital for protocols to thoroughly audit their smart contracts.

## Individual AVS Strategies in Liquid Restaking Protocols
AVS-Curators implement specific strategies that allow restakers to delegate to AVSs aligning with their yield and security goals, highlighting the flexibility and customization offered by Curators.

## Case Studies: EigenLayer and Symbiotic
### EigenLayer's Approach
EigenLayer’s architecture is centered around Node Operators creating AVS strategies that align with the protocol’s objectives. This blurs the lines between AVS Curators and Node Operators, as operators are responsible for AVS delegation. 

Having Node Operators choosing which AVS to support is a viable option, but more expensive to maintain, since it will require delegators to constantly track down the connections between AVSs and Operators, beside the AVSs performances themselves.

### Symbiotic Unique Architecture
Symbiotic is an emerging restaking protocol that introduces AVS-Curators as distinct entities, separating their roles from Node Operators. The AVS selection process on Symbiotic focuses on complex criteria for reward generation and security.

## The Advantages of AVS Curators
### Expertise and Insight
AVS-Curators leverage specialized knowledge and analytical skills to make informed decisions about AVS selections, providing investors with a strategic advantage through robust market analysis.

### Efficiency and Convenience
AVS-Curators streamline the restaking process, saving investors time and effort by handling complex restaking decisions, leading to higher yields and optimized returns.

## The Future of Restaking with AVS Curators

While AVS-Curators are still a new concept, their role in optimizing restaking strategies and boosting yield generation for investors is undeniable. We encourage everyone to explore AVS curators and leverage their services to streamline their investment strategies.

Curious for more information on the AVS-Curators and other topics closely related to liquid restaking? Join [Staking Circle](https://www.stakingcircle.com/), the leading staking community in the space, and discuss everything about Staking, Restaking and DeFi!



This article explores the crucial role of AVS-Curators, delving into how they calculate and select Actively Validated Services (AVSs) to boost returns and manage risks, thus transforming the landscape and introducing innovations in the restaking process.


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What are AVS-Curators? The Hidden Heroes Behind Your Restaking Rewards

Bitcoin's functionality has evolved significantly since its inception, continually adapting to the changing landscape of cryptocurrency. Recent developments in Bitcoin, including Ordinals, Inscriptions, BRC-20 tokens, and Runes, have spurred the discussion of Bitcoin's new capabilities and expanded functionality. These advancements showcase Bitcoin's potential to support more complex operations and enhance its role within the decentralized finance ecosystem.

Among these innovations, one that is catching the attention from seasoned investors to DeFi degens is the capability for yield generation. If you’re interested, we analyzed Bitcoin's evolving landscape in our previous blog post, focusing on emerging Layer 2 solutions.

In this post, we’ll delve into three prominent protocols: Babylon, Stacks, and Botanix Labs. Each of these platforms offers unique mechanisms for Bitcoin yield generation, and understanding these can provide valuable insights into their sustainability and effectiveness.

## Overview of Bitcoin Yield Generation
Yield generation can be defined as an investment tool where investors earn rewards or interest on their crypto holdings. This can be seen in various forms, from staking to liquidity provision. 

Mechanisms for yield generation differ significantly from those offered by traditional finance institutions, where a single entity controls the process. Decentralized platforms relying on blockchain technology enable their users to govern operations through DAOs (Decentralized Autonomous Organizations).

For this analysis, we'll focus exclusively on decentralized yield generation methods. Understanding the sustainability and security of these decentralized sources is crucial, as these factors directly impact the reliability and potential profitability of the investments.

## Case Study 1: Babylon
[Babylon](https://babylonlabs.io/) introduces the concept of Bitcoin restaking, which allows Bitcoin holders to earn yield by securing PoS chains without the use of bridges or custodial solutions. This strategy takes advantage of Bitcoin's stability and decentralization, transforming idle Bitcoin into a productive asset that secures PoS networks.

### Yield Sources
**1. Security Marketplace**

**- Two-Sided Market:** Babylon creates a marketplace in which PoS chains reward Bitcoin holders for improving their security. PoS chains, which sometimes require more capital and incentives to strengthen their defenses, provide returns to Bitcoin stakers.

**- Slashable Security Guarantees:** PoS chains compensate Bitcoin holders for the possibility of slashing by confiscating a portion of the staked Bitcoin to punish any bad behaviour.

**2. Decentralized Staking Protocol:**
**- Remote Restaking:** Bitcoin holders can lock their assets in a trustless manner, avoiding centralized custody or bridging risks.

**- Slashable Security:** Babylon’s protocol ensures full slashability, meaning that 1/3 of Bitcoin stakes can be slashed if safety violations occur, thereby reinforcing the network’s security.

### Sustainability and Security Evaluation

**- Minimal Trust Risks:** Babylon’s model reduces trust and custodial risks by maintaining Bitcoin control, providing a robust case for sustainability.

**- Dependency on Cosmos Infrastructure:** The dependency on the Cosmos infrastructure poses risks related to its adoption and stability. However, Babylon's model minimizes trust and custodial risks by enabling Bitcoin holders to maintain control over their assets, providing a compelling case for its sustainability.

## Case Study 2: Stacks
[Stacks](https://www.stacks.co/) is designed as a secondary layer for Bitcoin, enabling smart contracts and decentralized applications while leveraging Bitcoin’s security. It uses a unique consensus mechanism called Proof of Transfer (PoX).

### Yield Sources
**1. Proof of Transfer (PoX) Mechanism:**
**- Bitcoin to Secure Network:** Miners spend Bitcoin to secure the network and earn STX tokens. This mechanism aligns the security of Stacks closely with Bitcoin.

**- Stacking for BTC Rewards:** STX holders can lock up their tokens (known as “stacking”) to earn Bitcoin rewards. This is facilitated by distributing the Bitcoin spent by miners to those who participate in stacking.

**2. STX as an Incentive:**

**- STX Token Yield:** Yield is generated through the distribution of newly minted STX tokens to miners and participants, incentivizing network security and participation.

**- Smart Contract Capabilities:** The ability to run smart contracts on Stacks opens up various yield-generating activities similar to Ethereum, such as DeFi applications, NFTs, and DAOs.

### Sustainability and Security Evaluation
**- Decentralization and Security:** Stacks enhances Bitcoin’s security model by allowing Bitcoin holders to participate in network security and yield generation without relying solely on the STX token.

**- Improved Yield Potential:** The upcoming Nakamoto Upgrade aims to bridge the gap between Stacks and Bitcoin, enhancing yield opportunities by aligning security and economic incentives.

## Case Study 3: Botanix Labs
[Botanix Labs](https://www.botanixlabs.xyz/en/home) proposes also as a Bitcoin Layer 2, offers a full Ethereum Virtual Machine (EVM) equivalence. By bridging Bitcoin’s security with Ethereum’s composability, [Botanix](https://botanixlabs.xyz/en/testnet) aims to unlock yield opportunities [previously unavailable](https://botanixlabs.xyz/en/r/whitepaper) on Bitcoin.

### Yield Sources
**1. Spiderchain Primitive:**

**- Decentralized Multisig Networks:** Botanix employs a series of decentralized multisigs (Spiderchain) to secure Bitcoin on its EVM layer, enabling yield generation through decentralized applications and smart contracts.

**- Separation of Bitcoin Asset and Blockchain:** This design separates Bitcoin the asset from the blockchain, allowing it to be utilized in EVM-compatible environments for yield-generating activities.

**2. Synthetic Bitcoin (sBTC):**

**- 1:1 Pegging:** sBTC represents Bitcoin on the Botanix chain, allowing seamless integration with Ethereum-like smart contracts while generating yield through DeFi applications.

**- Two-Way Peg System:** The pegging mechanism ensures that Bitcoin can move in and out of Botanix securely, facilitating liquidity and yield generation without compromising Bitcoin’s core security.

**3. Proof of Stake (PoS) Model:**

**- Staking Rewards:** Botanix uses a PoS consensus model where participants stake Bitcoin to secure the network, earning rewards in the form of synthetic BTC or transaction fees.

**- Decentralized Participation:** The network encourages decentralized node operation, distributing rewards among participants who contribute to network security.
Sustainability and Security Evaluation

**- Integration with Bitcoin’s Security:** By leveraging Bitcoin’s decentralization and PoW security, Botanix ensures a robust and sustainable environment for yield generation.

**- Scalability and Composability:** The EVM compatibility allows for the creation of scalable yield-generating applications, enhancing Botanix’s appeal as a bridge between Bitcoin and Ethereum.

## Comparative Analysis

Each protocol's approach to security and sustainability reveals different strengths and weaknesses:

**Security and Trust:**
**- Babylon:** Strong security due to minimal trust and custodial risks. Dependency on Cosmos may introduce external risks.

**- Stacks:** High trust due to leveraging Bitcoin's inherent security but risks related to the value sustainability of STX tokens.

**- Botanix Labs:** Innovative security via decentralized multisigs, though success depends heavily on EVM integration and adoption.

**Sustainability:**

**- Babylon:** Sustainable if Cosmos infrastructure remains robust and widely accepted.

**- Stacks:** Sustainability contingent on STX market performance and ongoing demand.

**- Botanix Labs:** Faces challenges in balancing Bitcoin's security with the flexibility of smart contracts.

**Decentralization Spectrum:**

**- Babylon:** Moderately decentralized; depends on the adoption of the Cosmos network.

**- Stacks:** Decentralized through direct linkage to Bitcoin but relies on the economic stability of a secondary token.

**- Botanix Labs:** Highly decentralized theoretically due to its design but must achieve critical adoption to maintain this in practice.

## Conclusion: Bitcoin Staking — The New Frontier in DeFi

This isn’t just about stacking sats; it’s about stacking opportunities. Imagine earning returns on your Bitcoin while you sleep, thanks to the magic of staking. Not only do you get to contribute to the security and efficacy of blockchain networks, but you also reap a passive income. 

As we peel back the layers of Bitcoin's latest evolutions, it's clear we're on the cusp of a new era. The mechanisms of yield generation we've explored today—Babylon, Stacks, and Botanix Labs—are just the beginning of what promises to be an exhilarating ride. DeFi on Bitcoin is just in its infancy, full of vibrant potential.

Are you ready to join the revolution? At Staking Circle, we’re not just observers; we’re participants, enthusiasts, and advocates. We're here to guide you through the ins and outs of Bitcoin yield generation. Don't miss out on the ground floor of Bitcoin’s DeFi movement.

[Join us now, and let’s ride the wave of financial innovation together. 
](https://www.stakingcircle.com/)

In this post, we’ll delve into three prominent protocols: Babylon, Stacks, and Botanix Labs. Each of these platforms offers unique mechanisms for Bitcoin yield generation, and understanding these can provide valuable insights into their sustainability and effectiveness.

large_Sources of BTC Yield.png

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Sources of BTC Yield.png

Evaluating Sources of BTC Yield

Web3 protocols have been adopting point-based programs as an ingenious way to incentivize user engagement and participation. Points or tokens are earned by performing several actions that contribute to the growth of a protocol's user base or TVL. Users who earn the most points often become eligible for airdrop campaigns.

However, there is growing debate over whether these programs are still effective or if they have become oversaturated and less appealing to users. A major challenge faced is the overvaluation of tokens, as many projects launch airdrops with high fully diluted valuations (FDVs), resulting in tokens that appear overvalued.

Another issue is the prevalence of "airdrop farming" and other manipulative tactics, which distorts user engagement metrics. This behavior undermines the integrity of point programs, making it difficult for projects to accurately measure their community support and engagement.
This article will explore the current state of crypto point programs, addressing the main question: Are they booming with potential, or are they losing their impact due to saturation?

## Overview of Crypto Point Programs

Crypto point programs are designed to encourage user engagement within DeFi ecosystems by rewarding users with points for completing specific tasks, such as trading, staking, providing liquidity, bridging assets, or referring new users. 

These points can later be converted into tokens or other rewards, often through airdrops as previously mentioned. Initially, these programs generated significant hype, attracting users with the promise of earning lucrative rewards for their participation.

The anticipation of airdrops and rewards has historically driven interest and excitement around crypto point programs. Users flock to these platforms in hopes of receiving valuable tokens, boosting user acquisition and engagement. However, as the DeFi space continues to grow, questions arise about the long-term effectiveness of these programs.

## The Rise of Crypto Point Programs

### Historical Context and Popularity

Crypto point programs gained traction as a user acquisition and engagement tool in the DeFi landscape. Tied to airdrop incentives, they offered a way for projects to attract users by providing rewards for participation. The allure of potentially earning tokens for everyday activities created a buzz in the market, with users eager to take part in these programs.

### Initial Success and Hype

The initial success of crypto point programs can be attributed to their ability to attract a large number of users and generate significant market buzz. 

Projects like Blur effectively utilized point systems to drive user participation and foster loyalty within their communities. By offering points for various interactions, Blur successfully engaged users and created a sense of belonging within its ecosystem.

- **Blur Point/Airdrop Resource**

Blur's point system is an excellent example of how these programs can be a significant driver of user engagement and participation. By offering points for various actions, such as listing and bidding on NFTs, Blur created a dynamic environment that rewarded users for their activity. With multiple and generous airdrops as a central component of this strategy, Blur managed to overtake OpenSea as the leading NFT marketplace.

However, Blur's approach has faced criticism for its aggressive tactics, which some argue contributed to volatility in the NFT market. Critics claim that the emphasis on point farming led to speculative behaviors, with users focusing on earning rewards rather than genuine engagement with the NFT ecosystem. This strategy raised concerns about sustainability, as the incentivized behaviors could distort the market and detract from the platform's long-term value proposition.

Despite these challenges, Blur's founders have defended their approach, arguing that their strategy democratizes access to NFT markets and levels the playing field for retail users. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_2afe69e0a3.png)
_Blur Points Leaderboard ([Source](https://blur.io/airdrop))_

### Strategic Objectives of Points Programs

The strategic goals of crypto point programs are multifaceted. They aim to drive user engagement, create network effects, and foster community loyalty. By offering points as a form of incentive, projects can test features, build hype, and gauge user interest before launching a full-fledged product or token. This approach allows projects to refine their offerings based on user feedback, ensuring a more successful launch.

## Recent Challenges of Crypto Point Programs

### Market Saturation and User Fatigue

As the number of crypto point programs has increased, market saturation has become a significant challenge. Users are now more discerning, often finding the rewards and airdrop allocations underwhelming compared to the effort required. This saturation has led to user fatigue, where the novelty of earning points for participation has worn off, and users seek more substantial rewards.

### Challenges and Criticisms

- **Overpromise and Under-Deliver**: Many programs fail to meet user expectations due to ambiguous point-to-token conversion rates and insufficient rewards. This discrepancy between promised rewards and actual outcomes has led to user dissatisfaction.

- **Lack of Transparency**: Transparency issues have arisen, with users uncertain about the value of points and the potential for future airdrops. It is also unclear why some users become eligible for airdrops and others don’t, as requirements are not mentioned beforehand. This lack of clarity undermines trust in the programs and discourages participation.

- **Regulatory Concerns**: Points programs face regulatory challenges, especially in regions with strict securities laws. Compliance with these regulations adds complexity to program implementation, potentially limiting their reach.

A prime example of this is the EigenLayer’s airdrop, which blocked users from several countries, including the United States and Canada, due to regulatory risks. Additionally, VPN users were also excluded from the airdrop, even though they were able to participate in the platform's point garnering activities. This inconsistency—allowing users to earn points but then preventing them from earning rewards—sparked widespread criticism and highlighted the challenges of navigating regulatory frameworks while preserving user trust.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_ce75d3bb26.png)
_EigenLayer’s Airdrop Claim Website Restricted_

### Shift in User Expectations

User expectations have shifted as the novelty of point programs has diminished. Users now demand more substantial and tangible rewards for their participation. The rise of "airdrop farmers," individuals who exploit these programs for profit without genuine engagement, has further affected the credibility and effectiveness of points programs.

### Market Examples and Case Studies

### Successful Stories

- **Rabby Wallet**: Created by DeBank, Rabby Wallet successfully implemented a points program to draw users from competitors like MetaMask. By offering points for everyday wallet activities, such as swaps and referrals, Rabby incentivizes users to explore its features, leading to increased user acquisition and engagement. The program's simplicity and focus on daily interactions have helped establish Rabby as a compelling alternative in the crowded wallet market.

### Unsuccessful Stories

- **Chiliz**: Chiliz offers fan tokens for sports engagement, using points to access exclusive content and events. However, users have expressed confusion over how points are used, while regulatory challenges have added complexity to the system. In response, Chiliz has simplified its points structure and increased compliance efforts to address these issues.

## The Future of Crypto Point Programs

### Innovation and Adaptation

To remain relevant in the DeFi space, crypto point programs must embrace innovation and adapt to changing user expectations. Projects should explore new ways to engage users and offer more transparent and equitable reward structures, rewarding genuine users instead of bots and airdrop farmers with multiple accounts.

### Governance

Protocols can evolve their points programs by incorporating community-driven governance and voting mechanisms. By aligning incentives with community interests, projects can create strong, loyal, and organic communities.

Decentralized autonomous organizations (DAOs) have the potential to shape the future of point programs. By involving the community in decision-making processes, DAOs can ensure that incentives align with user interests, promoting a more sustainable and effective rewards system.

## Airdrops Must Adapt or Die Out

The sustainability of current airdrop practices is indeed concerning. There should be a greater emphasis on long-term value creation rather than short-term hype. This shift in focus is necessary to maintain user trust and ensure the longevity of the project. 

While crypto point programs initially captured user interest by offering rewards for various interactions with DeFi protocols, they often can’t maintain user engagement. Projects must adapt to these challenges by offering more transparent and equitable reward structures, emphasizing community-driven governance, and aligning incentives with long-term value creation. 

By addressing these issues, blockchain protocols can revitalize the appeal of point programs and maintain their relevance in the competitive DeFi landscape. 

For more insights on the DeFi industry, visit our [website](https://www.stakingcircle.com/) or join us on [Twitter (X)](https://x.com/stakingcircle). Staking Circle is a tight community of leading experts and professionals working in unison to build a healthy and democratic blockchain ecosystem.




Are Crypto Point Programs Still Driving Meaningful User Engagement, or Are They Losing Their Appeal in an Increasingly Saturated Market?

Crypto Point Programs: Booming or Saturated?

Bitcoin, which was originally designed as a decentralized money, has seen its role shift in recent years as technological improvements have expanded its capabilities. While generally seen as a store of value and a hedge against inflation, Bitcoin is currently making inroads into the field of decentralized finance (DeFi) as yield-producing asset. This transformation is supported by developments such as layer-2 solutions, cross-chain interoperability, and tokenization, which collectively enable what is known by - Bitcoin Staking.

Yield generation for Bitcoin includes a variety of approaches that allow holders to earn returns on their holdings while retaining the security and decentralization that Bitcoin is known for. As more investors, crypto users and developers look into these opportunities, knowing the principles behind Bitcoin yield production is critical for making sound investment decisions.

## Understanding Bitcoin Yield Generation

Bitcoin yield generation utilizes modern methods and financial strategies to provide returns on $BTC holdings. Unlike traditional finance, where a central authority might control interest rates and payouts, Bitcoin yield generation is characterized by decentralization and an self sufficient architecture. 

Knowing this, here are detailed some of the core components that make it possible to generate yield for your idle $BTC:

### Core Components of Bitcoin Yield

**1. Layer-2 Solutions and Interoperability**

One of the primary enablers of Bitcoin yield generation is the development of layer-2 solutions. While Bitcoin's base layer offers the foundation to the network through security and decentralization, it still lacks an important characteristic - Scalability. 

Solutions like Layer-2s (L2s) increase Bitcoin’s scalability by enabling faster and cheaper transactions off-chain. This not only reduces congestion on the Bitcoin mainnet but also allows $BTC to participate actively in liquidity provision and transaction validation within the DeFi space, particularly in emerging Proof-of-Work (PoS) chains.

Another important consideration is Bitcoin's interoperability with other blockchains. Cross-chain bridges enable Bitcoin to be used across many blockchain ecosystems, effectively allowing $BTC to interact with platforms like Ethereum and Binance Smart Chain. This relationship is essential for engaging in activities such as staking, yield farming, and lending, where Bitcoin can earn yields comparable to other crypto assets.

For further detail on how Layer 2 solutions are emerging the the BTC Landscape, check out our latest article about it: 

-> **[Unleashing Bitcoin’s Potential: The Pivotal Role of Layer 2 Solutions](https://www.stakingcircle.com/research/bitcoin-layer2/)**

**2. Tokenization of Bitcoin**

Tokenization has played an important role in integrating Bitcoin into the DeFi landscape. Wrapped Bitcoin ($wBTC), which is a tokenized version of Bitcoin on Ethereum, reflects how $BTC may be integrated into DeFi apps. This enables Bitcoin to participate in Ethereum-based DeFi operations, including lending, liquidity provision, and yield farming.

Furthermore, synthetic Bitcoin broadens this premise by allowing Bitcoin to be leveraged on different types of networks. These tokenized forms enable Bitcoin to participate in a greater range of financial transactions in Defi, extending its utility beyond a simple store of wealth.

**3. Proof-of-Stake and Security Sharing**

Despite Bitcoin's Proof-of-Work (PoW) consensus mechanism, it can be integrated into Proof-of-Stake (PoS) networks using novel protocols. Such protocols enable Bitcoin to function as a security layer for PoS chains, allowing $BTC holders to delegate their assets to help secure the network while earning staking rewards in return.

Emerging PoS chains oftentimes struggle with security because they lack the strong market capitalization and security infrastructure of more established networks. These chains can leverage Bitcoin's vast market capitalization to bootstrap security through staking. This has a dual benefit for both parties involved: the chains get increased security, while $BTC holders receive rewards from protocols and chains that require this security boost.

Security sharing is a concept that uses Bitcoin's robust security features to improve the security of other networks. Without leveraging Bitcoin's market capitalization, emerging protocols may settle to captivating users via unstable tokenomics, resulting in fragile ecosystems and sustainability concerns. Bitcoin staking thus provides a more steady and dependable method of increasing security and rewarding users.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_4860f5cf14.png)
_Workflow of how BTC is leveraged to outsource security through Staking & Restaking_

**4. Smart Contract Platforms**

Smart contracts automate many of the yield creation processes, including executing trades and collateral management. Smart contracts cut expenses and streamline operations by eliminating third parties, improving the efficiency and security of Bitcoin yield generation activities.

Protocols that use Bitcoin or tokenized versions of Bitcoin can integrate security measures akin to Ethereum's Slashing conditions to increase security. Slashing is a method used in Proof-of-Stake (PoS) networks to forfeit a percentage of a staker's assets if they act maliciously or fail to complete their tasks, such as accurately validating transactions or having a consistent up-time record. This feature incentivizes validators to perform honestly and protect network integrity.

By simulating Slashing events, Bitcoin-based protocols can impose stringent security measures, penalizing bad actors and increasing the network's credibility. This additional layer of security, combined with smart contracts' capacity to automate risk management measures such as automated liquidation of under-collateralized positions, improves the consistency and dependability of yield-generating operations, making them more appealing to investors.

## Generic Architecture of Bitcoin Yield Generation

The conceptual framework of Bitcoin yield production includes multiple components that are able to work together to facilitate the process.

- **Tokenization and Bridging**: Bitcoin's conversion into wrapped or synthetic tokens enables it to engage in DeFi activities. Cross-chain protocols and bridges allow Bitcoin to exist across many blockchains, increasing its availability and yield potential.

- **Staking and Security Sharing**: In Proof-of-Stake (PoS) settings, Bitcoin can be staked to secure networks and generate rewards. Security protocols make use of Bitcoin's inherent robustness to protect and improve other networks.

- **Liquidity Pools and Yield Farming**: On decentralized exchanges (DEXs), Bitcoin can be used to supply liquidity and generate yield through transaction fees. Staking Bitcoin across several protocols is a key component of yield farming schemes in order to maximize earnings.

- **Decentralized Lending and Borrowing**: $BTC can be used as collateral to borrow other assets, which can then be utilized for additional yield production, or it can be deposited into decentralized lending protocols to earn interest.

## Examples of Bitcoin Yield Generation Protocols

Several innovative protocols, such as Stroom, StackingDAO, pStake, and Acre, are leading the way in Bitcoin yield generation, each offering unique strategies and solutions for earning returns on Bitcoin holdings within the DeFi ecosystem.

- **Stroom**: By leveraging the Lightning Network, Stroom enables Bitcoin yield through efficient liquidity provision without requiring $BTC to be locked, increasing transaction throughput and yield opportunities .

- **StackingDAO**: This protocol employs a combination of community governance and cross-chain interoperability to maximize Bitcoin yield across various DeFi platforms, offering users access to diverse yield streams​​.

- **pStake**: Utilizing liquid staking solutions, pStake allows $BTC holders to mint $yBTC, a liquid staking token that maintains asset liquidity while earning yield. This flexibility offers additional yield opportunities across the DeFi landscape​​.

- **Acre**: Acre focuses on advanced yield farming strategies with Bitcoin, enabling users to engage in multi-protocol yield generation to optimize returns. This approach capitalizes on Bitcoin's security and the programmability of DeFi ecosystems​​.

For more insights on how Bitcoin is shifting and how these industry players are building BTC staking solutions, check out our most recent AMA with all four protocols:

-> **[Staking Sats AMA on X (Twitter)](https://x.com/stakingcircle/status/1819372783740375193)**

## Conclusion

Bitcoin's transformation from a passive value store to an active player in the DeFi market signifies a major change in the way it functions within the financial system. Bitcoin has emerged as a promising yield-generating asset due to tokenization, cross-chain interoperability, and Proof-of-Stake (PoS) integration. This change not only brings more functionality to Bitcoin, but it also gives crypto investors additional ways to generate a passive source of income.

Making informed investment decisions requires a grasp of the underlying mechanics and strategies, particularly as the landscape of Bitcoin yield generation continues to develop. Bitcoin yield production is expected to become a crucial component of the cryptocurrency landscape, providing security and financial gain to its users, through protocols such as Stroom, StackingDAO, pStake, and Acre. 




Discover the transformative potential of Bitcoin Staking in generating returns on your idle BTC

Bitcoin Staking: How it Works and Why it Matters

Key figures from StackingDAO, Stroom, pStake, and Acre gathered for the _Staking Sats_ AMA to talk about Bitcoin staking and its potential benefits. he session covered topics such as attracting Bitcoin users to stake their BTC, user incentives, risks and challenges in Bitcoin staking, and the unique selling points of each protocol. 

The panelists discussed how their protocols integrate with DeFi, provide competitive yields, and guarantee security with strong security measures. Dive into the AMA highlights to gain insights into how these protocols are shaping the future of Bitcoin staking and DeFi integration.

**X Spaces**: [Staking Sats](https://x.com/stakingcircle/status/1819372783740375193)

**Speakers**: 

- Leeor Shimron ([X (Twitter](https://x.com/LeeorShimron)): Co-Founder @ StackingDAO ([X Profile](https://x.com/StackingDao))
- Slava Zhygulin ([X (Twitter](https://x.com/SZhygulin)): CTO & Co-Founder @ Stroom ([X Profile](https://x.com/StroomNetwork))
- Mikhil Pandey ([X (Twitter](https://x.com/PandeyMikhil)): Co-Founder @ pStake ([X (Twitter](https://x.com/pStakeFinance))
- Bryan Mahoney ([X Profile](https://x.com/blockchain_bri)): Co-Founder @ Acre ([X Profile](https://x.com/AcreBTC))

**Index**:

1. Panelists Introduction and Project Overview
2. Convincing Bitcoin Users to sStake BTC
3. Users incentives for Staking Protocols
4. Risks and Challenges in Bitcoin Staking
5. Unique Selling Points of each Protocol
6. Bitcoin Restaking narrative and future outlook

## 1. Panelists Introduction and Project Overview
- **Leeor (StakingDAO)**: Head of Growth, $100M TVL, 40,000 active users, 10% APY on Stacks blockchain.


“_We're the leading liquid staking protocol on the Stacks blockchain, having achieved $100 million in TVL within six months, thanks to our innovative approach to staking and user engagement._" 
- **Mikhil (P-Stake)**: Co-founder, pivoted from Cosmos to Bitcoin liquid staking.


“_We realized that Bitcoin has unmatched demand, which is why we've pivoted to focus on liquid staking for Bitcoin, bringing our experience from the Cosmos ecosystem._" 
- **Brian (Acre)**: Co-founder, Bitcoin in/out liquid staking platform.


“_Acre is all about Bitcoin in, Bitcoin out liquid staking, and we're here to tap into the natural desire of Bitcoin holders to grow their wealth while staying true to Bitcoin's principles._" 
- **Slava (Stroom)**: CTO and co-founder, building Bitcoin liquid staking on Lightning Network.


“_Stroom is pioneering Bitcoin liquid staking on the Lightning Network, aiming to contribute to Bitcoin's adoption as a payment system with an innovative approach to staking._" 
## 2. Convincing Bitcoin Users to Stake BTC
- **Leeor (StackingDAO) suggested a "barbell approach"**: majority in Bitcoin, small percentage in higher-risk/yield opportunities.


“_Bitcoin maximalists might be hard to convince, but a barbell approach—holding most assets in Bitcoin and a smaller percentage in riskier options—can outperform typical strategies._" 
- **Brian (Acre) emphasized innate human desire to grow wealth, even among Bitcoin holders.**


“_People have an innate desire to grow their wealth, and this extends to Bitcoin holders who are now looking for risk-free or low-risk ways to increase their Bitcoin holdings._" 
- **Mikhil (pStake) noted changing demographics of Bitcoin holders, more open to yield opportunities.**


“_Bitcoin holders today are not the same as they were ten years ago; there's a growing openness to exploring yield opportunities that weren't there before._" 
- **Slava (Stroom) pointed out basic math: higher risk must offer higher rewards.**


“_It's basic math; if you take on higher risk, you should expect higher rewards, and that's exactly what we aim to offer with our staking solutions._" 
## 3. User Incentives for Staking Protocols
- **StakingDAO:** Points program, 1 point per day for holding ST-STX.


“_For every ST-STX held, you earn one point per day, creating a straightforward incentive for our users._" 
- **P-Stake:** Convertible points system, leveraging existing token.


“_Our points are convertible to tokens on a monthly basis, allowing users to see real value from their points rather than just speculative hope._" 
- **Acre**: Focusing on Bitcoin-native yield, with plans for yield farming opportunities.


“_Acre offers Bitcoin-native yield, and we're exploring additional yield farming opportunities to maximize user benefits._" 
- **Stroom**: Planning liquidity mining program at mainnet launch.


“_We're leveraging a points program to test user behavior before launch, and plan to implement a liquidity mining program when we go live._"
## 4. Risks and Challenges in Bitcoin Staking
- **P-Stake identified trust assumptions in custodial solutions as a major challenge.**


“_Custodial solutions come with inherent trust assumptions, which is why we emphasize minimizing these risks through trustless mechanisms._" 
- **Acre formed a Security Council to oversee financial, security, and regulatory risks.**


“_Our Acre Security Council is tasked with managing risks across financial, security, and regulatory dimensions, ensuring transparency and user trust._" 
- **StakingDAO highlighted multiple audits and structural safeguards.**
“_We've undergone multiple audits to ensure structural safeguards are in place, protecting users from potential exploits._" 
- **Stroom emphasized the challenge of integrating with DeFi protocols for liquidity.**


“_Integration with DeFi protocols poses a challenge, but it's essential for liquidity, and we're actively working on building a track record to gain trust from established platforms._" 
## 5. Unique Selling Points of Each Protocol
- **StakingDAO**: Easiest way to stake STX tokens, 10% yield, outperformed Bitcoin by over 280% since 2021.


“_With a 10% yield and 280% outperformance since 2021, StakingDAO offers the easiest way to stake STX tokens and earn significant returns._" 
- **P-Stake**: Offers both liquid staking and managed self-staking options.


“_Our unique managed self-staking option allows users to earn yield without surrendering control of their BTC, setting us apart from other platforms._" 
- **Acre**: Bitcoin in, Bitcoin out model with native Bitcoin yield.


“_Acre's Bitcoin in, Bitcoin out approach is designed to maximize native Bitcoin yield, catering to those who prefer pure Bitcoin staking without complex tokenomics._" 
- **Stroom**: Staking on Lightning Network, contributing to Bitcoin's adoption as a payment system.


“_By building on the Lightning Network, we're not only providing staking solutions but also promoting Bitcoin as a true peer-to-peer cash system._" 
## 6. Bitcoin Restaking Narrative and Future Outlook
- **Mikhil (pStake)**: Bitcoin is ideal for restaking due to stability and global appeal.


“_Bitcoin's stability and global appeal make it the perfect candidate for restaking, providing secure and attractive yield opportunities._" 
- **Leeor (StackingDAO)**: Skeptical of restaking utility, emphasizes need for real use cases.


“_I'm skeptical about restaking unless it presents real use cases; we need genuine demand to support this narrative, not just speculative projects._" 
- **Brian (Acre)**: Sees opportunities in the DeFi layer for liquid restaking with Bitcoin assets.


“_Liquid restaking presents a huge opportunity within the DeFi layer, allowing Bitcoin assets to provide additional security and yield in innovative ways._" 
- **Slava (Stroom)**: Plans to partner with Ethereum-side projects like Symbiotic or Karak for restaking integration.


“_We are exploring partnerships with Ethereum-side projects like Symbiotic or Karak to integrate our liquid staked Bitcoin as a restakeable asset._" 




Deep dive into the Recap of our AMA focused on understanding how Bitcoin Staking is shaping defi and evolving the crypto landscape

Staking Sats AMA Recap

The _Collateral Damage: CDP & Stablecoins_ AMA together key figures from Angle Protocol, Phuture, Gravita, and Ebisu to debate the changing environment of decentralized finance. Speakers discussed important subjects such as managing borrowing rates in CDP protocols, the value of savings rates for stablecoins, regulatory compliance, and future liquidity and asset integration plans.

Dive into the detailed AMA highlights to learn about how these protocols are shaping the future of DeFi.


**X Spaces**: [Collateral Damage: CDP & Stablecoins AMA](https://x.com/stakingcircle/status/1816835979287630273)

**Speakers**: 

- Pablo Veyrat ([X (Twitter](https://x.com/pablo_veyrat)): Co-Founder @ Angle Protocol ([X Profile](https://x.com/AngleProtocol))
- Henrique Dias ([X (Twitter](https://x.com/0xhenrique_d)): CEO & Co-Founder @ Phuture ([X Profile](https://x.com/Davos_Protocol))
- Gravita ([X (Twitter](https://x.com/gravitaprotocol))
- Ebisu ([X Profile](https://x.com/ebisu_finance))

**Index**:

1. Managing borrowing Rates in CDP Protocols
2. Importance of Savings Rate for Stablecoins
3. Regulatory Compliance for Decentralized Protocols
4. Gravita’s Plans for Liquidity V2 Integration
5. Angle’s Focus on Improving on-chain forex
6. Davos’s expansion into BTC reward-bearing assets
7. Ebisu’s upcoming vault product for restaked assets



## 1. Managing borrowing Rates in CDP Protocols

- Pablo (Angle) stressed importance of market-set borrowing rates: 

“_I think borrowing rates need to be set by the market. And I mean, the best systems are the ones where it's not set by the protocol directly, but set by some market demand._"

- Gravita highlighted challenges with zero-interest model in current market conditions: 

“_Despite our best effort, we clearly can admit that the no interest rate model is not a model that works well in the current market conditions._"

- Henrique (Davos) revealed plans for dynamic borrowing mechanism using three key metrics: 

“_The plan for Davos V2 is to implement a dynamic borrowing mechanism where we will choose the highest among three rates._"

- Ebisu focusing on immutable code deployment with limited governance-modifiable parameters: 

“_The majority of the codebase should be deployed as immutable code, and the parameters that are modifiable via governance should be... decentralized._"

## 2. Importance of Savings Rate for Stablecoins

- Pablo argued savings rates are crucial for stablecoin competitiveness against USDC/USDT: 

“_Unless you don't have to because you have some other growth mechanism... you need to have a savings rate._"

- Gravita shared success of GRY integration on Dolomite lending market, yielding up to 15%: 

“_Dolomite, IO on Arbitrum, decided to list GRI as a lendable and borrowable asset... it can be even as high as 14, 15 percent._"

- Henrique announced plans for 100% yield capture mechanism for Davos: 

“_What we are going to do and we are implementing in the next couple of weeks is to actually have a 100% yield capture mechanism._"

- Ebisu planning vault products for real yield on restaked assets:

“_We're going to be launching a few Vault products focused on generating real yield with your restaked assets._"

## 3. Regulatory Compliance for Decentralized Protocols

- All protocols focusing on decentralization to address regulatory concerns: 

“_We are doing everything we can to fall within the scope of a fully decentralized protocol with an on-chain governance._" (Pablo)

- Gravita highlighted benefits of immutable code for regulatory compliance: 

“_Just, you know, immutable code from day one with the token launching together with the project._"

- Henrique mentioned working with European lawyers and implementing governance model: 

“We're working closely with a couple of lawyers in Europe to have everything addressed and to be as much transparent as we can._"

- Ebisu emphasizing immutable code deployment and decentralized governance: 

“We have to ensure the governance token is basically sufficiently decentralized to ensure that we're not seen as centralized._"

## 4. Gravita’s Plans for Liquidity V2 Integration

- Gravita revealed their interest in Liquity V2's business license model: 
“_We are very interested in what they're doing and we are very interested in... leveraging this new primitive in DeFi._"
- Highlighted potential for user-set interest rates in CDP model: 
“_Version 2 will set user-based interest rates... kind of defining a new primitive in DeFi._"
- Teased upcoming governance token launch following "Ascend V2" points campaign: 
“_There is currently a points campaign which is called Ascend V2... something that will lead to the point holders to likely receive sharing our governance token._"

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_ce99f94e94.png)
_Gravita Protocols HIghlights ([Source](https://www.gravitaprotocol.com/))_


## 5. Angle’s Focus on Improving on-chain forex

- Pablo announced Angle's efforts to enhance forex capabilities on-chain: 
“_We are building these solutions and expect some cool stuff to be released in the coming months._"
- Aim to improve cross-border payments and remittances using stablecoins: 
“_We all got in the space with this idea of hey, like stablecoins are going to help for remittances for cross-border payment._"

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_02847c6ce4.png)
_Angle’s Metrics ([Source](https://www.angle.money/))_

## 6. Davos’s expansion into BTC reward-bearing assets

- Henrique revealed partnerships for BTC reward-bearing assets and BTC sidechain integration: 
“_We have a couple of partners already lined up when it comes to BTC reward-bearing assets, BTC sidechain simultaneously._"
- Announced upcoming rebranding and major changes to Davos protocol: 
“_We will change a bit the image of the protocol and then come back stronger to the market._"
- Increased focus on BTCfi market: 
“_We'll try to become this go-to CDP protocol for those kinds of assets._"

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_6d048706e2.png)
_Davos Protocol Highlights ([Source](davos.xyz))_

## 7. Ebisu’s upcoming vault product for restaked assets

- Ethan announced plans for vault products generating real yield with restaked assets: 

“_We're going to be launching a few Vault products focused on generating real yield with your restaked assets._"

- Targeting launch in fall 2023: 

“_Keep your eyes peeled for these vaults that should be coming in the fall._"

- Collaboration with Liquity V2 planned for Q4 2023: 

“_Our goal is to partner with Liquity to offer the best dollar liquidity against your restaked collateral._"




Discover key insights from our AMA on CDP borrowing rates, stablecoins saving rates, and future DeFi innovations.

Collateral Damage AMA Recap

Bitcoin has long been criticized for its scalability issues. As it keeps growing in popularity, it became clear that the number one cryptocurrency has an inherent inability to handle large amounts of transaction data.

The Bitcoin blockchain can only process around 7 transactions per second, which pales in comparison to traditional payment systems like Visa. This limitation not only constrained Bitcoin's utility but also ignited internal conflicts known as the "Hash Wars" which culminated in a divisive hard fork that created Bitcoin Cash - a copy of Bitcoin with increased block size. 

This pivotal event in Bitcoin’s history underscored the urgency of exploring Layer 2 solutions—technologies built atop the Bitcoin blockchain to enhance its scalability and functionality.

## The Need for Layer 2 Solutions

It’s nothing new to discuss whether or not Bitcoin can scale using L2s or other scaling solutions. This ongoing debate has been happening since 2009, when Bitcoin blocks were limited to 1MB by Satoshi Nakamoto himself. A further example of the scalability issue was the SegWit fork in 2017, and for many years now, several different projects have been developing possible solutions for this limitation.

This problem arises as part of the Blockchain Trilemma, which refers to the trade-off between the following three pillars of Blockchain Technology: Scalability, Security, and Decentralization. Bitcoin prioritizes decentralization and security, at the expense of scalability.


![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_2e2c8adb76.png)
_The Blockchain Trilemma ([Source](https://blog.qu.ai/breaking-the-trilemma-8afc28c96ed2))_

Layer 2 solutions address scalability issues by processing transactions off the main blockchain, significantly improving performance without compromising security. They add an additional layer to the existing blockchain to allow faster, and cheaper transactions that are periodically settled on the main chain. This minimizes congestion, lowers fees, and speeds up transaction times, thereby improving Bitcoin’s scalability and overall user experience.

As an example, Ethereum which is known to have the same scaling constraints, currently is valued at around ~$430 Billion with ~44B in Total Value Locked (TVL) across its various Layer-2 (L2) solutions. These solutions represent about 10% of Ethereum's total value. 

Bitcoin, on the other hand, valued at about ~1.3 Trillion has only around ~2.5 Billion in L2 TVL.

This demonstrates the potential for the Bitcoin Layer 2 market, which currently represents a relatively symbolic percentage of 0.19% of Bitcoins total value. 


![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_fe406cd44c.png)
_Market Cap/Layer 2 Market Size Ratio in Billions of USD (Source: [CoinmarketCap](https://coinmarketcap.com/), [L2Beat](https://l2beat.com/))_

Beyond just improving scalability, L2s also open a host of new features and benefits for Bitcoin, such as: 

### - Smart Contracts and Decentralized Applications (dApps)

Layer 2 solutions allow Bitcoin to support smart contracts and dApps, just like Ethereum. This enables developers to create a wide range of applications, including financial services, decentralized finance (DeFi) protocols, gaming platforms, NFT marketplaces, etc.

### - $BTC Staking

Layer 2 solutions make Bitcoin staking easier, allowing users to lock up their Bitcoin in a trustless environment to earn rewards. This integration of staking methods increases Bitcoin's utility in proof-of-stake ecosystems by allowing users to participate in securing other blockchain networks while collecting rewards without having to move their assets off the Bitcoin network.

### - Lower Transaction Costs

The recent developments of Runes, BRC-20 tokens, Ordinals, and Inscriptions into the Bitcoin ecosystem have sparked once again renewed focus on scalability issues. The average transaction cost for Bitcoin has increased from ~1.5 USD in late 2023 to about ~5 USD in 2024 so far.

By removing transactions from the main chain, Layer 2 solutions dramatically cut transaction fees. This makes Bitcoin more useful for small, everyday transactions and micropayments, hence increasing its usability.

### - Faster Transaction Times

Transactions on Layer 2 solutions can occur almost instantly, dramatically improving the user experience by offering faster confirmations and lowering wait times.

### - Increased Privacy

Certain Layer 2 technologies use advanced cryptographic techniques like zero-knowledge proofs (ZKPs), which not only offload transaction workload on the base chain but also improve transaction privacy and secrecy while maintaining security.

BitVM has been the fundamental technology of zero-knowledge rollups on Bitcoin. This allows more secure validation operations for roll-up data than other scaling solutions that purely post a hash of their block data into Bitcoin blocks. These rollups perhaps inherit the highest level of BItcoin security at this current stage.

## Industry Insights and Expert Discussions

To provide a comprehensive understanding of Layer 2 solutions, we have been closely monitoring the industry and engaging with leading experts in the field. 

Through a series of in-depth AMA sessions, we've invited pioneers from various Layer 2 projects to share their insights and discuss the potential impacts of their technologies on the Bitcoin network. These discussions have illuminated the capabilities and challenges of each solution while also highlighting the diverse approaches to enhancing Bitcoin's functionality and efficiency. 

Below, we explore some of the most innovative Layer 2 projects that are shaping the

### Babylon 

At the forefront of these innovations is [Babylon](https://babylonchain.io/), a middleware protocol for Bitcoin Staking. Babylon introduces a robust mechanism for staking, which involves locking Bitcoin in a trustless setup, enabling Bitcoin holders to stake on PoS chains without the need to bridge assets between chains. This method not only secures the staked assets with Bitcoin’s robust security model but also allows stakeholders to earn yields directly from their participation in these PoS ecosystems​.

Babylons Staking testnet is currently live, with plans to launch its mainnet later this year. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_a2bf396709.png)
_([Source](https://babylonchain.io/))_

### Stroom Network 

[Stroom Network](https://stroom.network/) enhances the interaction between Bitcoin and Ethereum's blockchain ecosystems. It integrates the Bitcoin Lightning Network with EVM (Ethereum Virtual Machine) Based Blockchains, allowing users to generate revenue from the Lightning Network without the need to lock up Bitcoin or manage node infrastructure. This setup provides a streamlined gateway for liquidity and staking across blockchain networks​.

As Stroom nears its mainnet debut, it stands out by potentially expanding Bitcoin’s utility into the Defi Space. Here are some remarks directly from the Stroom team:

“Lightning Network - the very first scaling L2 for Bitcoin scalability proposed back in 2016 - is a sleeping giant, organically grown and most adopted Bitcoin L2 at the moment. At Stroom.Network, we are building Bitcoin Liquid Staking protocol - a tool, that will drive more liquidity to the Lightning Network, increasing its utility and hence speeding up its adoption”

For further insight, check out our AMA Highlights with Stroom: **_[Exploring Bitcoin Staking with Stroom](https://www.stakingcircle.com/research/exploring-bitcoin-staking-with-stroom-1/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_0c696be4d0.png)
_([Source](https://stroom.network/))_

### Rootstock (RSK) 

[Rootstock](https://rootstock.io/) brings Turing-complete smart contracts to Bitcoin, establishing a two-way peg that locks bitcoins on the Bitcoin blockchain and transfers them into smart bitcoins on the RSK blockchain. This sidechain solution scales transaction capabilities up to 100 transactions per second.

Rootstocks goal is to revolutionize the Bitcoin ecosystem by combining its security with Ethereum’s Smart Contract functionality.

Check out our AMA Highlights with Rootstock: **_[Exploring Bitcoin Staking with Rootstock](https://www.stakingcircle.com/research/exploring-bitcoin-staking-with-rootstock/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_6a670cc7dd.png)
_RootStocks Ecosystem Data ([Source](https://rootstock.io/))_

### Build on Bob (BOB) 

[BOB](https://www.gobob.xyz/) leverages the Ethereum Virtual Machine (EVM) to enable developers to create expressive, complex smart contracts and dApps on Bitcoin. This integration facilitates EVM compatibility while extending Bitcoin’s functionalities to support decentralized applications.

Bob intends to improve Bitcons’ programmability and expand usage across a variety of applications. BOB is currently rolling out its pre-mainnet campaign, preparing for the official launch.

The BOB team has this to say about their future roadmap and upcoming endeavors: 

“_BOB is currently live on mainnet launch as part of its Phase 1 hybrid L2 roadmap: bootstrapping as an Ethereum rollup. Its official points program "BOB Fusion" is currently live with 60+ projects already participating in the ecosystem program._”

For the full scoop, check out our AMA Highlights with BOB: **_[Exploring Bitcoin L2s with BOB](https://www.stakingcircle.com/research/exploring-bitcoin-l2s-with-bob/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_9a67c3de52.png)
_BOBs Roadmap ([Source](https://www.gobob.xyz/))_

### Botanix Labs

[Botanix Labs](https://botanixlabs.xyz/en/home) is creating the Spiderchain, a decentralized Layer 2 protocols based on Bitcoin. It integrates the Ethereum Virtual Machine (EVM), allowing dApps to benefit from Bitcoin's security. The Spiderchain's Proof-of-Stake consensus with decentralized multi-signatures improves Bitcoin's scalability and programmability without affecting its core protocol.

Check out our AMA Highlights with Botanix: **_[Exploring Bitcoin L2s with Botanix](https://www.stakingcircle.com/research/exploring-bitcoin-l2s-with-botanix/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_7a1aed1115.png)
_Botanix Ecosystem Stats ([Source](https://botanixlabs.xyz/en/home))_

### Elastos

Elastos intends to build a decentralized internet infrastructure that connects with Bitcoin. It combines blockchain with a peer-to-peer network, enabling secure digital assets and dApps. By leveraging Bitcoin's security, Elastos supports data ownership and a decentralized internet.

Check out our AMA Highlights with Elastos : **_[Exploring Bitcoin L2s with Elastos](https://www.stakingcircle.com/research/exploring-bitcoin-l2s-with-botanix/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_6a41b3d87d.png)
_Elastos Features ([Source](https://elastos.info/))_

### ProjectZKM 

ProjectZKM improves Bitcoin's scalability and privacy by utilizing zero-knowledge proofs (ZKPs). This technology enables private and efficient transactions, increasing throughput and privacy. It combines ZKPs into Bitcoin's Layer 2 solutions, promoting larger adoption and innovative use cases.​

Check out our AMA Highlights with ProjectZKM : **_[Exploring Bitcoin L2s with ProjectZKM](https://www.stakingcircle.com/research/exploring-bitcoin-l2-with-zkm/)_**

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_e68a91808d.png)
_ZKMs Features ([Source](https://www.zkm.io/))_

## The Bitcoin Layer 2 Landscape

Exploring several Layer 2 solutions reveals a thriving and dynamic landscape of innovation inside the Bitcoin ecosystem. Each protocol adds its own set of features that, when combined, open up a greater range of benefits. The Integration of the Ethereum Virtual Machine (EVM) model and architecture on top of Bitcoin, for example, adds a level of programmability and enables EVM-compatible applications to run to Bitcoin.

By developing Layer 2 solutions, Bitcoin can take advantage of these features while maintaining its high-security standards and decentralized nature. This possible transformation of the Bitcoin landscape positions Bitcoin not just as a store of value but also as a robust foundation for a new era of financial innovation.

## Benefits and Challenges

### Benefits:

- **Enhanced Scalability**: Layer 2 solutions can handle thousands of transactions per second, far surpassing Bitcoin's original capabilities.

- **Reduced Transaction Costs**: By moving transactions off the main chain, fees are significantly lowered, making Bitcoin economical for smaller transactions.

- **Faster Transaction Times**: Transactions on Layer 2 can occur almost instantly, providing a better user experience.

### Challenges:

- **Technical Complexity**: Layer 2 solutions involve complex protocols and new technologies that can be daunting for users and developers.

- **Adoption Hurdles**: Widespread adoption requires changes in user behavior and extensive integration with existing wallets and services.

- **Potential Security Concerns**: While Layer 2 solutions are designed to inherit Bitcoin's security, new layers introduce new potential vulnerabilities.

## Impact on the Bitcoin Ecosystem

Bitcoin is being reshaped into more than just a store of value, beginning to resemble Ethereum as “programmable money”. With Layer 2 solutions propelling this transformation further, enabling developers to build a more versatile and mature ecosystem, Bitcoin will be able to accommodate a wider array of services and applications. 

The significance of Bitcoin L2 solutions will only increase as Bitcoin expressivity continues to plow ahead and Defi primitives like money markets, stablecoins, Staking & Restaking, and perpetual coins arise. An exciting time ahead, which will bring lots of developments expected over the next couple of months.

## Fulfilling Satoshi’s Vision

Layer 2 solutions are crucial for the future of Bitcoin, offering the necessary scalability and functionality enhancements that can lead to broader adoption and more innovative applications. Staying informed about these technological advancements is essential for anyone interested in the future of Bitcoin and blockchain technology.

For more insights and detailed discussions on specific Layer 2 protocols, readers are encouraged to explore the AMAs on our X (Twitter) Page. Here, experts delve deeper into the potential and challenges of these transformative technologies.




Breaking down bitcoin’s layer 2 Innovations and what they mean for the future of the biggest crypto asset in the world

Unleashing Bitcoin's Potential: The Pivotal Role of Layer 2 Solutions

Phuture Finance develops multi-chain asset management infrastructure for on-chain products. They launched the Trackr Liquid Staking Index, investing in 9 liquid staking and restaking assets across 3 blockchains.

The Phuture V2 protocol supports a non-custodial multi-chain fund structure using Layer Zero for messaging. Upcoming products include Pendle Boosted ETH Index and partnerships for gaming and meme coin indexes. The PHTR token governs Phuture DAO, overseeing revenue distribution and licensing. 

Dive into the AMA highlights to explore Phuture Finance's innovative projects and future plans:

**X Spaces**: [Exploring the Defi Ecosystem w/ Phuture Finance](https://x.com/stakingcircle/status/1813227053166014889)

**Speakers**: 

- Oliver Mehr: CEO @ Phuture ([X Profile](https://x.com/phuture_finance?lang=en))

**Index**:

1. Phuture Finance Overview and Mission
2. Multi-chain Index Fund Technology
3. Tracker Liquid Staking Index
4. Upcoming Products and Partnerships
5. Regulatory Approach
6. PHTR Token and Governance
7. User Adoption Strategies






### 1. Phuture Finance Overview and Mission
-  Phuture Enables on-chain products ranging from passively managed index funds to actively managed funds

- Focuses on taking advantage of DeFi Legos composability

- Developed protocols enabling multi-chain asset management products

“_Our objective and our mission at Phuture has been to build cutting-edge asset management infrastructure to enable better on-chain asset management, on-chain products, everything ranging from index funds, passively managed index funds, to actively managed funds, to yield aggregated funds, and really taking advantage of the composability that DeFi Legos allow (...) where we are with our latest iteration, we're very much at the forefront of what's now possible in terms of multi-chain asset management._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_87af6b5d96.png)
_([Source](https://www.phuture.finance/))_

### 2. Multi-chain Index Fund Technology

- Uses Layer Zero as message passing protocol due to lack of upgradeability

- Implements multi-chain accounting with "home chain" and "destination chains" concept

- Uses reserve model for efficient redemptions without executing remote trades

“_We use layer zero as our message passing protocol. We did an analysis of a lot of different message passing protocols and we figured that the one thing that really is important when it comes to passing messages across different chains is a lack of upgradeability. (...) we have the idea of a home chain and then we have an idea of a concept of destination chains, the home chain knows everything that's going on all of the destination chains (...) So if someone comes to the home chain to mint the index, we can mint it atomically. I think this is really important because a lot of the time when people are talking about multi-chain products (...) the advantage of this reserve model is that where if let's say there's $10,000 in the reserve and someone wants to come and redeem $2,000 of the index that they hold, they don't need to execute any remote trades or any remote transactions for that._”

### 3. Trackr Liquid Staking Index

- Invests in 9 liquid staking and restaking assets across 3 blockchains (Avalanche, Polygon, Arbitrum)

- Taps into native liquidity on each chain, avoiding wrapped asset liquidity

- Supports large capital without sacrificing execution costs

“_And so the Trackr Liquid Staking Index is an index that invests into nine different liquid staking and restaking assets across three different blockchains. And so, you know, in this we have Avalanche, we have Polygon, and then we have Arbitrum (...) And it allows us to tap into native liquidity. So, you know, there's no need for wrapped asset liquidity. We can buy sAVX on the Avalanche blockchain with the highest level of liquidity. (...)  the end user is that we can support a product that's very large in terms of capital without having to sacrifice on very good execution costs when we trade._”



### 4. Upcoming Products and Partnerships

- Pendle Boosted ETH Index is launching in 3-4 weeks, aiming to boost yield to over 20%
- ARTX AI fund launched recently, investing in USDC, STE, and wrapped Bitcoin
- Developing multi-chain gaming index with major brands, including assets from Ronin chain
- Working on meme coin index partnership
“_The next product that we're going to be launching is the Pendle boosted eth index and so this is going to essentially take the trackrr liquid staking token, which is probably generating around four percent yield right now and we're looking to really boost that up to north of 20 (...) So we are a protocol and we're exploring many different sort of sectors. The first one we've just launched recently is the ARTX AI fund. And it's essentially a mega cap fund investing into USDC, STE and wrapped Bitcoin.(...) And then we're also looking at gaming indexes because this really takes advantage of a lot of our multi-chain capabilities (...) And then we're also working on something on the meme coin side, which I think we've, it's an area that we've wanted to get into for a long time_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_b9e404998a.png)
_([Source](https://www.phuture.finance/))_

### 5. Regulatory Approach

- Operates through Cayman Foundation, industry-standard structure for DeFi protocols

- Blocks access from UK and US due to regulatory considerations

- Protocol designed to be decentralized, with no single controlling entity

“_Our personal setup is that we have a Cayman Foundation that launches and manages all of our products. (...) The laws really depend on where you launch the product (...) And essentially, the way that we've handled it, we've just blocked the UK and the US. The US is just more out of caution. The UK, it's clear in their financial promotion laws that it doesn't really matter where the fund comes from (...) we manage the funds you know it's all blockchain based so it's completely decentralized there's no really there's no real one person or you know or entity that is that is controlling everything_”

### 6. PHTR Token and Governance

- $PHTR token holders govern Phuture DAO. 

- Control key multisigs for activities like rebalancing and treasury functions

- Approve licenses for new chains or projects to use Phuture V2 protocol

- Offers staking functionality for PHTR holders to earn yield

“_The Phuture foundation includes the Phuture DAO right in the Phuture DAO is managed by the PHTR token holders. And so the multisigs that are sort of, you know, the PHTR token holders have given control of some of the key multisigs to a number of wallets that all agree and sign on specific activities like rebalancing and other treasury functions. So yeah, we operate as a DAO using the PHTR token. (...) We also have a staking functionality. For those that want to generate yield on their $PHTR_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_8d205e5124.png)
_([Source](https://www.phuture.finance/))_

### 7. User Adoption Strategies

- Focused on partnering with established brands with large communities and distribution channels

- Previously explored "index wars" competitions to drive engagement

- Believes long-term adoption will come as crypto matures and more users seek diversification

“_We're more focused on working with the right partners that have really good brands that have really big communities that have good distribution channels. I think that for us is much more important than the incentives. (...) Things we've explored in the past is like, we call them like index wars, where we have like index one, like say one DeFi index versus our DeFi index. And we have like a competition to see who can outperform each other over like a 30 day period. (...) i've been in crypto since 2016 and since that time it's mostly been trailblazers right people that want to do the research on their own, who want to invest into no diversification_”




Exploring the Defi Ecosystem w/ Phuture Finance

In a recent AMA, BitLayer described its distinctive strategy for improving Bitcoin scalability using a native Layer 2 solution based on the BigVM approach. This seeks to improve transaction verification and build trustless bridges by incorporating native Bitcoin functionality and DeFi dApps.!

**[BitLayer's](https://www.bitlayer.org/)** mainnet, which is already operational with DeFi projects, will switch to a roll-up model for improved scalability and lower fees. The roadmap includes delivering a Bitcoin finality feature this year, with the goal of increasing broaden crypto adoption by simplifying user experiences and lowering entry barriers.

Dive into the AMA highlights to explore BitLayer's plans and innovations in detail.

**X Spaces**: [Exploring Bitcoin L2s with Bitlayer](https://x.com/stakingcircle/status/1806636297823392110)

**Youtube**: [Exploring Bitcoin L2s with Bitlayer](https://www.youtube.com/watch?v=NF0yFg7pqEE)

**Spotify**: [Exploring Bitcoin L2s with Bitlayer](https://open.spotify.com/episode/3kjZi96xyUFvXNnddln1AL)

**Speakers**: 

- Kevin He: Co-Founder ([X Profile](https://x.com/0xkevinhe)) @ Bitlayer ([X Profile](https://x.com/BitlayerLabs))

**Index**:

1. Bitcoin Scalability and Layer 2
2. BitLayer’s Unique Role in Bitcoin Layer 2s
3. BitLayer Mainnet Activities
4. BitLayer’s Approach to Bitcoin Transactions and Fees
5. User Interaction with BitLayer Mainnet
6. Roadmap and Future Developments for BitLayer
7. Engaging with Bitlayer and Adding Value to the Ecosystem

## 1. Bitcoin Scalability and Layer 2

- Kevin shared insights on Bitcoin scalability challenges and the role Layer 2 solutions play.
- BitLayer is building a **native BTC Layer 2 using the BigVM approach**.
- Bitcoin verification ability is critical for Layer 2 developments according to Kevin.
- BitLayer's aim is to enable verification on Bitcoin and create a trustless two-way peg bridge.

“_We are building a native BTC layer 2 following the BigVM approach. (...) Most of the projects we can hear about in the market have pitched me before. And I know most of their teams, their solutions, their innovations. And yeah, but unfortunately, I think most of them are not making the real innovations, solving the real problems. (...) I think the key part for Bitcoin layer two is to build native BTC layer 2 with Bitcoin verification ability, so without this people can only build sidechains which is not considered to be the best model in the long run. (...) And based on the verification ability, we are going to build a trustless two-way bridge._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_233fada0a2.png)
_([Source](https://www.bitlayer.org/))_

## 2. BitLayer’s Unique Role in Bitcoin Layer 2s

- BitLayer differentiates by pursuing native Bitcoin functions for NFT tokens, settlement layers, and issuing Bitcoin-based tokens.
- State channels have limited functionality and sidechains aren't ideal long-term; hence, **BitLayer is following a roll-up model** to enable Layer 2 transaction verification on Bitcoin itself.

“_So what will Bitlayer bring differently from the other protocols? Before using Bitcoin as native NFT tokens. Second, use Bitcoin as the settlement layer or related functions. Third, if you have a token or something like that, you need to issue Bitcoin. (...) All the state channels actually exist for years. But to be frank, in my mind, they are not yet making mass adoption. (...) sidechain is a standalone blockchain with a bridge that connects Bitcoin and the specific sidechain. And the bridge is usually implemented by multi-sig technology. According to these conclusions, we think building a roll-up equivalent model layer 2 is the right path as it should be done. And the key part is to implement a roll-up model and slap-out verification ability. This is why we choose BitVM as our main approach and we are still in this path._”

## 3. BitLayer Mainnet Activities

- Protocols building on BitNetworking mainnet include DeFi applications such as Dex, lending, and yield farming
- Formed **partnerships with top-tier protocols for restaking** and providing yield opportunities within the staking framework.

“_And back to the projects, I think the DeFi suites like the DEX lending, Yield farming and these projects is the foundation of the basis of the whole ecosystem. So we have plenty of these projects already deployed on Mainnet V1. (...) So we are actively partnering with several top tier protocols like Babylon and Lorenzo and Lombard. All these kind of projects provide more yield or more application scenarios in the staking framework._”


## 4. BitLayer’s Approach to Bitcoin Transactions and Fees

- BitLayer focuses on security through **verifications that happen on Bitcoin**, creating the capacity to verify state transitions off-chain
- Sees bridge tech with a multi-sig approach as a starting point, aiming to evolve to a system where Layer 2 transactions can be checked on Bitcoin
- Transaction fees for sending native tokens are about **$0.05**; account abstraction technology is being employed for a better user experience and to pay gas fees in stablecoins via partnerships.

“_So we want to verify what happens in layer 2 on Bitcoin (...) If we are building a truly complete VM support layer 2 we can easily verify the transaction (...) but if people withdraw from layer 2s back to layer 1s, bitcoin don't have the ability to verify it. (...) And the bridge is usually implemented by multi-sig technology (...) We need to build something with stronger relationship or can verify what happens on layer 2 solutions. That means we can follow the rollup model, like the Ethereum layer 2s do (...) The native token for BitLayer is BTC (...) And it will take $0.05 to send a native token to others. (...) We adopt account abstract technology to provide users with stablecoin paying._”

## 5. User Interaction with BitLayer Mainnet

- **BitLayer Mainnet V1 is 100% EVM-compatible**, facilitating an easier migration for developers.
- Users can use Metamask or OKX wallets to interact with BitLayer and bridge Bitcoin assets to Layer 2, emphasizing a reduction in entry barriers.

“_The mainnet v1 is totally 100% EVM compatible. (...) It will be super easy to migrate the existing projects which are written in solidity to BitLayer. (...) Users and developers are facing the EVM environments and using the EVM wallets like Metamask, OKEx wallet to interact with the blockchain and can use the Bitcoin wallet to bridge assets into layer 2s. (...) We just want to lower the entrance barriers for the users and developers._

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_42309ed2aa.png)
_([Source](https://www.bitlayer.org/))_

## 6. Roadmap and Future Developments for BitLayer

- Plan three Mainnet versions with seamless migration: Proof of Stake blockchain (V1), transition to a roll-up model using BigVM (V2), and further developments.
- **Expect V2 Mainnet to launch within the year**, bringing Bitcoin Finality and verification capabilities to the ecosystem.

“_According to our roadmap, we will have three versions of Mainnet which can be seamlessly migrated. The V1 is what we call BitLayer PoS. (...) The V2 as we call it Bitcoin Finality v1, which means we will transform from PoS model to roll-up model using BigVM approach. (...) According to our plan, we are going to shift the testnet in two months (...) and we will shift to  mainnet this year. I think the V2 with the Bitcoin finality ability will benefit the whole ecosystem._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_0eb84962e5.png)
_([Source](https://www.bitlayer.org/))_

## 7. Engaging with Bitlayer and Adding Value to the Ecosystem

- BitLayer aims to introduce Bitcoin finality abilities, with verifications for state transitions on or off Bitcoin's chain.
- Focused on achieving mindset changes: **Bitcoin can issue assets, engage in DeFi, and drive wider crypto adoption.**
- Aiming for enhanced user experiences with simplified login and transaction processes to broaden the audience.

“_We are trying to bring the Bitcoin finality ability to Bitcoin, which means that we can verify the state transition on layer 2 or off-chain. This can be a huge thing on Bitcoin. (...) First, Bitcoin can issue assets. (...) Second, we hope people can have the mindset shift that can believe Bitcoin can earn yield or can enter DeFi (...) Third, we think people are trying to use Bitcoin's popularity to achieve mass adoption of crypto. (...) We need to lower the user entrance barriers like using the account abstract, using stablecoin payments, (...) to make the user forget the key phrase, forget the private key, ideally they'll just be using their email to log in._”


Dive into the AMA highlights to explore BitLayer's plans and innovations in the Bitcoin Layer 2 landscape.

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Exploring Bitcoin L2s w/ Bitlayer

Explore the highlights of the Mega Restaking Space to obtain useful insights into the strategies and ideas driving the fastest-growing sub-sector of Defi in 2024


Mega Restaking Space Recap

**[CoW Swap](https://cow.fi/)**, leveraging CoW Protocol, optimizes trading through batch auctions to improve efficiency and User-Experience. The CoW Token is essential to CoW DAO governance and compoensates solvers for their participation. 
Users benefit from increased security and, potentially, improved profits due to interoperability with other protocols. In addition, CoW Swap is undergoing a significant rebranding effort to make the platform more accessible and user-friendly. This rebrand is intended to improve user understanding and engagement. For further insights and upcoming developments, check out the highlights below:

**X Spaces**: [Exploring the Defi Ecosystem with CoW Swap](https://x.com/stakingcircle/status/1805601876001378580)

**Speakers**: 
- Alex Viñas: Product Marketing & Business Partnerships ([X Profile](https://x.com/VinyasAlex)) @ CoW Swap ([X Profile](https://x.com/CoWSwap))

**Index**:
1. Bear market Experience
2. CoW Swap Overview
3. MetaDex Aggregator Explained
4. Security Measures for CoW Swap
5. CoW Token and CoW DAO
6. User Yields and Rewards
7. Final Remarks

## 1. Bear market Experience

- The bear market revealed the true motives and perseverance of people in the crypto space:

“_You see the true faces of people in the darkest times, right? So here it's the same, you know. You saw who was here for what and for what reasons and you know cards were upside down like flipped so everyone could see everyone's cards_”

- The individuals who stayed kept their roles and helped create better outcomes:
“_I mean the ones that stayed have maintained their position and things have evolved and to a better outcome._”

## 2. CoW Swap Overview

- CoW Swap is built on the CoW Protocol which uses batch auctions:

“_CoW Protocol is the first trading protocol to actually leverage intents in Ethereum when we launched this in 2020. (...) But the whole idea was that we were going to leverage batch options to actually achieve better settlements for the users._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_9dfd61a6bc.png)
_([Source](https://cow.fi/))_
- Users sign orders for trades, which are grouped together and solved by solvers competing against each other:

“_So the whole idea was to create a protocol that would actually batch orders into a single auction and then have this competition of solvers who would compete to win the right to settle the orders. Within this competition, the solver that won would actually be the one that would settle this intent to trades either with a private liquidity, on-chain liquidity or any other means like peer-to-peer orders that the users would do._”

- Solvers find the most efficient transaction routes and carry out transactions, ensuring trades are completed at a consistent price:

“_CoW Swap is your common Dex interface let's say where you're used to what you're seeing and from there what you basically do is you sign an order that says that I am willing to accept me selling my token A for my token B. And then from there this order gets registered into the actual order book protocol. and then it's passed on to these solvers for them to find the most optimal route for settlement._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_bd53f470b4.png)
_([Source](https://cow.fi/))_

## 3. MetaDex Aggregator Explained

- CoW Swap is a MetaDex aggregator, compiling quotes from individual aggregators:

“_When you connect to CoW Swap and request a quote you're actually getting exposed to all the single aggregators all at once. This way you know that in the event that the tokens you're trading Paraswap might be better off that 1inch, for example, and you're covered because you're also asking Paraswap for a quote and vice versa_”
- Users receive rates from various sources, ensuring they receive the best routes and prices thanks to solver optimization:

“_So the whole point from that angle is that basically instead of having the users be the ones that execute the transactions, basically what we have is this, as we mentioned, this system of solvers that compete for the right to set up the user's order. And basically these solvers are the ones responsible for executing the orders on chain._”

## 4. Security Measures for CoW Swap

- Users only have to approve the CoW Protocol smart contract for safe trading:

“_The cool thing is that the users aren't really exposed to anything because to leverage everything that protocol has to offer, you only need to approve the protocol smart contract. So in the event that you want to trade some new token that the solver might have to do, We're the one that's doing the approval on your behalf so that you don't have to worry about the approval that you've done with your wallet._”

- CoW Swap uses a double verification system to ensure the agreed limit price is upheld in settlements:

“_The CoW Protocol settlement contract itself, the transactions are not able to ignite as long as they can do it. If the result that the solvers propose is less than the limit price that you signed via the order. So actually there is a double verification system in which the settlement contract validates that you actually made the correct signature and also that you are the owner of such funds._”!

## 5. CoW Token and CoW DAO

- CoW token sets the course of CoW DAO and any possible revenue:

“_We do have a token, it's called CoW. It's an easy decision to name. And the role within the ecosystem of the CoW token is first to control the direction of the CoW DAO, right? To basically have a say on where the DAO is going, what the DAO is doing, and of any possible revenue that it might generate through all these products._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_d24334427b.png)
_([Source](https://cow.fi/))_
- Solvers receive CoW tokens as rewards for correctly settling batches:

“_Then also, another part in which for the token is actually used is for incentivizing the solver competition. So each solver gets rewarded CoW tokens for settling correctly the right batch._”
- A veModel and liquidity pool rewards could happen, but it would rely on CoW DAO voting:

“_So this is possible but it's something for the DAO to vote on and decide. It's something that we haven't actually played around with yet but definitely it's something that is doable._”
- Token issuance is controlled by the DAO, with a budget allocation vote happening about every 6 months for solver incentives:

“_So basically the way it goes is that the DAO did the airdrop with the initial TGE and from there certain chunks of the emissions were set (...) and then every six months more or less the DAO gets a vote on how much is the solver budget, how much of the tokens are we actually allocating for the solver competition._”

## 6. User Yields and Rewards
- The DAO offers liquidity incentives on Balancer, but there isn't a staking system within the DAO:

“_There are other ways in which there are other protocols that actually offer yield with the token or whatever, but within the DAO itself, this is something that besides the liquidity incentives that we have on Balancer and whatever, we don't have._”

## 7. Final Remarks and Follow-Up

- Follow Alex and CoW DAO on Twitter for updates on products and events. A major rebrand of CoW Swap has started to make it more user-friendly and easier to understand:

“_Twitter is the best place to follow me and also both the protocol, CoW Swap. We actually, like while we were on the top, we just launched a major rebrand for making CoW DAO more understandable and actually easier to grasp the different product lines that  CoW DAO is tackling_”
- For upcoming events at ETHCC, LRTfi Summer, and BTC Summit, check Twitter for the most recent news:

_Staking Circle: “As you guys know, just a final reminder, you will have two events at ETHCC, both LRTfi Summer and BTC Summit. You can look into our Twitter profile as well to find the latest on the events. The latest sponsors have already been out. We have a pretty packed alpha ready for you guys, so don't forget to stay tuned.”_


CoW Swap betters trading with batch auctions on CoW Protocol, offering security and yield benefits. Discover more through this AMA recap, detailing the CoW token's governance role and the CoW Swap rebrand.

Exploring the Defi Ecosystem w/ CoW Swap 

Leeor presented StackingDao's contribution to the Bitcoin ecosystem through stSTX, a liquid staking token on Stacks. The staking procedure provides benefits such as no minimum deposit and rewards given in STX, with a significant TVL milestone of $100M achieved.

**[StackingDao](https://StackingDao.com/)** is bringing risk mitigation through a distributed signer program and a growing network of trustworthy node operators. Upcoming developments include analytics tools for the Stacks ecosystem as well as details on restaking options following the Nakamoto upgrade. For more info, check out the highlights below.

**X Spaces**: [Exploring Bitcoin Staking with StackingDao](https://x.com/stakingcircle/status/1803790092542075127)

**Youtube**: [Exploring Bitcoin Staking with StackingDao](https://www.youtube.com/watch?v=Llq8acNhOH4)

**Spotify**: [Exploring Bitcoin Staking with StackingDao](https://open.spotify.com/show/1TAz9MQl8sLeAA92Wke24A)

**Speakers**: 
- Leeor Shimron: Head of Growth ([X Profile](https://x.com/LeeorShimron)) @ StackingDao ([X Profile](https://x.com/StackingDao))

**Index**:
1. StackingDao Intro
2. Liquid Staking and Stacks
3. Stacking Process
4. Growth Strategy and TVL
5. Risk Mitigation and Node Network
6. Additional Notes
7. Stacks Ecosystem and StackingDao Development
8. Engagement and Information Channels

## 1. StackingDao Intro

- Leeor recently joined StackingDao as the head of growth, previously launched a fund called NovaBlock Capital, worked at Fundstrat, and was with Kraken's BD and partnerships teams:

“_But for me personally, I've been working professionally in the space since around 2017 or so. I started by launching a fund called NovaBlock Capital. (...)  from there I actually moved on to work at Fundstrat, which is a market research firm led by Tom Lee (...) Then I was actually tapped by a recruiter at Kraken to join their BD and partnerships team. So I worked at Kraken for a couple of years on development and partnerships initiatives._”
- After Kraken, joined DRPC, part of the P2P staking family, before moving to StackingDao:

“_A year ago, I joined DRPC, which is basically a distributed RPC network that's part of the P2P staking family, P2P itself being one of the larger institutional staking providers. (...) And at StackingDaos, and I'm sure we'll get into, you know, we have a signer program where we've onboarded a permission pool of validators to offer just really high performance and help to contribute to the health and decentralization of the Stacks blockchain._”

## 2. Liquid Staking and Stacks

- Explained the concept of liquid staking, where you can earn rewards for participating in consensus and maintain liquidity:

“_It's basically the way where you can participate in consensus and earn consensus rewards for proof of stake networks. So obviously Ethereum being the largest while also maintaining liquidity._”
- Introduced stSTX as StackingDao's liquid staking token:

“_So you're issued a liquid staking token. In the case of Lido, it's staked ETH. In the case of StackingDao, it's stSTX or stacked STX. And the principle is the same. You know, allows you to earn consensus rewards, which in Stacks'case right now is around a 9% yield._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_0df70d335f.png)
_([Source](StackingDao.com))_

- Stacks is a Bitcoin L2 launched in January 2021, which introduced smart contracts and programmability to Bitcoin while retaining its security properties:

“_So stacks is the leading bitcoin L2, they launched their mainnet in January 2021. So I mean, although there's been other attempts at creating protocols on Bitcoin to enhance the scalability and functionality of Bitcoin_”

- Stacks allows the building of a full range of applications such as DeFi, NFTs, and memecoins, thanks to its smart contract capabilities:

“_And what it did was it enabled or brought over smart contracts and programmability to Bitcoin. So, you know, if you could build DeFi applications, you could build NFT projects, you can launch mean coins. You can really do all the fun things that, you know, people in Ethereum or Solana or other ecosystems enjoy_”

- Upcoming Nakamoto upgrade around August will further align Stacks with Bitcoin and introduce SBTC, a Bitcoin asset on Stacks:

“_While also another interesting thing about the Nakamoto upgrade is that alongside the Stacks community is going to be launching a tokenized version of Bitcoin called SBTC that will be kind of like the native Bitcoin asset that will be able to be deployed across Stacks applications_”


## 3. Stacking Process

- To stake, users navigate to StackingDao.com, connect their wallet, deposit STX tokens, and receive stSTX:

 "_So it's super simple for a user. They just go to StackingDao.com. They can connect their wallet and they just deposit STX tokens. And once they do that, they get the stSTX token, which is the liquid staking token_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_3bf42dca6a.png)
_([Source](StackingDao.com))_
- StackingDao provides the benefit of allowing any deposit amount and facilitates automatic payouts of rewards in STX:

“_So with StackingDao, another benefit is that you can deposit any amount that you want. You can earn those stacking rewards. We automatically pay it out to the holders in Stacks tokens_”

- Stacking on Stacks happens in two-week cycles, with a high threshold for solo stakers at 90,000 STX:

“_But that's kind of the minimum just to be stacking is you have a two-week minimum. And typically, if you're a solo validator, you're running a node yourself, you have to stack with 90,000 STX tokens, which is quite prohibitive, as you can imagine, for just individual users_”

- Rewards come from transaction fees and production of new Stacks tokens, originally paid out in Bitcoin but converted to Stacks for users:

“_And you actually, if you're stacking STX tokens, you're actually earning not Stacks rewards, but you're earning Bitcoin rewards. So what we do is we convert those Bitcoin rewards to Stacks so that everything stays within Stacks._”

## 4. Growth Strategy and TVL

- Achieved a rapid TVL growth to $100M, emphasizing the success of their strategies:

“_I think like right now where things stand, we're in a pretty privileged position. Our growth has been very strong. So we launched just in December of last year. So we're about six months into our journey. But we were able to amass 100 million TVL faster than any other liquid staking project that really ever existed._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_16473ec9c7.png)
_StackingDao TVL Growth in 2024 ([Source](StackingDao.com))_

- Actively seeking partnerships and community engagement to sustain growth:

"_I'm always looking for new partnership opportunities with other projects in the Stacks ecosystem, or perhaps even with other Bitcoin L2s._”

## 5. Risk Mitigation and Node Network

- Mentioned the distributed signer program as their main risk mitigation strategy:

“_Through our distributed signer program, that is kind of the biggest risk mitigation initiative that we've undertaken. And actually through that, by onboarding really large and robust and enterprise-grade node operators. We're able to receive or generate high rewards on behalf of our users. Because they have the best performance, they have limited downtime, they're actually able to earn rewards in the best way for their users_”
- Collaborated with reputable node operators like Blockdaemon, Chorus one, and Kiln:

“_So today we've onboarded seven of these larger node operators into our program. These are folks like, I'm sure, some household names you've heard of like Blockdaemon, Chorus one, Kiln, Restake. And we're… actually in conversation, pretty, you know, progressive conversation with about half a dozen others_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_734cf5a25f.png)
_Validators on StackingDao ([Source](StackingDao.com))_

## 6. Additional Notes

- stSTX rewards auto-compound, offering an advantage for investors:

“_So what we like to say is that if you're bullish on Stacks and you want to express a long position or a bullish view on stacks, StackingDao really is the best way to do that because based off of this mechanism, your return basically auto compounds, your rewards auto compound in the STX native token._”

- Plans include leveraging node operator networks to increase stSTX awareness and adoption:

“_We're also going to be leaning on them to tap into their communities to just generate more awareness about StackingDao and get more stSTX through the door, hopefully._”

## 7. Stacks Ecosystem and StackingDao Development

- Leeor aims to make StackingDao the analytics hub for the Stacks ecosystem:


“_What I can share is we actually want to be kind of like the analytics hub across the Stacks ecosystem. So we're actively working on analytics dashboards and an analytics page to show more about the actual like stacking or validator process_”

- They're developing dashboards and an analytics page to show the stacking or validator process with details on largest validators, Bitcoin rewards, and associated fees:

“_Who are the largest validators? You know, how many? How much Bitcoin rewards are they earning? What are the fees associated with that? So we want to kind of be the hub for all things stacking across the Stacks ecosystem. And so just stay tuned for more exciting updates on that._"

- StackingDao aims to address data and analytics gaps within the Stacks ecosystem, given its early developmental stages:

“_Just because we identified that data and analytics is kind of a big point that's not quite built out yet for Stacks, given we're still pretty early here for the development of our ecosystem. So we're just very mindful of some of the holes that we need to help fill._”
- Leeor referred to upcoming restaking opportunities post-Nakamoto upgrade, with more details on SBTC and Bitcoin restaking opportunities to come:

“_And something else as well, I think will be very interesting to look at as well. Like clearly like restaking has been a big meta across this bull market. And I think especially after the Nakamoto upgrade is live, there'll be a lot of restaking opportunities, particularly with SBTC and Bitcoin_”

## 8. Engagement and Information Channels


- Leeor, head of growth, keeps DMs open for questions about Stacks and StackingDao:

“_So, you know, please follow myself as the head of growth. My DMs are open. So always happy to answer any questions or talk about._”
- Leeor suggests depositing idle Stacks at StackingDao for auto-compounding rewards:

“_And something else as well I'd like to mention, if you have any idle stacks in your wallets, please don't hesitate to deposit on StackingDao to earn auto-compounding rewards._”
- Leeor mentioned stSTX as the best way to express a bullish view on Stacks, not just holding STX:

“_stSTX is the best way to express a bullish view on stacks._”






StackingDAO is bringing risk mitigation through a distributed signer program and a growing network of trustworthy node operators. For more developments on how StackingDAO is thriving in the Stacks ecosystem, check out our AMA highlights below:

Exploring Bitcoin Staking w/ StackingDAO

**[Bitfinity](https://bitfinity.network/)** is developing an EVM-compatible sidechain to integrate Bitcoin into Defi, improving security and lowering transaction costs through chain key technology. Their ecosystem plans to include the Bitfinity Token used for governance and transactions, with a potential staking feature.

The mainnet launch date is set for two months, with incentives for community engagement, builders, and liquidity providers. Stay tuned for updates and partnership announcements from Bitcoin Layer 2 events in Brussels, as well as Bitfinity’s social media channels. For further details, explore the AMA highlights below:

**X Spaces**: [Exploring Bitcoin L2 with Bitfinity](https://x.com/stakingcircle/status/1803065236271800686)

**Speakers**: 
- Sam: Head of Partnerships ([X Profile](https://x.com/sirsamjenks)) @ Bitfinity Network ([X Profile](https://x.com/bitfinitynet))

**Index**:
1. Bitfinity Network Overview
2. Bitfinity’s Wallet and Chain Key Technology
3. Advantages of Chain Key Technology
4. Bitfinity Network Token and Ecosystem
5. Defi Strategy and Solidity Developers
6. Upcoming Bitfinity Network Developments
7. Project Partners
8. Engagement and Growth Strategy
9. Sam’s Final Thoughts

## 1. Bitfinity Network Overview

- Bitfinity is building the next generation EVM, originally started with a wallet called InfinitySwap, focusing on unlocking Bitcoin liquidity in the DeFi space:

“_And that's what Bitfinity Network is, right? It's a Bitcoin sidechain, but we've also built our own EVM. So we're fully EVM compatible. We're able to attract Solidity developers, who are the most popular developers at Dapps. And we're able to use the ICP technology to bridge the assets from Bitcoin, Ethereum._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_8357d8cfb4.png)
_Bitfinity EVM Summary ([Source](https://bitfinity.network/))_

## 2. Bitfinity’s Wallet and Chain Key Technology

- Bitfinity's initial project was a wallet, InfinitySwap, developed about 2 to 3 years ago:


“_So initially. Bitfinity Network, the team, was working on a wallet. It's called InfinitySwap and built out what was at the time quite an impressive wallet within the space about two, or three years ago_”
- Developed an EVM-compatible Bitcoin sidechain using ICP's chain key technology:

“_So we're fully EVM compatible. We're able to attract Solidity developers, who are the most popular developers at Dapps. And we're able to use the ICP technology to bridge the assets from Bitcoin, Ethereum_”
- The goal is to unlock Bitcoin's potential in DeFi, and build next-generation Ethereum-based DeFi apps that incorporate Bitcoin liquidity:

“_Ethereum layer twos, everybody's looking at the liquidity of Bitcoin, right? How do they unlock that asset? That is the $1 trillion question (...) Ethereum-based apps this opportunity, if you want to call it that, to potentially tap into that liquidity and unlock that asset that I talked about._”

## 3. Advantages of Chain Key Technology

- Chain key technology provides security for assets bridged between Bitcoin and other blockchains, increasing transaction speed and reducing costs:


“_So if you bridge your Bitcoin on Bitfinity Network when we're live, you will receive whatever the value is in CK Bitcoin, right? Now that allows you to then act in DeFi activities or, you know, whatever you want to do, it's up to you, but it's going to dramatically decrease the cost of transactions and increase the speed. So it's unlocking that DeFi potential._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_53ce570cdc.png)
_Bitfinity Network Data ([Source](https://bitfinity.network/))_
- There's about 18M in CK Bitcoin already within the ICP ecosystem, which Bitfinity aims to add to upon going live:

“_So if you wanted to go and check, like, what the existing TVL was, you could go and hit that up on DeFi Llama. And I think it's about 18 million Bitcoin in CK Bitcoin currently. So there's already 18 million in there and Bitfinity isn't live yet._”
- Bitfinity wants to leverage this technology to bridge assets from Bitcoin, Ethereum, Solana, etc., and use Bitcoin liquidity for DeFi:

“_”e're able to use the ICP technology to bridge the assets from Bitcoin, and Ethereum. I saw today that they've actually introduced CK Link now. So Chainlink will be another one that will be possible. And Solana is possible based on the ICP stack_”

## 4. Bitfinity Network Token and Ecosystem

- A Bitfinity token is in planning, with anticipated roles in governance, security, and transaction costs:


“_So we will have a token. We don't have one just yet. And yeah, I don't have a definitive answer on its role because I don't know the absolute plan. But you know, we look at security, governance, and costing of transactions._”
- The ecosystem could potentially include features like staking or re-staking in the future:

“_There are multiple ways we will use it. I just don't know exactly. Staking, maybe restaking it. I'm not sure exactly what the plan is._”
## 5. Defi Strategy and Solidity Developers

- Actively reaching out to EVM-based projects because of ease of integration and expanding partnerships:


“_So I'm currently reaching out and engaging with EVM-based projects. I just simply because it's so easy to integrate them. And there's so many of them as well_”
- Focusing on both new and established projects:

“_So any Solidity developers, anyone building apps on Ethereum, but mainly using Solidity, then yeah, I'd love to speak with them. Also, as part of that, we want to find newer projects because more established projects may already be operating in other networks, and that's cool. We are speaking to those as well. But yeah, working with builders and innovating from the actual start of the project could have more advantages as well._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_8f89ed93c9.png)
_Opportunities to get started on Bitfinity ([Source](https://bitfinity.network/))_

- Looking at both traditional DeFi and Bitcoin-based projects that want to harness the EVM's capabilities:

“_What I've noticed in my work and my outreach is that there are quite a lot of Bitcoin-based projects as well that have launched in the last 12 months. So there's also a massive opportunity there where they're emerging and there's a lot of interest. So it's quite a good time to partner with them also. So I'm looking at both sides really._”

## 6. Upcoming Bitfinity Network Developments

- Launching initiatives to incentivize active community engagement:


“_So, keep an eye out on the socials as we will be launching something pretty cool very shortly, which is going to basically allow anyone who's within our community, or who wants to be, to engage with us and get incentivized. So, you know, share tweets, write good content. We want to reward an active community_”
- The bridging feature's release will foster early ecosystem growth with incentives for builders and liquidity provision:

“_And we want to attract liquidity builders and basically incentivize early growth through our reward system that I just talked about. So, incentivize people to refer people or bridge assets and yeah, just basically foster that innovation very early on_”
- Mainnet expected to go live in about 2 months, with token launch and possibly a hackathon following:

“_From there, the Main Network looks to go live, token and everything and probably a hackathon that I'll run after that. (...)  I'd say about two months before that is all approved._"
## 7. Project Partners

- Sam mentioned two dApps, [Sonic](https://t.co/BeY37yhW6c) and [Lenfinity](https://www.lendfinity.xyz/), in the testnet phase within Bitfinity. Sonic is like a DEX with potential DeFi applications, while Lendfinity could be a lending platform:


“_You can see there are two projects one Sonic and one Lendfinity that i've recently retweeted uh so they're dApps built on Bitfinity (...) They're kind of like 80%, 95% done._”




## 8. Engagement and Growth Strategy
- Intend to broaden the ecosystem and incentivize early adopters:

“_So this is, you know, early, early stages, but we want to make sure that our early partners are happy and then from there we can obviously scale up and attract more and more partnerships._”
- Aiming to merge Bitcoin liquidity with the EVM functionality, offering advantages to both traditional DeFi and Bitcoin-based projects:

“_Then that's a big advantage to them in terms of building out their project, these Bitcoin-based projects. So, yeah, it's quite interesting how from each side there's kind of a need. The Ethereum DeFi side that want the liquidity of Bitcoin. And then the Bitcoin side, they want the functionality of the EVM._”
## 9. Sam’s Final Thoughts

- Advises keeping an eye on Bitfinity's socials for important announcements:


“_Keep an eye out on the socials as we will be launching something pretty cool very shortly, which is going to basically allow anyone who's within our community_”




Bitfinity is developing an EVM-compatible sidechain to integrate Bitcoin into Defi. Filled with exciting updates and developments, deep dive into our recent AMA Highlights!

Exploring Bitcoin L2s w/ Bitfinity

[Tuna Chain](https://tunachain.io/) leverages a hybrid system that combines roll-ups and modular technology to improve transaction efficiency and scalability. Native Bitcoin assets on Tuna Chain are secured using Taproot upgrades, ensuring reliable Layer 2 solutions.

Tuna Chain uses $TUNA; $TORO, and $WOOG tokens for governance, stablecoin uses, and more. With the mainnet launch approaching, Tuna Chain hopes to increase developer participation and dApp integration by giving staking incentives with an initial APR of ~30%. For further information and updates, explore the AMA highlights below: 

**X Spaces**: [Exploring Bitcoin L2 with Tuna Chain](https://x.com/stakingcircle/status/1801253120359493854)

**Youtube**: [Exploring Bitcoin L2 with Tuna Chain](https://www.youtube.com/watch?v=wxPRAg1JfuM)

**Spotify**: [Exploring Bitcoin L2 with Tuna Chain](https://open.spotify.com/episode/5YtwbyBoedWoxDWFlx2LOW)

**Speakers**: 
- Cava @ Tuna Chain ([X Profile](https://x.com/TunaChain))

**Index**:
1. Modular Blockchains
2. Tuna Chain’s Approach
3. Secure Native Assets on Bitcoin for Tuna Chain
4. Tuna Chain Tokens: $TUNA, $TORO, and $WOOG
5. Staking and Yields on Tuna Chain
6. Tuna Chain’s Upcoming Developments
7. Future Events and Involvement

## 1. Modular Blockchains

- Cava explained modular blockchains, breaking down their structure into layers: consensus, data availability, execution, and settlement:

“_Modular blockchains are designed to separate different functions of a blockchain into distinct interchangeable modules. For example, if we do a transaction, we will separate different aspects or different parts of this transaction. So basically, we divide it into the consensus layer, the data availability layer, and the execution layer, and the settlement layer._”

- Benefits of modularity include better scalability, flexibility, security, and working together for users and developers. It allows for smoother transactions and building ecosystems at a lower cost:

“_The most beneficial parts or benefits of modular philosophy is we increase the scalability and flexibility and security and interoperability (...) So users can do the transactions more seamlessly and efficiently. And also for our layer 2 or our technology side or our project side, we can build up the whole ecosystem with less cost._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_a2aaef9ab0.png)
([Source](https://tunachain.io/))

## 2. Tuna Chain’s Approach

- Tuna Chain uses a hybrid system that includes roll-ups and decay, along with modular technology:

“_We use the roll-up and decay as a hybrid approach. But on the other hand, we also use the modular approach. Both of this approach benefit to our ecosystem and our technology side as well._”

- Their strategy merges the security of DK roll-ups with the scalability and ease of optimistic roll-ups:

“_So the zk Rollup model bundles multiple transactions into one single batch and generates a cryptographic proof. So I think the advantage is the security and the incident and the familiarity (...) But in terms of the OP, optimistic roll-ups, the OP can handle multiple transactions into a single batch, but assume that transactions are valid by default (...) So we hybrid this approach to abstract the advantage, but to escape their disadvantage to some extent._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_5fb3af175a.png)
([Source](https://tunachain.io/))

## 3. Secure Native Assets on Bitcoin for Tuna Chain

- They protect Bitcoin native assets on Tuna Chain by using Taproot upgrades:

“_So we leverage enhancements bought by Taproot, Tuna Chain can implement a robust security framework for native Bitcoin assets_”

- They use a mix of Schnorr signatures, MAST (Merkelised Abstract Syntax Trees), and Tapscript for a solid, scalable L2 solution:

“_So it's a combination of Schnorr signature, the MAST , and the Tapscript also provide the fundamental tools needed to build a secure and efficient and scalable Layer 2 solution._”

- They use a multi-signature method with plans for outside validators to keep secure and reliable operations:

“_Tuna Chain’s initial multi-signature approach, along with plans for introducing external validators, ensure that that work remains secure and resilient as it evolves._”

## 4. Tuna Chain Tokens: $TUNA, $TORO, and $WOOG

- $TUNA: Native token for governance, work rewards, staking, and network fees:

“_So the most important one would be the $TUNA. This is the TunaChain's native token. Basically, $TUNA is the governance token, it's used for voting rights, jobs, on-chain incentives, staking and security, like network purchases and the transaction fees as well. So the main purpose of it is governance._”

- $TORO: Tuna Chain's native stablecoin, lets BTC holders earn high APY without selling their BTC:

“_So $TORO is one of the most essential ones as well. This is the native stablecoin in our layer 2. It's central to Tuna Chain and is an exceptional Stablecoin, firmly tuned to many users requirement. $TORO users can secure a stable digital asset by over-collateralizing them with BTC holdings. And BTC Holdings now have the opportunity to earn significant yields on $TORO and join the high APY without needing to liquidate their valuable BTC asset as well._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_37f3adf902.png)
([Source](https://tunachain.io/))

- $WOOG: Utility token with a limited amount of 1000. 200 $WOOG distributed during the Bybit BRC20 event, with 800 kept for future release by outside factors:

“_So the $WOOG is a utility token that plays a wide role in the Tuna Chain ecosystem as well. So it serves as an exclusive gateway to experience, to first-hand the diverse ecosystem of the Tuna Chain. (...)  The total supply of work was, I think it's 1000 with 200 word tokens slated for distribution during the Bybit BRC20 inscription launchpad event and the rest of them would be 800 are currently sealed and will only be unlocked upon activation by external forces in near future._”

## 5. Staking and Yields on Tuna Chain

- Tuna Chain will have staking connected to TunaDAO, aiming to support and improve the platform's environment:

“_So the information will be announced in the near future and maybe along with launch of our mainnet. So users can definitely stake their tokens to participate in network conferences and earn rewards as well. So TunaDAO is designed to empower the ecosystem by involving community members in governance and rewarding._”

- Staking rewards are expected to start at an APR of 30% during the mainnet launch period, but details will be announced later:

“_In our official website, you can see the initial stake and reward will offer the APR for 30%. So this is just a rough number. So anything like details will come up later._”

## 6. Tuna Chain’s Upcoming Developments

- The goal to start the mainnet soon, opening up for more developer and DApp integration in Tuna Chain’s environment:

“_The first one is we're pushing for what the Tuna Chain Mainnet hoping to launch it in the near future as I mentioned before. This is crucial for development of Tunas ecosystem and the team subsequent plans because after we launching our mainnet, we can involve more developers in or dApps to build on our layer 2._”

- A bridge from Bitcoin is being made to make transfers to Tuna Chain easier:

“_The second one is native bridge. from Bitcoin to Tuna Mainnet. This is the kind of like breakthrough as well. Because I think the bridge is very, very like vital thing for layer two or for any platform_”

- Plans include adopting a modular DA (Data Availability) layer to better cost efficiency, possibly working with Celestia:

“_And the third one with the modular DA layer. As we just talked, modular is the best way to reduce the cost and to increase the efficiency. So we want to integrate in the near future with the Celestia Power, the modularity for reducing the cost and interest._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_b3e2da3345.png)
([Source](https://tunachain.io/))

## 7. Future Events and Involvements

- Tuna Chain will have people at Ethereum CC on July 8th and were invited to BTC Summit side event by Staking Circle:

“_My colleague would go there, definitely. So we can just meet there and to discuss more about how can we flourish our ecosystem._”

_Staking Circle_ - “_For sure. So here's our formal invitation. We will have a BTC Summit side event during the ATCC. It will be on July 8th. The venue will be at the Puterie 20th in Brussels. So I invite you to come there and hang out._”

- Updates and ways to get involved will be shared through Tuna Chain’s official site, their Twitter, and Discord:

“_And we will do the collaboration announcements and then we will try to integrate them. So probably a lot of like marketing campaigns or promotion we will do in the near future and I think everyone, if you're interested in, you can stay into to our website official website, or especially our Twitter._”



Tuna Chain leverages a hybrid system that combines roll-ups and modular technology to improve transaction efficiency and scalability. For further information and updates, explore the recent AMAs highlights 

Exploring Bitcoin L2 w/ Tuna Chain

[ZKM](https://www.zkm.io/) is creating a Zero-Knowledge Virtual Machine (zkVM) to improve Optimistic roll-ups and enable secure cross-chain transactions without traditional bridges. In our recent AMA, Ming emphasized the promise of zero-knowledge proofs for Bitcoin Layer 2, despite limitations in Bitcoin's smart contract capabilities.

ZKM's zkVM generates secure proofs of off-chain computations, assuring native asset security across blockchains. ZKM aims to develop zero-knowledge technologies through interoperability and community engagement. Explore the highlights below for a detailed look at ZKM's innovative approach and future prospects.

**X Spaces**: [Exploring Bitcoin L2 with ZKM](https://x.com/stakingcircle/status/1798731974162391197)

**Speakers**: 
- Ming Guo [Profile X](https://x.com/DacEconomy): Chief Scientist & Co-Founder @ ZKM ([X Profile](https://x.com/ProjectZKM))

**Index**:
1. ZKM Background and Purpose
2. ZKM’s Technical Approach
3. ZKM’s Impact on Interoperability
4. Challenges in ZKM’s Development
5. ZKM’s Vision on Zero Knowledge Proofs
6. Contact and Further Information
7. Audience Question: ZK End Game for Bitcoin
8. ZKM Bitcoin Layer 2 Contributions

## 1. ZKM Background and Purpose
- Ming Guo, chief scientist and co-founder of Project ZKM, talked about the company and where it came from:

“_Our origin is actually created straightforward. So we're the people from Metis. So Metis, M-E-T-I-S. is an optimistic roll-up project in the Ethereum. ecosystem. So what we do is we developed a network for optimistic roll-up, which is a scaling solution in Ethereum_”

- Starting from Metis, an optimistic roll-up project in the Ethereum ecosystem, ZKM aimed to solve the 7-day waiting period typical of Optimistic roll-ups, by introducing a ZK roll-up solution:

“_And Optimist roll-up has this problem of you have to wait seven days for a challenge to secure the asset transfer in the network. (...) And Optimist roll-up has this problem of you have to wait seven days for a challenge to secure the asset transfer in the network._”

- ZKM began as a test solution for adding this feature to Optimistic Roll-up at Metis but became an independent project to look into a wider use of the solution:

“_So ZCamp started as a trial solution for adding this feature to the Optics and Rollup at Metis. But then we see more application with this solution. and it's spent off as an independent project. So that's the origin of ZKM_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_857eabf2ee.png)
_([Source](https://www.zkm.io/))_

## 2. ZKM’s Technical Approach

- ZKM is creating a Zero-Knowledge Virtual Machine (zkVM) that can create secure proofs of off-chain computations for different blockchains:

“_So the idea is to scale it by offload many things to the layer two. So layer two has to kind of execute a smart contract off chain. Then there's a problem. (...) So this is, you have to execute smart contract off chain. So you run a different EVM and this is not the same. And then you need to secure it._”
- zkVM is not an EVM but can confirm EVM-supported smart contract actions are right without being an EVM itself:

“_zkVM is a different virtual machine. It doesn't really just execute a 3M smart contract like Solidity or, you know, like it's not an EVM, but it can actually move an EVM supported smart contract, execute it correctly, so you do that through, but it's not an EVM._”

## 3. ZKM’s Impact on Interoperability

- ZKM aims to offer secure cross-chain solutions through their entangled roll-up tech, which can bridge assets between blockchains without relying on traditional bridges:

“_And as you just said, all these roll-up chains, they're sort of entangled. (...) So two chains are just magically entangled by the entangled roll-up network. And so you can, with this entanglement of information across chain, you can do many things. You can do state transfer, you can do transactions, you can, you know, the application is limitless._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_474230ca07.png)
_([Source](https://www.zkm.io/))_

- Moved assets through ZKM's entangled roll-up to keep native security, showing the security features of all base chains, and not depend on less secure bridged assets:

“_And the most striking feature of this is, you know, the ability to do things. technology is that the assets are native assets. They are, they are as secure. as the foundation layer one chain that underneath it._”
- The entangled roll-up way is both new and workable for cross-chain communication, supporting native assets with security equal to the base blockchains:

“_Basically, bridge assets are so insecure, the suggestion is that you don't use it. But in Entangled Rollup, it is a cross-chain asset network that supports native assets, which has never done before, and as secure as the foundation chain._”
## 4. Challenges in ZKM’s Development

- Creating zkVM has been hard as it involves creating secure proofs for smart contract actions that need to be checked on main chains including Ethereum and Bitcoin, because of the smart contract capacity limits of Bitcoin:

“_So this is a challenge. It's very difficult to build one. So we just released our ZK-VM back in February. Just this week, we're actually releasing another version of our zkVM.  Another challenge, of course, is on the Bitcoin side. So Bitcoin, since Bitcoin smart contract engine is very limited_”

- Getting ZKM's tech to work on Bitcoin is difficult because Bitcoin’s smart contract engine is not fully featured – it doesn’t do actions like multiplying or looping:

“_It doesn't do like multiplication. It doesn't do loop. So it's not even truly complete. It was very difficult to develop a. and verify engine on Bitcoin network. So this is the challenge facing these solutions._”

## 5. ZKM’s Vision on Zero Knowledge Proof

- Ming believes ZK proofs are a possible final play for making blockchain tech bigger even on layer two solutions for Bitcoin, though the implementation might be slow because of the cautious nature of Bitcoin core developers:

“_The end goal is that you can carry out any computation, which is obviously like everyone wants, right? Like, you know, we can do this in two ways. One is ask the core developers of Bitcoin to implement this, right? This is obviously very difficult, right? Because Bitcoin core developers are very conservative for a reason_”

## 6. Contact and Further Information

- Ming can be contacted via Project ZKM's main Twitter account or at his personal handle, @DAC_Economy:


“_So you can see that I'm from Project ZKM. So this is the main Twitter account of our project. I'm also known as DAC Economy. That is my personal ex-Twitter handle, DAC Economy. So DAC stands for Decentralized Autonomous Community_”

## 7. Audience Questions: ZK End Game for Bitcoin

- Ming suggested that zero-knowledge proofs could be the best scaling solution for Bitcoin, but putting it into use may involve new operation codes or using current operations in creative ways:

“_And in order to implement this Holy Grail, like a full, overall like redesign of the Bitcoin smart contract engine is desired, but unlikely, or it may take a long time. So many of the developers that wants that actually just beg for one, add one opcode, you know, and I mean, yeah, it is that you have probably heard the petition to add one more opcode, like it's called OP underscore CAT, OP cat. So with this, they could have a big jump of capability_”

- Developers interested in Bitcoin scalability want to build zero-knowledge-proof-based layer two solutions or find new ways to use existing smart contract features on Bitcoin:

“_Another alternative way is that we do this with the, with available to us, but using the the zero knowledge proof scheme that we generate the proof, but we simple, we do it in a more maybe simple by the way to have it verified on Bitcoin using the existing a smart contract engine. It's much harder. But it's believed to be doable because developers, they're desperate, but they're smart._”
## 8. ZKM Bitcoin Layer 2 Contributions

- Ming explained that ZKM is heading into Bitcoin Layer 2 with a universal settlement network, emphasizing that their unified native assets are as secure as the base blockchain:

“_So I would just like to say that ZKM is venturing into Bitcoin there too. And we're providing what is called a universal settlement network. And we support unified native assets. So remember, the native assets is much more secure, as secure as the foundational blockchain. So this is, well, I don't want to just shamelessly promote ourselves, but it's quite revolutionary, as we think. So I am really excited to share. more of the space with the Bitcoin community, which actually I came from. My first blockchain project is in the broader Bitcoin space._”


![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_14503093f1.png)
_([Source](https://www.zkm.io/))_


ZKM's zkVM generates secure proofs of off-chain computations, assuring native asset security across blockchains. ZKM aims to develop zero-knowledge technologies through interoperability and community engagement. Explore the highlights below for a detailed look at ZKM's innovative approach and future prospects.

Exploring Bitcoin L2 w/ ZKM

[pStake Finance](https://pstake.finance/) introduced their multi-chain liquid staking protocol, which is meant to manage several Layer 2s while providing a smooth user experience, including the simplicity of one-click staking.

Emphasis was given to long-term development and strategy, with pStake aiming to launch their Bitcoin Staking solution with Babylon. pStake Finance also intends to create a native governance token to reward early depositors during the open beta phase. Don't miss out on the details—dive deeper into the AMA highlights to learn more about this exciting developments.

**X Spaces**: [Exploring Bitcoin Staking with pStake](https://x.com/stakingcircle/status/1797961601108365375)

**Speakers**: 
- Mikhil Pandey ([X Profile](https://x.com/PandeyMikhil)): Co-Founder @ pStake Finance ([X Profile](https://x.com/pStakeFinance))

**Index**:
1. pStake & Bitcoin Staking
2. Bitcoin Staking Explanation
3. Mechanisms for BItcoin Staking
4. Security and Risks and Bitcoin Staking
5. pStake Token and Governance
6. Security and Staking Environment
7. Roadmap for BItcoin Staking
8. Vision and Dedication for Long-term Growth

## 1. pStake & Bitcoin Staking
- Mikhil described his journey in crypto, joining in 2019 and eventually falling in love with Bitcoin:

“_I'm  just  a  normal  human  being  who's  passionate  about  DeFi,  Bitcoin,  staking,  yields,  and  passionate  about  the  space.  So  I  started  out  in  2019  in  the  space  officially  and  co-founded  P-Stake_”
- He explained his initial focus on yields and staking within the Cosmos ecosystem:

“_I'm  just  a  normal  human  being  who's  passionate  about  DeFi,  Bitcoin,  staking,  yields,  and  passionate  about  the  space.  So  I  started  out  in  2019  in  the  space  officially  and  co-founded  P-Stake_”

## 2. Bitcoin Staking Explanation

- Mikhil talked about traditional views on Bitcoin and how Layer 2 solutions are enabling Bitcoin to become an active asset:

“_For  the  longest  time  nobody  thought  you  could  build  anything  on  bitcoin  ogs  were  so  skeptical  of  anybody  who  wanted  to  build  on  bitcoin  i  think  there  were  like  a  handful  of  teams  trying  to  build  anything  meaningful  on  bitcoin_”
- Explained that Bitcoin staking uses Bitcoin's economic value to secure other smaller chains:

“_The economic value of the Bitcoin to secure smaller chains that need economic security. So economic security is this concept that to attack a network_”

- Bitcoin staking yields are paid in the form of the native tokens from the chain that's being secured, not in additional Bitcoin:

“_These yield comes from different chains providing you know some basically if you do a service for me I'm gonna pay you for it. It's the same concept where if you bring your BTC to stake and secure my chain I'm gonna have I'm going to have to pay you for it. I pay you in different forms, whether it's a revenue share or a portion of my inflation_”

## 3. Mechanisms for BItcoin Staking

- Mikhil noted that when Bitcoin is staked, it is essentially locked up, creating issues similar to staking with Proof of Stake assets:

“_What they do is you use your Bitcoin, you put it into Babylon and Babylon is going to… you know, use those the dollar value of the Bitcoin to secure other chains, you earn some yields. But when you stake a Bitcoin, you have the same problem that you have with native staking of POS assets._”

- Introduced pStake's liquid token as a solution to address the issue of locked BTC during staking:

“_The problems that exist with staking kind of start appearing with btc staking as well although it's great that now you finally have yields on bitcoin but it's not the best because it's going to end up being locked up that's where we come in we do btc liquid staking_”

- pStake accepts BTC deposits, stakes them, consolidates the yields, converts them into BTC, and gives them back to users, and issues a liquid token against the staked BTC:

“_Only difference is pStake is the one that is accepting BTC deposits and then depositing it into Babylon on behalf of the users. Whatever yields come, we convert them into BTC again and we send that back to the users who are depositing Bitcoin. So in a way, We do the depositing part, we do the consolidation of yields and return those yields to the users._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_07cf22b8e8.png)
_([Source](https://pstake.finance/))_

## 4. Security and Risks and Bitcoin Staking

- Mikhil highlighted security as a main concern due to the lack of advanced smart contract logic on the Bitcoin blockchain:

“_The Bitcoin network itself is not so advanced today that you could have interesting smart contract logics or anything like that. In today's context, the way most BTC sidechains work, for example, is you have to bridge your assets to these sidechains to do that. _”

- He described the use of MPC wallets for securing BTC and the upcoming plans for insurance and coverage of the BTC in these wallets:

“_Pstake uses MPC, where we have three different signers who are going to sign transactions on behalf of the users to deposit the BTC into Babylon and issue the YBTC token. What is interesting though is we're going to go down the path of using insurance and coverage for all of these assets, so whatever asset. get put into the MPC wallet will be insured by certain third parties._”

## 5.  pStake Token and Governance
- Mikhil explained  pStake is a governance token for a protocol where  pStake token holders decide all parameters:

“_So $PStake is the governance token for the protocol where all the parameters around the protocol are decided by P-Stake token holders_”

- Decisions include how many incentives to give for starting traction on projects and products:

“_How many incentives are spent to bootstrap traction on certain projects, products are decided by P-Stake token holders. It's essentially the token holders that determine what happens within the protocol and how it grows._”

- Mikhil mentioned stakeholders are working on bringing more utility to the  pStake token:

“_Obviously, there are other elements of the P-Stake token that a few… stakeholders are working on, which I'm sure will come to light very soon._”

## 6. Security and Staking Environment

- Mikhil noted that tokens don’t provide security, especially with a low market cap:

“_I don't think any token can actually end up providing security as such unless the token is a high market cap token which then has high economic security_”

- Security issues with smaller chains and projects that rely on multi-sig based bridges were pointed out:

“_First of all, you don't have to rely on security assumptions from smaller chains, smaller projects, which have, you know, multi-sig based bridges, because if we shoot on a BTC L2 or a side chain, you're going to have to rely on._”

- Mikhil talked about issuing ELBTC tokens on Ethereum L1 for liquidity and security reasons instead of smaller chains or BTC L2:

“_So people argue that, okay, it's easier to attack the network. So, please take the dApp will exist across the Bitcoin network and Ethereum, where the ELBTC token will be issued. So we are instead of issuing it on a BTC sidechain or a BTC L2 which is what most people are trying to do today_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_87954be9d5.png)
_([Source](https://pstake.finance/))_

## 7. Roadmap for Bitcoin Staking

- Mikhil shared plans to build using Bitcoin for the long term and wanted to maximize users' ability to earn from systems like Babylon's points:

“_What I want to do is go after real people who care about Bitcoin and generating yields on their Bitcoin. and make it sustainable over the long term. So one is using Babylon to stake. That's the first big part of our roadmap._”

-  pStake’s short-term roadmap includes focusing on the Babylon release and ensuring pStake contributors can partake in any potential point systems and cap fills by  pStake deposits:

“_One is like, really making sure so Babylon goes live, based on my knowledge and maybe speculation. They will not have any consumer chains or any AVSs that will be live at launch, which means they will be accepting deposits. Assuming they accept deposits with a cap, let's say they have a 50 mil, 100 mil cap of deposits in BTC, and assuming they have some point system like EigenLayer did_”

- Long-term goals involve finding decentralized ways to generate yield on Bitcoin safely and preparing for potential Bitcoin network changes like OP-CADs:

“_We want to see how we can go beyond that and generate yield on people's Bitcoin in a secure manner, as safe as possible, getting multiple audits, getting audits of the infrastructure, and then working towards a longer term roadmap where you actually see Bitcoin network evolve. So you know, if Bitcoin network tomorrow is OP-CAD, how would you want to be positioned for that even before that happens?_”

## 8. Vision and Dedication for Long-term Growth

- Mikhil expressed a constant commitment to building for the long term, focusing on both bull and bear markets without distraction from token volatility:

“_Four years ago to build and so has most of the team right so for us it's about like you know not caring whether it's a bull bear but just continue building the token is up down none of that all of that is a distraction obviously you want to be in a position where you can build for for multiple years multiple cycles that's why the treasury is important which we do have_”

- They look forward to a relentless effort over the coming decades, with the team's youthful energy and dedication:

“_ It’s just about like building for an asset that you are excited about personally very excited about and you know you can see yourself building for a long time and then just go after it relentlessly over those decades_”




pStake introduced their multi-chain liquid staking protocol and plans to launch their Liquid Staking Bitcoin solution with Babylon. Dive deeper into the AMA highlights to learn more about these exciting developments.

Exploring Bitcoin Staking w/ pStake

[EigenLayer](https://www.eigenlayer.xyz/) has officially released its protocol token, $EIGEN, and the airdrop claim is now live, with benefits for early backers and stakeholders. This guide will give you all of the relevant information on the $EIGEN token and the airdrop process.
# Understanding EigenLayer
EigenLayer is an Ethereum middleware protocol that aims to improve the network's security and scalability. It accomplishes this by allowing stakers to reallocate their staked ETH to smart contracts, which subsequently act as validator consensus for various dApps and protocols. This dual-layer staking mechanism enables users to earn rewards from multiple sources at once.

This unique strategy considerably increases yield prospects for stakers while also contributing to a more robust and secure Ethereum network. EigenLayer improves the utility of staked ETH while simultaneously strengthening the general stability and security of the Ethereum ecosystem.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_fdc80d0dbf.png)

# The $EIGEN Airdrop
The $EIGEN token airdrop is a key component of EigenLayer's approach for decentralizing governance and incentivizing its community. This currency serves as both a utility and governance token in the EigenLayer ecosystem, giving holders voting rights on critical decisions as well as the opportunity for staking rewards, encouraging active community participation in the protocol's growth.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_a671695a4c.png)
_EIGEN’s Integration on Eigenlayer’s Architecture([Source](https://www.blog.eigenlayer.xyz/eigen/))_

# All About $EIGEN
The $EIGEN token, also known as a 'Universal Intersubjective Work token' must be staked to carry out various network activities. These include imposing penalties, also known as "slashing', on nodes that engage in noncompliant conduct. While Ethereum's staking mechanism can penalize users in order to preserve the network, $EIGEN expands this feature to handle 'intersubjective' defects, which are actions that are not directly observable on the blockchain. This includes circumstances in which blockchain monitoring is insufficient and requires community or committee control.
In this architecture, $EIGEN functions similarly to a governance mechanism, with token holders voting on measures to sanction wrongdoing. This system not only imposes penalties, but it also incorporates mechanisms to compensate users who have been affected by the mistakes of others, ensuring balanced network governance and security.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_611adaca82.png)
_Categorization of Faults ([Source](https://www.blog.eigenlayer.xyz/eigen/))_

### Core Features of $EIGEN:
- **Adaptability**: $EIGEN may be used for a wide range of digital tasks, making it a valuable asset in the ecosystem.
- **Fairness**: It controls the costs of reaching a social consensus on intersubjective faults, assuring equitable outcomes, and preventing misuse.
- **Compensation**: Unlike traditional systems that focus primarily on fines, $EIGEN compensates users who are affected by the errors of others.
These features represent a substantial development in digital platform architecture, extending blockchain technology's applicability to more complex human interactions and subjective assessments.
# How to Claim Your $EIGEN Tokens
### 1. Check Eligibility
Confirm your eligibility for the airdrop. Criteria include early involvement or contributions to the EigenLayer network. Eligible participants can check their token allocation at:
-> [claims.eigenfoundation.org](claims.eigenfoundation.org)
### 2. Connect Your Wallet
Go to the EigenLayer airdrop page and connect your Ethereum wallet. This phase confirms your eligibility based on past protocol interactions.

### 3. Claim Your Tokens
Once authenticated, you can claim your $EIGEN tokens by following the on-screen instructions.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_af40f2faa0.png)

## Important Details for Claiming $EIGEN Tokens
**Claim Period**: May 10, 2024, to September 7, 2024.

**Eligibility**:
- LRT users before March 15, 2024, excluding those entering Phase 2 in mid-June.
- Directly restaked ETH or LSTs on EigenLayer between March 15 and April 29, 2024, with a 100 bonus token allocation now and extra incentives in Season 2.
- Directly restaked ETH or LSTs on EigenLayer before March 15, 2024, with a bonus token allocation of 100.


# Staking Your $EIGEN Tokens
### - Reasons to Stake
Staking $EIGEN helps secure EigenDA, a high-performance Data Availability solution that supports Ethereum rollups. Future staking options will include a broader range of Actively Validated Services (AVSs).
### - Flexibility in Staking
You can stake your tokens and select an operator at any time, providing greater control over your assets.
### -  Unstaking $EIGEN
Unstaking $EIGEN requires a 24-day waiting period to maintain ecosystem security. For more details, refer to the whitepaper or summary on the EigenLayer website:
-> [https://docs.eigenlayer.xyz/eigenlayer/overview/whitepaper](https://docs.eigenlayer.xyz/eigenlayer/overview/whitepaper)
# Key Considerations
Initial $EIGEN tokens are non-transferable and intended for governance. They will become transferable after a specific period outlined in the project’s roadmap.
The claim period is limited; ensure you claim your tokens within the specified window and use the official EigenLayer site to avoid phishing scams.
This is just the Season 1 airdrop. EigenLayer plans to distribute a total of 15% of the $EIGEN supply in future seasons, based on ecosystem participation before and after the March 15 snapshot.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_b4dbc404d3.png)
_([Source](https://blog.eigenfoundation.org/claims-s1-p1/))_

# A Major Airdrop in 2024
While opinions on token airdrops can vary, the $EIGEN airdrop is a significant event for EigenLayer's community engagement. As the platform evolves, $EIGEN tokens will likely play an increasingly important role in ecosystem governance, enabling more comprehensive user participation.



EigenLayer has officially released its protocol token: $EIGEN. This guide will give you all of the information you need on the $EIGEN token and airdrop process.

$EIGEN Drop: A Complete Guide

[Zero-G](https://zerog.finance/) has announced its multi-chain liquid restaking protocol, which aims to handle various Layer 2s while providing a user-friendly experience with features such as one-click restaking.

This summer, Nick announced the development of a native governance token and a token airdrop, rewarding early depositors during the open beta phase. The emphasis is on community-centric token distribution and strategic collaborations to grow TVL and ensure strong integrations.

For more information and updates, follow Zero-G's progress on Discord and Twitter, and check out the highlights below:

**X Spaces**: [LRT Protocols Deep Dive with ZeroGFinance](https://x.com/stakingcircle/status/1796179623606149531)

**YouTube**: [LRT Protocols Deep Dive with ZeroGFinance](https://www.youtube.com/watch?v=q74_u8pZqSs)

**Spotify**: [LRT Protocols Deep Dive with ZeroGFinance](https://open.spotify.com/episode/7kFbfXKBcohEEH8AnL2XK2)

**Speakers**: 
- Nick: Lead @ Zero-G Finance ([X Profile](https://x.com/zerogfinance))

**Index**:
1. Zero-G Finance Overview
2. Zero-G Finance Inspiration
3. Team Background
4. Zero-G Unique Technology
5. Zero-G Competitive Edge
6. Future Token and Airdrop
7. Distribution Model
8. Partnerships and Integrations
9. Community Engagement and Updates
10. Developer and User Support
11. Short-term Goals
12. Risk Management Strategy
14. Open Beta and Tokenomics Release

## 1. Zero-G Finance Overview

- Nick described Zero-G as a multi-chain LRT protocol with functions similar to protocols like Renzo, Kelp, EtherFi, and Puffer:
> "_So Zero-G is a multi-chain LRT protocol. We function very similar to the protocols that exist like Renzo, Kelp, EtherFi, and Puffer. Essentially, we're using cross-chain transfer protocol technology with a bridge called Connext, similar to Renzo, to enable restaking across a variety of different L2s._”
- Current support includes Mainnet, Arbitrum, Mode, Base, with plans for Optimism, Linea, and Fraxtel, with Zero-G being the first to offer restaking on Fraxtel:
> "_So at the moment, we support restaking on Mainnet, Arbitrum. Optimism, Mode, Base, Linea is coming soon. Fraxtel is coming soon. We'll be the first to offer restaking on Fraxtel._”
- The platform aims to provide easy access to EigenLayer and simplify the restaking process for users, targeting a user-friendly experience for easy access and one-click restaking:
> "_ We're just trying to build a gateway for users to be able to access EigenLayer from any position, really. Whether that be a cost-reduced basis using an L2, restaking on mainnet with native restaking, or whatever it might be, we have a lot of variety. And again, we're really just trying to make something that's a product that is widely accessible to users._”
## 2. Zero-G Finance Inspiration
- Nick stated that Zero-G may have joined the liquid restaking space later than some, but the industry is still in early development stages:
> "_ In terms of discovery, especially for retail users, we're still fairly new and there are still a relatively low amount of protocols that are competing in the space. You have your big 10, I would say. I think there's in total maybe 10 to 15 protocols that are actually offering liquid restaking._”
- He talked about the importance of creating a user-friendly platform to teach retail users about EigenLayer and restaking:
> "_So essentially we just wanted to make a solution that would be easy. Easy to use, the UI is very simple, and our user experience is all centered around one-click restaking. And yeah, it mostly came from the fact that we wanted to basically build something that would be not only more accessible with having L2s available to restake from but easier to use, I would say is a good way to put it._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_bf4e08d661.png)
_([Source](https://zerog.finance/))_
## 3. Team Background
- Nick shared his experience with his previous project, Perfect Swap, a composable yield platform on Arbitrum transitioned from a VE33 DEX to yield, and his web 2.0 background leading a product development team at a large SaaS company:
> "_Yeah, so previously I launched a composable yield platform on Arbitrum called Perfect Swap. It originally started as a VE33 DEX, then we transitioned into yield. So that's been up since December of last year. And my personal background, I come from Web 2.0. I was leading a product development team at a very large SaaS company._”
- Nick's web 2.0 experience is seen as an advantage in creating intuitive products for web 2.0 users transitioning to DeFi:
> "_And then I've been in DeFi for about two years full time where I was able to leave my day job. And yeah, I'm pretty versed and pretty experienced, you know, with leading a development team._”
## 4. Zero-G Unique Technology

- Nick explained that the core of Zero-G’s tech includes the use of smart contracts that automate the transfer of assets from L2s and LRT tokens like FRX ETH on Fraxtel to EigenLayer via Connext:

> "_Essentially, the highlight of the protocol is that the process of us taking your assets from an L2 to mainnet and then depositing into Eigenlayer, that entire process is automated by smart contracts (...) FRX ETH on Fraxtel, and then we will essentially use Connext on the back end to bridge that over to mainnet, and then essentially have that deposited into Eigenlayer as an LST._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_c205512595.png)
_([Source](https://zerog.finance/))_
## 5. Zero-G’s Competitive Edge

- Nick mentioned that not all liquid restaking protocols are multi-chain, making Zero-G unique as it supports more L2s than most other protocols and is automatic, permissionless, and scalable:

> "_I think it's important to mention also not every protocol is multi chain. So you have, you know, the competition for multi chain LRT protocols is even smaller than the entire competition for just LRT protocols itself._”
- Zero-G stands out by offering more chains than other protocols, it was on Optimism a month ago in open beta and got to Base shortly after Renzo:


> "_Another differentiation is we offer a lot more chains than others do. Before Kelp just released Optimism and launched on Optimism, we were on Optimism about a month ago. (...) We also got to Base shortly after Renzo did. You know, I've been building this since January now,_”
## 6. Future Token and Airdrop

- A Zero-G governance token, different from the zgETH LRT token, will be introduced, allowing users to vote on how protocol deposits are used and on other strategic decisions:

> "_Essentially with that Zero-G token, you can use the utility to vote for delegating deposits to certain operators, to integrating new AVSs. whatever strategy that you want to see the protocol take on in terms of yield-bearing and whatever you essentially want us to use deposits for, you'll be able to use that token to vote for that and have some real governance._”
- The token airdrop is planned for the summer, timed with milestone TVL achievements:

> "_That would be probably sometime this summer. And that's more than likely going to be when we cross the significant TVL mark that we actually launched the token._”
- Participants who deposit during the open beta will get a 3 times point boost to redeem for the airdrop:
> "_It's a good opportunity and I think you know being an open data has kind of staggered the growth a bit but we'll probably be doing a big marketing push in the next few weeks here._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_2567ca1ce8.png)
_([Source](https://zerog.finance/))_

## 7. Distribution Model

- Nick said that token distribution will focus on the community over VC and internal allocations, aiming for more alignment with community interests than other protocols:
> "_I would say I can share as much as saying that the community will definitely come first within the distribution. We are not going to be greedy in terms of having a large allocation set to VCs and ourselves. That's definitely something that you won't expect._”

## 8.Partnerships and Integrations

- Largest operator collaborations include P2P and EverStake, with additional nodes possibly from Figment:

> "_So we're working with P2P, EverStake, we'll be integrating all nodes and probably Figment for operators. So at the moment, we have EverStake and P2P as confirmed partners._”
- DeFi collaborations like Zircuit will unfold as TVL increases, and Zero-G aims for DeFi integrations such as Pendle and Curve, contingent on reaching certain TVL thresholds:
> "_In terms of DEXs and some of the DeFi integrations, the issue is like, you know, you have Pendle and obviously want to get listed on Pendle, Zircuit, all there. But we have to reach a certain TVL point or TVL mark to be able to qualify for that._”
- They have talks with Velodrome and Aerodrome about whitelisting on base and optimism for zgETH token:
> "_We talked to the Velodrome and Aerodrome guys about whitelisting on base and optimism for the zgETH._”
## 9. Community Engagement and Updates

- The main channels for Zero-G updates are their Discord channel and Twitter, with their mirror page following:

> "_Yeah, so we currently have a, you know, solidly set up Discord community that I would encourage everybody to join. That's where most of the communication and updates kind of go through first. And then second to that would be Twitter. And third would maybe be our mirror page._”

## 10. Developer and User Support

- Zero-G’s full technical documentation is available, detailing the protocol's technical architecture for those interested in understanding the protocol's workings:

> "_Yeah, so we have our entire documentation that's already built out where you can kind of see the technical architecture and the technical mapping of everything. So if you're interested in that, definitely go ahead and take a look._”
## 11. Short-term Goals

- Nick announced they've completed the development of unstaking and withdrawing features, which is a unique offering as not many protocols have enabled this yet:

> "_We just now wrapped up our development of unstaking and withdrawing. So we basically finished up that feature. And right now we're waiting for it to go through audit to have it approved (...) So we will have unstake and a withdraw. probably within the next two weeks, I would say, at most._”
## 12. Risk Management Strategy:
- Nick explained that they work closely with operating partners P2P and EverStake for anti-slashing strategies and delegate the risk of slashing to them:
> "_ Yeah, so we essentially talked very, very, very closely with our operating partners with, you know, P2P and EverStake for anti-slashing and how anti-slashing will work._”
- The strategy includes avoiding operators with slashing risks and relying on those with proven track records in anti-slashing methods or strategies:
> "_We're not trying to work with any operators that we feel have a risk for slashing. You know, we like to kind of look at a proven track record and see what their measures are put in place for anti-slashing techniques or strategies._”
- They are working with Code4rena to audit all their protocols for increased security:
> "_We have as many audits as you really can have for a project that hasn't raised any money or hasn't launched yet fully. We're working closely with Code4rena to audit everything that we do._”
## 13. Open Beta and Tokenomics Release

- Zero-G is currently in an open beta phase, offering 3 times the farming points post-launch:

> "_Zero-G is currently in an open beta phase offering 3 times the farming points post-launch and plans to share tokenomics information within the next month._”
- Nick encouraged new users to participate in the beta to benefit from early involvement and mentioned that this could be a chance for those who have missed out on other protocols' launches or airdrops:
> "_Zero-G will offer a token airdrop in the summer for early depositors in the open beta with a 3x point boost for redemption. The airdrop token will have governance utility_”





Zero-G has announced its multi-chain liquid restaking protocol, which aims to handle various Layer 2s while providing a user-friendly experience. For more details, check out the highlights of our most recent AMA


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LRT Protocols Deep Dive w/ Zero-G Finance

[Botanix Labs](https://botanixlabs.xyz/en/home) is preparing to debut its decentralized Bitcoin Layer 2 solution, the SpiderChain, which combines Bitcoin security with Ethereum functionality. In a recent AMA, Willem underlined the importance of achieving high decentralization and low transaction costs with their novel bridge and token rewards system.

Botanix Labs has already attracted various projects, including a dynamic DeFi ecosystem featuring Bitcoin-backed stablecoins, decentralized exchanges, and more. As the mainnet launch date approaches, Willem asked Ethereum developers to build on Bitcoin through Botanix. To learn more about Botanix and remain up to date on their progress, check out the highlights of the AMA below and join their Discord and Telegram communities.

**X Spaces**: [Exploring Bitcoin L2s with Botanix Labs](https://x.com/stakingcircle/status/1794020771502715231)

**YouTube**: [Exploring Bitcoin L2s with Botanix Labs](https://www.youtube.com/watch?v=L9TaI7MFVII)

**Spotify**: [Exploring Bitcoin L2s with Botanix Labs](https://open.spotify.com/episode/2EIlpfOAXdjiWLMPZXUGiy)

**Speakers**: 
- Willem ([X Profile](https://x.com/WillemSchroe)): Founder of Botanix Labs ([X Profile](https://x.com/BotanixLabs))

**Index**:
1. Botanix labs Intro
2. Botanics’ Unique BItcoin Layer 2 Solution
3. Challenges in Decentralized Layer 2 Development
4. Ecosystem and Projects on Botanics
5. User Experience and Bridging to Botanics
6. Technical Aspects and Censorship Resistance
7. Fees and Transaction Costs
8. Botanics Development Roadmap
9. Mainnet Expectations
10. Developer Outreach


## 1. Botanix Labs Intro
- Willem's research in authenticated encryption aids in the design of Botanix' Bitcoin Layer 2 solution – the SpiderChain:
> "_Researched in cryptography, in authenticated encryption, actually part of the design of what's called the SpiderChain, which is how we actually built a Bitcoin layer 2, comes from my cryptography background_”
- After observing hyperinflation and bank account confiscations, Willem aimed to connect Bitcoin with the Ethereum Virtual Machine (EVM):
> "_And I think around like two years ago, came up with the idea for Botanix. And that vision is still exactly, absolutely the same. I strongly believe Bitcoin is the winning money. It's pure, it's decentralized, it's extremely secure. It can be global money. And I think the EVM might be the winning virtual machine._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_df1a8fa3f0.png)
_([Source](botanixlabs.xyz))_

## 2. Botanix's Unique Bitcoin Layer 2 Solution
- Botanix has been working on a decentralized Bitcoin Layer 2 solution, which started two years ago before Ordinals and other Layer 2 solutions became known:
> "_Bitcoin. We started like two years ago before Ordinals was a thing before anyone else was building Layer 2s. And I think what differentiates us is we spent probably the first six months on the cryptography._”
- The SpiderChain is a unique solution, fully operational on Bitcoin today, and addresses centralization problems that other roll-ups encounter, including censorship resistance and data availability issues, aiming for full permissionless status when the complete protocol is in place:
> "_Bitcoin isn't suited for data availability, it's not really suited for roll-ups, and so we found a way to actually build a decentralized layer too. So the SpiderChain is quite unique in its design, it's fully capable on Bitcoin today, and it's actually decentralized, so we don't have any of the censorship resistance issues,_”
- The Layer 2 solution was tried on a testnet since November and is planning to move to the mainnet soon:
> "_So quite a unique layer 2 design that solves a lot of the issues of your classical roll-ups. And then we started building that, being on testnet in November and soon going to mainnet._”
## 3. Challenges in Decentralized Layer 2 Development
- More decentralization in layer 2 solutions like Botanix's SpiderChain means less speed and throughput – a chosen compromise:
> "_If you want to be decentralized, your downside is indeed like you cannot be super fast. You cannot be high throughput. And so that's a trade-off you make. So we won't have the lifeless issues. We won't have the censorship resistance issues, but it comes at a cost of speed and throughput._”
- Willem stressed that besides their testnet, nobody has a complete, functioning end-to-end Bitcoin Layer 2 product with decentralization:
> "_Out I don't think there's any Bitcoin layer 2 yet that actually has a fully end-to-end working product except for our internet, so I think we're still the only ones that have actually shipped a product_”
- Botanix designed a decentralized platform with a decentralized sequencer from the beginning, which will copy a Bitcoin-based Ethereum with a 10-second block rate:
> "_Really, you can compare Botanix almost like an Ethereum that's put on top of Bitcoin. Then on top of us, you can go even faster so we'll have like 9/10 second blocks_”

## 4. Ecosystem and Projects on Botanix
- Botanix has already drawn a variety of projects to build a dynamic ecosystem on its platform:

> "_We've, over the last, I think, two weeks, we've announced quite a few, or like a limited amount of those projects. There's a lot in the pipeline._”
- Projects include Bitzy (EMM index), Palladium (Bitcoin-backed stablecoin), Frax (partnered), BitPerp and Vertex (Perpdexes), and a liquid staking protocol not yet named:

> "_So Bitzy, definitely check them out. A very, very legit team building a really cool Really cool product. Then we've got Palladium. So Palladium is a Bitcoin-backed stablecoin. (...) I think we've announced a partnership with Frax. So you'll have Frax on top of Botanix. Then we, I think earlier this week we announced with BitPerp, and last week we announced with Vertex, so Perpdexes._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_6cb5c2edb2.png)
_([Source](botanixlabs.xyz))_

- These projects will offer foundational DeFi services, including liquidity providing, oracles, decentralized exchange functions, and a bridge from Botanix to Ethereum, thus presenting a decentralized version of wrapped Bitcoin on Ethereum:

> "_There's some building blocks that are still missing, but those are not announced yet. You have, of course, oracles and bridges, for example, bridge from Botanix to Ethereum itself. So you will have a decentralized version of wrapped Bitcoin on Ethereum. (...) So there's much more possibilities than a lot of people think about. But those announcements are coming._”
## 5. User Experience and Bridging to Botanix
- Users can simply transfer Bitcoin to Botanix Layer 2 through a bridge operational since November on the testnet:
> "_Yeah, that bridge is actually already made and you could already use it and test it out on the testnet. It's been online since November, so we're connected to a bit of a testnet._”
- The bridge creates a unique Bitcoin deposit address linked to a user's MetaMask EVM address for smooth transactions from exchanges or wallets:
> "_You basically connect your MetaMask and then you generate a what's called Bitcoin deposit address. And this Bitcoin deposit address is uniquely linked to your EVM address. It's a unique address that's specifically for your EVM address._”


- Botanix plans to reward active users with various token launches:
> "_We have a lot of different founding teams that are building on top of us that will do their token launches on top of Botanix. So any active users will get a lot of different rewards._”
## 6. Technical Aspects and Censorship Resistance
- The SpiderChain's consensus mechanism is ground-breaking, serving as a Proof of Stake over Bitcoin's Proof of Work, bypassing the usual limits of Proof of Stake and achieving a truly decentralized system:
> "_And so one of the big breakthroughs that I had when Designing the SpiderChain is actually realizing that you cannot avoid a new consensus. And so actually for the first time we build a consensus on top of a consensus. So we build a proof of stake on top of a proof of work, which is quite unique._”
- Consensus is reached through a network of multisigs, selected randomly from participants, forming a decentralized network on top of Bitcoin:

> "_If you look from a higher level, it's this whole decentralized network between thousands of people that all have like two out of two multisigs with random other people. And so if you think that model, but then think bigger, that's a little bit of what the SpiderChain is._”
## 7. Fees and Transaction Costs
- The transaction fees on Botanix will be very low, less than one cent, due to the Layer 2 design not needing to send data back to Bitcoin's base layer:


> "_When you think about the Layer 2s on Ethereum, where a lot of the higher fees come from, it's because they need to post the data back to the base layer. and like I said earlier because we are decentralized we don't have to post the data back to the base layer_”
- It promises the functionality of Ethereum without the high "gas" fees:
> "_So we can keep the fees extremely low and so our base fees are gonna be less than one cents so it should be very very cheap transactions_”
## 8. Botanix Development Roadmap
- testnet v1 is set to launch soon and will undergo auditing:

> "_Roadmap, we have had testnet v0 online since like November. We're now almost ready with what we call testnet v1. That will go online very soon._”
- The first mainnet launch will include a federated sidechain with 15 decentralized sequencers running nodes from the start:


> "_When that audit is completed, then we go to mainnet. that will start off as a federated sidechain, so we'll start off with 15 different nodes that all run a full node._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_e5e0e0b54e.png)
_([Source](botanixlabs.xyz))_

- By 2025, Botanix aims to have a fully working SpiderChain:
> "_After that we basically start growing the group, and then we expect to have full-blown spider-chaining works by somewhere in 2025. It's a little bit of the roadmap._”

## 9. Mainnet Expectations
- Willem outlined there will be plenty of activities for users once the mainnet goes live, including a variety of products and protocols to engage with. It was also mentioned that there will be numerous different airdrops that users can participate in with the released mainnet:
> "_There will be a lot of things to do once we go to mainnet, a lot of different products to use, and a lot of different protocols that will do a lot of different airdrops. So yeah, join the community and definitely stay up to date._”
## 10. Developer Outreach
- Willem called upon Ethereum developers who are fond of Bitcoin, pointing out that now they can build on Bitcoin:
> "_If you're developing in the Ethereum ecosystem as a dev and you write Solidity smart contracts, but you actually love Bitcoin, then this is your moment. Now you can finally build on Bitcoin. So definitely reach out._”


Botanix is preparing to debut its decentralized Bitcoin Layer 2 solution, the SpiderChain. To learn more about Botanix and remain up to date on their progress, check out the highlights of  our most recent AMA

Exploring Bitcoin L2s w/ Botanix 

[Elastos](https://elastos.info/) is creating a secure, user-owned internet by integrating Bitcoin's reliability with its decentralized carrier network. In a recent AMA, Jonathan emphasized the ELA token's significance in network security as well as the _Essentials_ wallet's decentralized identity. Upcoming developments include the _CreDa_ credit system and improved governance via ELA staking.

Elastos also uses local nodes for data storage and merge mining with Bitcoin. The ecosystem supports innovative projects such as _Elacity_. Deep dive into Elastos' progress and join their community channels for additional information:

**X Spaces**: [Exploring Bitcoin with Elastos](https://x.com/stakingcircle/status/1792918400089395546)

**Youtube**: [Exploring Bitcoin with Elastos](https://www.youtube.com/watch?v=L9TaI7MFVII&t=2s)

**Spotify**: [Exploring Bitcoin with Elastos](https://open.spotify.com/episode/2EIlpfOAXdjiWLMPZXUGiy)

**Speakers**: 
- Jonathan ([X Profile](https://x.com/metaverse4good)): Global Head Growth @ Elastos ([X Profile](https://x.com/ElastosInfo))

**Index**:
1. Elastos Overview
2. Decentralized Carrier Network and Bel2 Protocol
3. Bitcoin Integration and Security
4. ELA Token Role in Ecosystem
5. Developer Community and Resources
6. Essentials Wallet and Identity Security
7. Future Developments and Roadmap
8. Staking and Super Nodes
9. Ecosystem and Layer 2 (L2) Strategies
10. Community Engagement and Information Resources


## 1. Elastos Overview
- Jonathan from Elastos introduced the company and his role as the head of growth. He's responsible for marketing, business development, ecosystem alignment, and investors:
>"_Well, I'm the head of growth at Elastos, which means that I'm responsible for the marketing. I look after also the business development, ecosystem alignment and some of our investors._”
- Elastos aims to build a new internet where users can own and manage their data more securely and fairly:
>"_So I'm really excited because I see the potential right now for the whole idea behind Elastos really is this concept of being able to build a new internet, one that's based on certain principles around having the ability to own your data, to be able to manage some of your assets more equitably._”
- Talked about Elastos's Runtime technology, which lets developers create sophisticated peer-to-peer ecosystems:
>"_We have a fantastic technology concept called Runtime, which allows us to really build very sophisticated peer-to-peer ecosystems._”

## 2. Decentralized Carrier Network and Bel2 Protocol

- Jonathan explained Elastos's decentralized carrier network, which allows users to store their data on local nodes. This is key to creating a fully decentralized carrier system using DID technologies. This decentralized model can significantly help areas with poor carrier coverage due to its localized node structure:

>"_We're able to decentralize it around localized nodes so that... An individual can store their own data on that node and then the network using our DID technologies and actually our runtime technology can create a fully decentralized carrier ecosystem._”
- Bel2, pointed out by Jonathan as a focus area for Elastos, is a layer two communication protocol that facilitates efficient information transfer and scalability while reducing centralization risks:
>"_I think, the kind of revolution in the last year and what we're looking at with what we call our Bitcoin Elastos layer two, which we call Bel2, just to save ourselves a tongue twister. So Bel2 is kind of our focus on moving up to that next layer.”

## 3. Bitcoin Token Role in Ecosystem

- Elastos, as Jonathan stated, is merged mined with Bitcoin, using over 50% of Bitcoin's hash power to secure smart contracts:

>"_So, as I said, it's information transfer. By being merged mined with Bitcoin, Elastos has over 50% of the hash rate of Bitcoin. So we're able to generally offer a pretty secure system for securing these kind of contracts._”
- Uses ZK proofs for secure asset management on the Bitcoin network, ensuring transactions are verified for enhanced security:
>"_The use of the ZK proofs, and again, those are audited and have to be secured with third-party audit companies. So from a secure position, we believe we've got a very strong case._”
## 4. ELA Token Role in Ecosystem
- The ecosystem includes the Elastos Smart Chain and an identity chain. ELA enables various consensus protocols important for the system's functionality:
>"_ELA is merged mined with Bitcoin. Its role in the ecosystem is obviously it is able to secure the main chain, but we also have several other side chains, actually._”
- Talked about ELA's tight link with Bitcoin as a way to provide flexibility for community projects and resource development:
>"_Sometimes we refer as if bitcoin is the king we're kind of almost on the chessboard a bit like the queen and that we allow some of that flexibility that i just described in the l2 model to really work and create hopefully quite vibrant products and communities and resources that I was outlining._
## 5. Developer Community and Resources

- Jonathan mentioned grant programs for non-infrastructure project building, highlighting Elacity as an example:

>"_So, you know, really this year, one of the exciting things is we've launched a series of grant programs to help develop some._”
- Elacity uses decentralized DRM through data capsules and access tokens, showing Elastos's commitment to supporting innovative community solutions:
>"_What Elacity does is it it has a marketplace but also it has an ability to create what we call decentralized DRM decentralized digital rights management you So what this means is actually using the runtime technology I mentioned, we're able to pass data capsules across the network and create what we call access tokens._”
- Announced the Elacity V2 launch, which introduces a new model for the content industries to control data, creative output, and revenues more independently:
>"_But the benefit is obviously that you control not just your data and not just your creative output, but the vast majority of the revenue that comes from that. So you don't have to hand over 65% to YouTube. You can keep 95%. You do pay 5% to the platform._”
## 6. Essentials Wallet and Identity Security

- Jonathan talked about the Essentials wallet, focusing on its use of a side chain for identity. It's noted that the wallet offers decentralized identity, which is essential for overcoming security challenges and scaling in Web3 environments:

>"_So we have a really interesting wallet called Essentials, which is what's really interesting about it is it's able to utilize our side chain for identity so it does all the things that a normal wallet can do but one of the issues that we're very focused on around security and scalability_”
- The need to include verified credentials in the wallet was emphasized, given how easy and cheap ($15) it is to get a fake passport. This shows how important a more secure system is:
>"_And I think the important point with this is that also we're doing work with ensuring that verified credentials are added to that because obviously if your credentials, it costs $15 to get a fake passport these days. So if you are able to do that, then again, you're creating this false identity in the system._”
- The ability to build a life history with verified credentials was talked about as a security feature, even though copying someone's life history has limited financial value:
>"_Verified credential system that you can build via the wallet, you're able to, you know, basically create a whole life history._”
## 7. Future Developments and Roadmap
- Jonathan shared future plans, which include demos for loan products and the development of systems that share value happening on Bitcoin, thanks to a communication protocol:
>"_I mentioned that we're looking at demos for loan products, but obviously one of the things that having a communication, a protocol at that level enables is lots of data about what's happening on and around Bitcoin._”
- They introduced the " CreDa" credit system, designed to evaluate creditworthiness by using a BTC oracle for achieving global consensus:
>"_One of the product projects we work on there is actually a credit system which is called CreDa which allows you to create an oracle obviously we call this product BTC oracle and this particular product is a very specialized version of an oracle that looks at your credit worthiness._”
- Also talked about the prospects for AI integration in these systems and the effort to develop decentralized physical infrastructures:
>"_So I'm pretty excited about. how that product can evolve. It can also, being an oracle, it also can involve AI systems as well, and it can be federated and made extremely intelligent._
- The importance of DAOs in promoting tech and knowledge advancements was highlighted:
>"_So, yeah, so that would be our next, our kind of another focus. And I know we're looking at DAOs to, you know, invest in thinking and technology and actually knowledge, to be honest. in that area of Deepin as well._
## 8. Staking and Super Nodes

- Jonathan confirmed opportunities for ELA staking on super nodes, detailing a 36% interest rate for those who invest 5,000 ELA:

>"_You're able to stake your ELA and actually the current interest rate is 36% on those nodes and you have to down 5,000 ELA._
- Elections for council memberships are currently ongoing, with 16 candidates competing for 12 seats, showing community involvement in governance through staked ELA:
>"_So we've got, I think for those 12 seats we've currently got 16 people looking to become members of the council, which lasts for a year. And that will be based on this, on staked ELA from the community._”
- Provided details on running common nodes with about a 27% interest rate, requiring a 2,000 ELA investment:
>"_Then we also have a system for running the ordinary nodes, of which we have around 80 to 100, optimally. The rewards go down. And again, that's 2,000 ELA to run one of those nodes. It's very simple. to set one up. And the current rate of interest on those is around 27%._”
## 9. Ecosystem and Layer 2 (L2) Strategies

- The talk touched on Elastos' work with various Bitcoin L2 solutions, highlighting diversity and their intention to avoid wrapped Bitcoin models:

>"_We do see multiple forms of L2. With the way our protocol works, we are building partnerships with many of these new Bitcoin layer twos. And, you know, for us, it's, you know, the more diversity, the better._”
- The role of data services was talked about in relation to enhancing partnerships with different L2 platforms:
>"_We're keen to help with as many L2s as possible and also provide some of the data services that I say are evolving from our model and work with. work with people to figure out the best use of that data._”
- A study led by the CEO of the Elacity project identified six or seven distinct L2 models, pointing to the ecosystem's openness to exploring diverse approaches to improve Bitcoin's functionality:
>"_We already found six or seven kinds of different models, you know, that sort of, you know, you could describe as an L2. And I think we've probably come across a couple more that can be categorized. So I think it's a really exciting time because, you know, there are multiple different approaches._”
## 10. Community Engagement and Information Resources

- Jonathan guided interested people to elastos.info for more information and spotlighted the active Telegram and Discord channels for community participation:
>"_So the starting point is elastos.info, which is our website and blog. Then I can share. our telegram is really active, we've got multiple different group ecosystems actually on that telegram, and then we've got a very strong Discord group so I can share some of those links with you and welcome people to join._”



Elastos is creating a secure, user-owned internet by integrating Bitcoin's reliability with its decentralized carrier network. Deep dive into Elastos progress through the highlights of our recent AMA 

Exploring Bitcoin L2s w/ Elastos

[RunesTerminal](https://runesterminal.io/) is making headway in the Bitcoin ecosystem by building infrastructure for the Runes Protocol, a new fungible token protocol on Bitcoin, which can be compared to ERC20, but for Bitcoin. With its main product, RunesPad, preparing for public testing, RunesTerminal is ready to provide tiered project involvement, utilizing the $RUNI token for platform interactions. With RunesPad and two other tools, RunesTerminal builds key infrastructure for the runes protocol.

For those interested in the convergence between Bitcoin and tokenization, as well as how RunesTerminal will improve Bitcoin's utility, the AMA's insights provide a thorough examination of RunesTerminal’s capabilities and potential. Stay tuned to see how RunesTerminal improves the Bitcoin landscape:

**X Spaces**: [Exploring Bitcoin with RunesTerminal](https://twitter.com/i/spaces/1BdxYrAdOqNKX)

**YouTube**: [Exploring Bitcoin with RunesTerminal](https://www.youtube.com/watch?v=nKo5hHgWvFc)

**Spotify**: [Exploring Bitcoin with RunesTerminal](https://open.spotify.com/episode/1wjZpqm9KSZxxj1Q4BdCDP?si=mxeBN_JHTYCC55IblITZtw)

**Speakers**: 
- Peddy ([X Profile](https://twitter.com/peddy2612)): Researcher @ RunesTerminal ([X Profile](https://twitter.com/runes_terminal))

**Index**:
1. RunesTerminal Intro
2. RunesTerminal Products
3. Runes Token Utility
4. Launchpad Details
5. Development Challenges
6. Roadmap and Future Plans
7. Defi Protocols and Runes Standard

## 1. RunesTerminal Intro

- Peddy presented RunesTerminal as a significant protocol developed for Bitcoin.
>"_I was very active right from the beginning of Runes protocol and when it got like started. And yeah, I'm doing a lot of research on Runes_”
- RunesTerminal enables users to create fungible tokens on Bitcoin, similar to ERC20 tokens on Ethereum.
>"_So it's basically another fungible token standard on Bitcoin. So that means that anyone can create a fungible token on Bitcoin. Like we've seen ERC20 for Ethereum. We see like fungible tokens for Bitcoin as well. And this is just another fungible token protocol. Like there are some others like BRC20_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_91138feed9.png)
_([Source](https://docsend.com/view/5pqc2qzvtj9hvaga))_

## 2. RunesTerminal Products

- Runes Etcher became active at the halving block, block 840,000, for creating Runes tokens.
>"_And we are basically like having or building four products. One is a Runes Etcher. So when creating a Rune token, it's called etching a Rune. So basically. So you need a tool for doing this and it's called the Runes Etcher. So that's the first product and it's already live since like the halving block, at block 840,000_”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_145d46d2f6.png)
_([Source](https://docsend.com/view/5pqc2qzvtj9hvaga))_

- Rune scanner, similar to a block explorer for Rune tokens, set to launch in the next weeks.
>"_Then there is like a rune scanner that will go live in the next weeks as well. It's like a block explorer, as you know, from Ethereum. But for rune tokens, you will see transactions like how many runes an address holds, etc. And you can follow all the transactions. That is the second one._”
- RunesPad, the main product, is a platform for Rune projects offering tiered participation based on the amount of $RUNI held.
>"_And the third product we have, and that is the core product, is the RunesPAd. This is basically a launchpad for Rune projects and with their tokens_”

## 3. Runes Token Utility
- $RUNI token will be vital for using the RunesPad once it's operational.
>"_So the token's utility is basically linked to the launchpad that we will talk later on. So you need the token to interact with the launchpad_"
- $RUNI can be pre-mined or earned by holding an ordinal to qualify for an airdrop.
>"_But you can already pre-mine or farm the token by holding an ordinal. There you get an airdrop of our token. And yeah, that's one way to qualify._”

## 4. Launchpad Details
- Offers a trusted and non-trusted version for project launches.
>"_And for developers or people who want to build something, they can go to the launchpad and we will have like two versions of it. Like there is a trusted version and a non-trusted version._”
- The trusted version of RunesPad is for approved projects with criteria such as having a whitepaper.
>"_So the trusted version is. a version where like trusted projects, they launch there. So they are in touch with us. We advise them, we support them with marketing, etc. And they have to be like, have to have a white paper, etc, and have to fit some requirements._”
- Non-trusted version allows projects to set up launches without working with the Runes team.
>"_And then there is a non-trusted version of the Launchpad where people can just set up their own launch and they can just, yeah, do it without being in touch with us. They can just go to the Launchpad, and click set up a launch._”
- RunesPad will manage funds raised on the EVM side and distribute Rune tokens on the Bitcoin side.
>"_So by now there is no launchpad like this that has this approach like bridging, like or like that's not called bridging, but like getting the liquidity from the EVM side to the Bitcoin layer. There is no such solution with what we are building here with the launchpad._”

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_24891b41b7.png)
_([Source](https://docsend.com/view/5pqc2qzvtj9hvaga))_

- Participants will need an EVM-compliant wallet like MetaMask and a Bitcoin wallet for transactions.
>"_So yeah, the funds get raised on the EVM side and you need an EVM wallet, for example, MetaMask. And the token itself gets created on the Rune side._”

## 5. Development Challenges

- The Runes protocol became active three weeks ago, with the team having been working for about 4-5 months.
>"_So the Runes protocol, the protocol we built on, went live three weeks ago. So it's a very, very young technology. And yeah, we had like before that, we already started working, we've been building for like four or five months now. So it was quite some time._”
- Frequent code updates by the Ordinals inventor required continuous alterations by the Runes team.
>"_So the founder of the, or like the creator of the Ordinals protocol and of Ordinals is the same person that created the Runes protocol. And yeah, so once the protocol was not live, we faced some challenges regarding the code and coding everything because Casey, the creator of both protocols, He changed the code and then we had to adapt_”

## 6. Roadmap and Future Plans

- RunesPad public testing phase recently started with selected testers; public testing anticipated in the forthcoming weeks.
>"_Our like test version went live. You can apply with the forms. I just pinned it in on the top. I hope it's okay. Please go ahead. It's basically for testers and we will select them and in the next stage there will also be a public test and where everyone can test the pad And etc._”
- Looking forward to the TGE for dispersing the $RUNI token.
>"_We are pushing forward with the TGE, so distributing our token. And yeah, finally looking forward to the point of time where the... Launchpad goes live, like the final version, and everything works, and people can participate in new projects and new fundraises and get some exposure in other projects through the Launchpad.”
- Planning a Runesbook, an exhaustive wiki for all things Runes.
>"_And the fourth one is like a runes book, like a tool or like a wiki for everything you need to know about runes, how it works, how it differs from other token standards, etc. Just like a wiki for runes._”

## 7. Defi Protocols and Runes Standard

- Since Runes operates on Bitcoin layer one, native staking is not currently possible.
>"_So there is no staking per se possible because the Rune itself, like the token itself, like as I just said, everyone can create a token and it's stored in the UTXO of Bitcoin. So you can't just stake it as you know it from other chains. But maybe there will be some possibilities with layer two._”
- Future staking solutions may involve partnerships with layer two projects, which are in consideration.
>"_Solution that we also like collaborating with, we're in touch with with some layer twos and also partnered with several and yeah i think like there will be solutions to stake your rune tokens in the future as well it just takes time because it cannot be done on the native chain_”




For those interested in the convergence between Bitcoin and tokenization, as well as how RunesTerminal will improve Bitcoin's utility, the AMA's insights provide a thorough examination of RunesTerminal’s capabilities and potential. Stay tuned to see how RunesTerminal improves the Bitcoin landscape

Exploring Bitcoin w/ RunesTerminal

[Bob](https://www.gobob.xyz/) intends to bolster blockchain interoperability by combining Bitcoin and Ethereum functionalities into a single hybrid chain, with operations beginning after the upcoming Bitcoin halving. Bob, led by founders with extensive cryptography knowledge, intends to improve Bitcoin's programmability and expand its usage across a variety of applications.

The launch of Bob's pre-mainnet campaign, Bob Fusion, demonstrates their dedication to engaging the community and motivating involvement through distinctive incentive schemes. As Bob prepares to debut, it welcomes developers and projects to explore its distinct ecosystem, which supports a wide range of applications from DeFi to GameFi. Those interested in the cutting-edge intersection of Bitcoin's solid security and Ethereum's rich programmability will find the AMA's deep insights valuable. Stay tuned to Bob's channels for the most recent updates and developments as they work toward a transformational blockchain synthesis.

**X Spaces:** [Exploring Bitcoin L2 with BOB](https://twitter.com/stakingcircle/status/1779827393126895671)

**Speakers**: 

- Zhixi ([X Profile](https://twitter.com/nikki_sunset)) - Ecosystem Growth @ Bob ([X Profile](https://twitter.com/build_on_bob))

Index:

1. Introduction to Bob's Hybrid Chain
2. Technical Features of Bob
3. Mainnet Start amd Particiapting Projects
4. Bob Fusion Campaign
5. Bitcoin Asset Availability on Bob
6. Bitcoin Landscape and Impact on Bob
7. Final Remarks and Updates

## 1. Introduction to Bob’s Hybrid Chain

- Bob is a hybrid chain mixing Bitcoin and Ethereum features:
> "Bob is a hybrid chain. Hybrid meaning it's an intersection between Bitcoin and Ethereum.”
- Founders Alexei and Dom have cryptography PhDs from Imperial College London:
> "Our team has been building on Bitcoin for many years. In fact, our founders, Alexei and Dom, were actually PhDs from Imperial College London studying cryptography, specifically on the interoperability and cross-chain possibilities for Bitcoin.”
- They first created Interlay, a bridge for Bitcoin to the Polkadot ecosystem:
> "So years ago we developed a cross-chain bridge called Interlay. Maybe some of you have heard. It is a bridge to bring Bitcoin to the Polkadot ecosystem and it existed as a parachain.”
- Realized the need for more infrastructure to improve Bitcoin's programmability and wide use:
> "To truly scale Bitcoin and truly bring mass adoption to Bitcoin because there is so much limitation to Bitcoin, not just with cross-chain, but also with programmability, especially seeing all of the growth that's in other ecosystems like Ethereum with all of the smart contracts and the creative things that you can do.”
- Made a roll-up on Ethereum using the Optimism stack to be compatible with Ethereum standards (ERC20s, ERC721 for NFTs):
> "We reached the conclusion that we want to build a roll-up on Ethereum. We chose the Optimism stack, meaning that our technicality is very similar to Base or OPBMB. We're compatible with all of the other L2s that is using the same technology provided by Optimism. And all of the... Assets that's available in the Ethereum world, like ERC20s or ERC721 for NFTs,”



## 2. Technical Features of Bob

- Bob is connected to Bitcoin; can read and post Bitcoin messages through a light client; meant for developers:
> "We have a light client that is reading and posting messages on Bitcoin. So through this light client, you can build a program, you can build smart contracts that can interact with Bitcoin, but on Ethereum.”
- Made a demo for peer-to-peer swap between UTXOs and ERC-20 assets:
>"Thing. Some of the use cases I can, like one example is that we built this demo. which is a peer-to-peer swap between UTXOs and ERC-20 assets. So people can send, for example, Bitcoin.”
- Plans to start merge mining with Marathon Digital to produce Bitcoin blocks and Bob blocks at the same time:
> "After our mainnet launch, we have the plans to implement merge mining with the help of Marathon Digital, which means when the miner produce a Bitcoin block, it's also going to be producing blocks on Bob at the same time.”


## 3. Mainnet Start and Participating Projects

- Scheduled for a date after the Bitcoin halving:
> "You. Well, first of all, our mainnet launch is planned for some time after halving. I'm not going to name a date just because with the development.”
- Sovereign, an OG Bitcoin DeFi project, plans to move to Bob:
> "We already have an announcement with Sovereign, which is one of the oldest and most OG Bitcoin DeFi projects. They are migrating to Bob, meaning that you can basically trade and set up liquidity pools for between ERC-20 assets and TBTC, WBTC on Sovereign.”
- Other partnerships include DEXs like Velodrome, Layer Bank (lending and borrowing), and not shared NFT marketplaces:
> "Sovereign. And we will also have Velodrome in the DeFi sector. We will have Layer Bank, which is providing like lending and borrowing. On the other side, we will also be supporting NFTs. I cannot really disclose the NFT marketplaces because we are working with them to understand. a clearer timeline on when this will be available”
- GameFi projects are making mini-games for Bob, tied to the ongoing Fusion campaign:
> “And we also have some GameFi projects that are slowly building mini games for Bob. And this could be tied to like the Fusion campaign that is going on, which I recommend everybody to check out, which is like a point system that we use to incentivize people to interact with Bob as soon as possible.”

## 4. Bob Fusion Campaign

- Bob Fusion is a pre-mainnet campaign with a referral program offering SPICE points as rewards for participation:
> "Bob Fusion campaign is one way that we provide users with early exposure to Bob. (...) So before the mainnet launch, we developed a contract. It's non-custodial. It's just a contract where people can deposit certain assets into the contract. These assets, we have different tiers of the assets. So, for example, if you deposit Bitcoin related assets, it's probably going to give you more rewards. (...) We invite people to start depositing it and once you deposit even just if it's just one dollar worth of assets you will receive a referral code which you can share with your friends or families. And when they do deposit their assets you are going to receive a spice points. We call it spice. This is a Dune movie inspired campaign. So you will receive SPICE also from their referrals. This way we want to build a community of Bob users.”

## 5. Bitcoin Asset Availability on Bob

- WBTC and TBTC, popular Bitcoin assets on Ethereum, will be available on Bob:
> "Bob. So the two most popular Bitcoins in Ethereum are WBTC and TBTC. WBTC being the largest in terms of volume, but it's a more centralized approach in terms of the way that it's bridged. And there's TBTC, which is the second largest Bitcoin asset on Ethereum,”
Users can bridge using the native optimism bridge or an on-ramp feature being made to deposit Bitcoin and get WBTC or TBTC on Bob's chain:
 "like WBTC or TBTC, you can use the native optimism bridge to bring it over to Bob. It's going to be a little bit slower, but what is very exciting is that we are building a on-ramp feature where people will be able to deposit their Bitcoin into an address and immediately receive either WBTC or TBTC of their choice on Bobchain.”


## 6. Bitcoin Landscape and Impact on Bob

- Negativity regarding Bitcoin's limited programmability has shifted with the start of the Ordinal protocol:
> "So the past few years a lot of the A lot of the feedback that we received from, you know, talking to VCs or projects is that people were pessimistic about Bitcoin because of the limited programmability and the limited action and change that was happening to Bitcoin. (...) once Ordinal was live, a lot of the users coming from the Ethereum community, Solana community, starts to pay attention to Bitcoin because what they could do only on Ethereum is now possible also on Bitcoin.”
- Ordinals give non-fungible features to satoshis, creating a new layer of value:
> "When like inscription and order basically changed the entire landscape of Bitcoin because it provides. a non-fungible aspect of SATs. So Satoshi's means differently. Like previously, maybe like two years ago, if I send you a SAT, 10 SATs, and you send me 10 SATs, it's exactly the same. But ever since last year, when the serial number, when the numbering system gave new meaning to Satoshi's, it's no longer the same.”
- BRC20 assets have come up, expanding use cases and connection with DeFi communities:
> "And this also led to the birth of BRC20 assets, which is the, you know, first possible. The potential for having something similar to like meme coin which can actually engage with the DeFi community in terms of not just culture but also like incredible amount of different kind of utilities”
Bob aims to support developers to connect with the Bitcoin base chain via Solidity contracts and cater for Ordinal-inspired development:
 "Bitcoin. Of course, the developers are also going to get into it. And a lot of these developers start to build on Bitcoin, learn about UTX load, learn about what Bitcoin protocol is.”


## 7. Final Remarks and Updates

- Follow Bob on social media for news on advances and the mainnet start post-Bitcoin halving:
> "We have a dedicated website for this. So definitely go up there. If you need an early access link, feel free to join our Discord and our Telegram channels. I'm sure there are a lot of people providing their codes for you to access.”












Bob intends to bolster blockchain interoperability by combining Bitcoin and Ethereum functionalities into a single hybrid chain, with operations beginning after the upcoming Bitcoin halving. Bob, led by founders with extensive cryptography knowledge, intends to improve Bitcoin's programmability and expand its usage across a variety of applications.


Exploring Bitcoin L2s w/ BOB

[Rootstock](https://rootstock.io/) is transforming the Bitcoin ecosystem by combining Bitcoin's security with Ethereum's smart contract capabilities, which have been operational since 2018. Sam, speaking about Bitcoin staking through Rootstock, stressed DeFi's potential without having to give up Bitcoin, thanks to their POWPEG bridge, which ensures strict Bitcoin backing for R-BTC. With Rootstock Labs setting aside $5 million for development funding, the platform is on the verge of massive expansions aimed at increasing Bitcoin's utility in DeFi.

For those interested in the combination of Bitcoin's strength and Ethereum's functionality, as well as the innovative strides Rootstock is making in the DeFi field, the AMA highlights serve as a gateway for further exploration. Explore Rootstock's vision for expanding Bitcoin's horizons in the DeFi ecosystem, as well as how it has the potential to reinvent economic freedom and accessibility globally.

**X Spaces**: [Exploring Bitcoin Staking
](https://twitter.com/stakingcircle/status/1777698841338187909)

**Speakers**: 
- Sam ([X Profile](https://twitter.com/GoldenGatsby)): Director of Brand & Communications @ RoostStock ([X Profile](https://twitter.com/rootstock_io))



**Index**: 

1. RootStock Intro
2. Bitcoin Staking On Rootstock
3. Key Differentiators of RootStock
4. The Bitcoin to Rootstock Bridging Process
5. Understanding RBTC (Smart Bitcoin) and its Role
6. The Impact of Rootstock on the BItcoin Ecosystem
7. Bitcoin Ecosystem Growth
8. Bitcoin Legal Tender
9. Rootstock Development Inicaitives
10. Rootstock Roadmap and Updates
11. BitVM and Bitcoin Bridge



## 1. RootStock intro

- Sam explained that Rootstock is the most prominent Bitcoin sidechain, also known as a Bitcoin L2, which started in 2018:

> “So  Rootstock  is  the  largest  and  longest  running  Bitcoin  side  chain,  often  referred  to  as  a  Bitcoin  L2”

- Sam pointed out that Rootstock uses proof of work consensus and benefits from about 60% of Bitcoin's hashing power through merge mining:

> “We  are  a  separate  blockchain  cryptographically  connected  to  the  Bitcoin  main  chain  through  a  process  known  as  merge  mining.  So  we  use  proof  of  work  consensus,  leveraging  about  60  percent  of  the  hashing  power  of  the  main  Bitcoin  network.”

- He mentioned the security benefit of Bitcoin miners securing Rootstock's network, which attracts them for the extra income:

> “So  all  of  the  Bitcoin  miners  are  simultaneously  merge  mining  Rootstock,  which  is  what  creates  the  security  of  the  Rootstock  network.”

- Sam highlighted that Rootstock's compatibility with the Ethereum Virtual Machine allows dApp deployment directly on Bitcoin, attracting EVM builders and Solidity developers:

> “What's  really  exciting  about  Rootstock  as  a  network  is  we've  got  the  connection  to  Bitcoin,  but  also  it's  EVM  compatible.  So  anyone  can  deploy  dApps  on  top  of  Bitcoin  using  Rootstock. (...)  We're  seeing  more  EVM  builders  and  Solidity  developers  moving  their  protocols  from  other  chains  and  launching  them  on  top  of  Bitcoin  using  Rootstock,”

- The Rootstock white paper was released in 2015, with the main network operational for over 2000 days and maintaining 100% uptime:

> “I  was  just  going  to  say,  yeah,  the  white  paper  was  first  published  back  in  2015  and  Rootstock  launched  on  mainnet  in  2018.  So  that's  over  2000  days  mainnet”

- Sam planned to release a merge mining report detailing hashing power sources and mentioned about 62% of Bitcoin's hash power supported Rootstock in Q1 of this year:

> “And  over  Q1,  so  January,  February  and  March  of  this  year.  We've  had  about  62%  of  the  hash  power  of  Bitcoin  has  been  securing  the  network,  which  is  really  cool.”

## 2. Bitcoin Staking On Rootstock

- Sam explained Bitcoin is converted into Smart Bitcoin (R-B-T-C) for gas fees on Rootstock via a trustless bridge:

> “So  the  really  exciting  thing  about  Rootstock  is  Bitcoin  is  used  for  gas  on  the  network.  So  using  a  trustless  bridge  from  the  Bitcoin  main  chain,  you  can  move  your  Bitcoin  into  rootstock  where  it  takes  the  form  of  R-B-T-C,  what  we  sometimes  call  smart  Bitcoin.”

- He pointed out Sovereign as the leading staking protocol on Rootstock, offering various staking options:

> “And  an  example  I  can  give  you  today  is  Sovereign.  A  lot  of  people  on  the  call  have  probably  heard  of  Sovereign.  It's  the  largest  DeFi  protocol.  in  the  world  today,  I  believe,  and  it's  built  on  top  of  Rootstock.  They  offer  a  number  of  different  staking  opportunities,”

- Sam intrigued the audience with Sovereign's innovative products and the potential for 0% interest Bitcoin-backed loans, providing capital access without liquidating Bitcoin holdings:

> “So  you  can  get  a  loan  from  your  Bitcoin  with  0%  interest,  which  is  super  interesting.  So  you  don't  have  to  sell  it.  and  you  can  access  that  capital  and  then  use  it  on  other  protocols  in  the  network  as  well.”

## 3. Key Differentiators of RootStock

- Sam described Rootstock's advantage of being the first of its kind, its cryptographic links to Bitcoin, and support from miners:

> “I  think  the  deep  cryptographic  connection  with  Bitcoin,  the  fact  we  have  the  support  of  the  mining  pools  actually  providing  that  security ”

- He focused on the ongoing development of merge mining partnerships, providing extra earnings for Bitcoin miners from Rootstock's network:

> “ And  the  reason  that  those  Bitcoin  miners  choose  to  secure  rootstock  through  merge  mining  is  they  earn  the  fees  from  the  rootstock  network  for  doing  so.”

- Rootstock contributes to Bitcoin's security and aims to enhance its value proposition:

> “We  should  be  working  to  contribute  to  the  security  budget  of  Bitcoin  and  extend  the  value  of  Bitcoin  as  well.  And  that's  something  that  Rootstock  does.”

- Sam highlighted Rootstock's uniqueness in not having a separate monetary token, with Bitcoin exclusively used within the network:

> “And  that's  why  there  isn't  a  competing  money  token  on  rootstock.  Some  other.  networks  that  claim  to  be  sidechains  or  L2s  to  Bitcoin.  Gas  is  paid  in  a  competing  token  to  Bitcoin.”

- He also talked about the opportunities on Rootstock to engage with NFTs and token launches, while maintaining a Bitcoin-centric approach:

> “But  there  is  also  the  opportunity  to  access  NFTs.  launch  your  own  tokens  that  leverage  the  security  of  Bitcoin,  whatever  you  might  want  to  do.  But  at  the  core  of  it,  Bitcoin  is  the  kind  of  the  gas  fee  token  for  the  network,  which  we  think  is  really  important”

## 4. The Bitcoin to Rootstock Bridging Process

- The main mechanism is the POWPEG bridge, now with enhanced security and over 3000 Bitcoins locked:

> “You  move  your  Bitcoin  through  a  process  called  the  POWPEG,  the  proof  of  work  PEG,  which  is...  uses  multiple  different  layers  of  security  to  make  sure  that  your  Bitcoin  is  safe,  locked  in  that  peg.  There's  over  3000  Bitcoins  locked  into  that  peg  today.”

- He detailed alternative routes to access RBTC, including exchanges and various apps and services:

> “So  you  could  use  an  exchange  to  access  RBTC  on  Rootstock  immediately.  Someone  like  Buenbit,  Mount  Pelerin,  Decrypto.  You  could  use...  Some  of  the  apps  launched  on  top  of  Rootstock  offer  different  bridging  mechanisms.”

- He named Symbiosis and cross-chain solutions like Oku as options for converting other tokens to RBTC on Rootstock:

> “You  can  also  bridge  from  many  other  networks  using  Symbiosis,  which  is  a  cross-chain  aggregator,  or  Oku,  or  many  other  different  sites.”

## 5. Understanding RBTC (Smart Bitcoin) and its Role

- Sam affirmed R-BTC is pegged one-to-one with Bitcoin on the Rootstock network, ensuring seamless conversion and maintaining asset fluidity:

> “So,  as  you  move  it  over,  it's  always  one-to-one  pegs  with  Bitcoin  and  you  can  move  it  back  through  that  bridge  at  any  time  and  receive  the  same  amount  of  Bitcoin  back.”


## 6. The Impact of Rootstock on the Bitcoin Ecosystem

- Sam related Rootstock's goals to Bitcoin's potential as a tool for economic freedom during Argentina's economic struggles, combined with Ethereum's smart contract abilities:

> “Topic.  And  really,  it  goes  back  to  the  origins  of  Rootstock  back  in  2013  in  Argentina.  And  the  creators  of  the  network  back  then  were  experiencing  a  devaluing  currency (...)  And  at  the  same  time  that  they  were  looking  at  Bitcoin  as  this  tool  for  economic  freedom,  they  also  discovered  Ethereum  and  the  programmability  that  that  allowed  in  a  decentralized  way. “

- He outlined Rootstock Labs' objective to utilize Bitcoin for DeFi, enabling complex financial actions such as lending and saving: 

> “So  we  talk  a  lot  about  economic  freedom  and  we  also  talk  a  lot  about  everyday  DeFi.  I  know  the  audience  today,  a  lot  of  you  are  probably  very  advanced  DeFi  users.  We  believe  the  real  next  chasm  to  cross  for  DeFi  is  to  move  to  a  world  where  everyone  can  interact  with  it,”

- Rootstock Labs is striving for global DeFi adoption, providing people access to everyday financial tools without central authority restrictions or high fees:

> “DeFi  isn't  just  for  the  select  few,  but  everybody  has  the  opportunity  to  interact  with  it,  to  protect  their  savings  from  inflation,  to  be  able  to  send  currency  around  the  world  without  limitations  or  high  fees.”

## 7. Bitcoin Ecosystem Growth

- Sam observed a resurgence of interest in Bitcoin due to ETFs, Ordinals, and BRC20 tokens, which present new opportunities:

> “There.  The  recent  kind  of  approvals  of  Bitcoin  ETFs  and  the  launch  of  things  like  Ordinals  and  BRC20  tokens  has  brought  a  lot  more  excitement  back  to  the  Bitcoin  ecosystem.”

- He stated that the DeFi market for Bitcoin might be smaller than Ethereum's, but it has potential to leverage trillions through sidechains like Rootstock:

> “The  Bitcoin  DeFi  ecosystem.  the  size  of  it  pales  in  comparison  to  the  DeFi  activity  happening  on  Ethereum.  But  that  being  said,  there's  trillions  of  dollars  locked  inside  Bitcoin  that  people  could  be  putting  to  work  on  side  chains  like  Rootstock.  And  that's  where  we  think  the  big  opportunity  is  and  what  we'll  see  happening  over  the  next  few  years.”


## 8. Bitcoin Legal Tender

- El Salvador has set a precedent by adopting Bitcoin as legal currency. Additionally, Argentina, has made it legal tender as well, which might boost DeFi exploration using Bitcoin:

> “ Think  El  Salvador  is  a  classic  example,  but  also  in  Argentina  now.  Argentina  have  accepted  Bitcoin  as  a  legal  tender,  as  something  that  can  be  used  to  pay  for  different  services.”



## 9. Rootstock Development Initiatives

- Sam announced that Rootstock Labs is allocating $5M in grants throughout the next year to encourage development on Rootstock:

> "Rootstock  Labs  is  committing  $5  million  over  the  next  year  for  grants  to  anyone  looking  to  build  on  top  of  Bitcoin  using  Rootstock.”

- The grants start at $25,000 upwards, to support developers creating businesses and services using Rootstock:

> “There's  lots  more  information  about  this  on  the  Rootstock  Labs  website,  but  essentially  there  are  grants  ranging  from  $25,000  up  ”

 ## 10. Rootstock Roadmap and Updates

- Significant updates are anticipated at Bitcoin++ in Austin and Bitcoin Nashville later this year:

> “I  think  one  thing  I'd  say  to  everyone  is  keep  your  eyes  out  on  the  stage  of  Bitcoin++  in  Austin  this  year,  as  well  as  Bitcoin  Nashville  later  in  the  year  for  some  big  announcements  from  some  of  the  core  contributors.”

- The Rootstock community contributes to its evolution through proposals, akin to Bitcoin's BIPs.

> “They're  referred  to  as  RSK  IPs  in  the  same  way  you  have  bits  on  Bitcoin.  And  those  proposals  cover  a  whole  different  wide  range  of  things.”

- Initiatives to integrate Lightning Network swaps and introduce Ordinals to Rootstock are in progress.

> “We've  introduced  Lightning  Network  swaps,  so  swapping  LBTC  on  Lightning  straight  to  RBTC  on  Rootstock.”

- More EVM protocols are considering Rootstock integration, potentially bringing in staking, DEXs, and other services.

> “There's  also  been  a  big  wave  of  new  protocols,  especially  EVM  protocols,  integrating  Rootstock  as  a  way  to  build  a  bridge  to  Bitcoin.  I  expect  to  see  a  lot  more  of  that  in  the  coming  months  as  well,  especially  in  terms  of  staking,  DEXs,  bridges,  aggregators,  lots  of  interesting  projects,”

## 11. BitVM and Bitcoin Bridge

- Ongoing research is underway for BitVM, aimed at creating an unrestricted bridge between Rootstock and the Bitcoin mainchain.

> “Then.  I  guess  like  a  final  thing  to  mention  here,  I  talked  about  the  Bitcoin  bridge  that  connects  rootstock  and  Bitcoin  main  chain.  There  is  a  research  project  at  the  moment  investigating  BitVM.  A  lot  of  you  may  have  already  heard  about  BitVM  to  create  an  entirely  permissionless  Bitcoin  bridge  connecting  rootstock  and  Bitcoin.”

- The BitVM white paper was published in October of the previous year, possibly leading to a significant innovation in trustless bridging.

> “October  last  year,  people  didn't  even  know  would  ever  be  possible.  We're  becoming,  we're  reaching  a  reality  where  that  will  become  possible.  And  Rootstock  Labs  and  a  number  of  other  contributors  to  Rootstock  have  formed  a  bit  of  a  super  squad  investigating  a  way  to  use  BitVM,  evolve  BitVM  and  implement  it  in  a  way  to  create  a  trustless  bridge  between  Bitcoin  and  Rootstock  main  chain.”


















For those interested in the combination of Bitcoin's strength and Ethereum's functionality, as well as the innovative strides Rootstock is making in the DeFi field, the AMA highlights serve as a gateway for further exploration. Explore Rootstock's vision for expanding Bitcoin's horizons in the DeFi ecosystem, as well as how it has the potential to reinvent economic freedom and accessibility globally.


Exploring Bitcoin Staking w/ Rootstock

[Stroom](https://stroom.network/) is pioneering Bitcoin staking services, harnessing the Lightning Network to provide Bitcoin holders with a new method to produce yields. Ross, who has a long background in Bitcoin and DeFi, founded Stroom, which is preparing for its mainnet launch with the goal of securely bridging the gap between Bitcoin and Ethereum. The service simplifies Bitcoin yields by reducing the difficulty of managing Lightning Network nodes for users, and it plans to integrate its STBTC into leading DeFi protocols.

As Stroom nears its mainnet debut, with a strong emphasis on security and community growth, it stands out in the DeFi scene by potentially expanding Bitcoin's utility into the DeFi space. For anyone interested in exploring the convergence of Bitcoin and DeFi via Stroom's unique platform, the AMA highlights provide a deeper dive into their vision and future developments:

**X Spaces**: [Exploring Bitcoin Staking with Stroom Network](https://twitter.com/i/spaces/1BRJjPydVXvKw/peek)

**Speakers**: 
- Rostyslav [Ross]: Co-Founder of Stroom ([X Profile](https://twitter.com/StroomNetwork))
- Viacheslav [Slava] ([X Profile](https://twitter.com/ViacheslavZhyg1)): CTO & Co-Founder of Stroom ([X Profile](https://twitter.com/StroomNetwork))

**Index**: 
1. Intros and Bitcoin Staking
2. Proof of Work vs Proof of Stake
3. Bitcoin Staking with Stroom
4. stBTC Utility and Potential
5. Mainnet Launch Timeline
6. Risk Management
7. Community Building and Updates
8. Upcoming Conferences and Engagement

# 1. Intros and Bitcoin Staking

- Ross was introduced as co-founder of Stroom and talked about his background in the Bitcoin ecosystem and DeFi, starting in 2016 with the Bitfury Group and later working at Lido Finance and Boosty:
>“My name is Ross and I'm the co-founder of Stroom so I'm behind the Stroom network account, so we we started our lucky path in crypto In 2016, when we joined a Bitfury group (...) technologies. Later I worked at Lido Finance, the first transaction was made by me because I was a product manager there and I needed to test the protocol before the announcement. And yeah, so after that I worked with Boosty.”

## 2. Proof of Work vs Proof of Stake

- Slava, CTO, explained the differences between proof of work, exemplified by Bitcoin, and proof of stake, used in newer blockchains like Ethereum:
> “Regarding the difference between proof of work and proof of stake, as you probably know, the Bitcoin blockchain was the first blockchain invented and it works on proof of work (...) something like proof of stake, where you like resources that you devote, it's not like burning energy. So it's... Because there are some environmental issues with that. So now in proof of stake, if you are a miner and you want to add a block, you need to provide some stake in the form of tokens locked for some period of time.”

- Proof of work involves solving computationally demanding puzzles, which secures the network but consumes large amounts of energy:
>“In order to add a block to the blockchain, you need to solve a problem. A computationally intense task”


## 3. Bitcoin Staking with Stroom

- Ross talked about how Stroom allows users to deposit Bitcoins and generate yields in BTC through Lightning Network, a layer-2 solution for Bitcoin.
>“User can deposit their Bitcoins and generate some yields in BTC. And in Bitcoin's ecosystem, it's possible only in Lightning Network in a decentralized way.”
- The service is complicated by the need for advanced algorithms for managing liquidity:
>“A beauty of this protocol because first of all, it is presently scalable and it because this layer two is not a blockchain is just like a P2P network of channels. And you can put some liquidity there, route transactions, collect some fees and like earn these yields based on your Bitcoin liquidity.”
- Stroom's system removes the technical burden of running a Lightning Network node for the user:
>“ So it's harder to run lighting network node. And in Stroom, we aim to provide people with the possibility to stake in the lighting network without all of that technical burden of running a lighting network node.”
- Users can deposit their Bitcoins and generate some yields in BTC, with the process resembling staking because you invest your Bitcoins to earn more:
>“So they just need to deposit bitcoins into our multi-sig vault and then the infrastructure providers will do the rest. And another advantage of using the Stroom is that's where actually liquid part comes in.”

## 4. stBTC Utility and Potential


- Slava emphasized the plan to integrate STBTC with Aave, Curve, and other DeFi leaders, and possibly with EigenLayer in the future:
> “We plan to integrate our BTC token into blue chip or DeFi protocols like Aave and Curve and all of that. Of course that will be available on DEXA for sure, but also we... So that's going to be by functionality very similar to WBTC (...) And we also would love to be integrated on EigenLayer layer.”
- Ross talked about the plan to create solutions for Bitcoin enthusiasts, aiming to integrate their wrapped token with Bitcoin layer-2 solutions, especially roll-ups:
> “We plan to integrate uh our liquid token to bitcoin L2s, especially to roll-ups yeah and we like started conversations with few of them so like we also have we will have like a solution for only Bitcoin Maxis”

## 5. Mainnet Launch Timeline

- Mainnet is expected to go live around summer or by the end of this year with the testnet already having begun a few weeks ago and attracted around 10k users:
> “We started our testnet a few weeks ago and currently we have around 10K testnet users. So yeah, we see a very good traction. (...) And speaking about the timeline of the mainnet launch, we plan to launch it 100% this year. But it will be around the end of this year. Second quarter or like in the third. So like somewhere around summer.”
- Work is focused on bug fixes, new features, and security checks before the mainnet launch:
> “ We are currently fixing a few bugs and also adding new features to our testnet.”
Risk Management

- Main risks acknowledged as technical, with emphasis on bridge security between Bitcoin and Ethereum:
> “The biggest risk for our project is a technical one that is related to running the bridge between Bitcoin and Ethereum. And actually, there are several bridge projects that are already operational.”
- The bridge's structure is based on the secure, simplified TBTC model from the Threshold Network, which Slava believes is the most secure Bitcoin bridge on the market:
>“TBTC, in my opinion, is the most secure bridge from Bitcoin to Ethereum. It's very simple, it's not like a wormhole or some complex bridge. It's super simple, it's just for moving bitcoins from the Bitcoin blockchain to Ethereum,”
- Security checks are planned to detect bugs and improve project security:
>“We will do a lot of audits to make sure that we don't have any bugs in our software. So we really try to maximize the security of the project because in our opinion, all infrastructure projects, need to prioritize security first,”

## 6. Community Building and Updates

- Shifting emphasis to community growth, which includes cooperating with various ambassadors and groups interested in Bitcoin technologies:
>“So we are also open to working with different ambassadors and any communities who are interested in Bitcoin technologies and can help us to find early adopters in the future. And in parallel, we are working hard on our mainnet solution.”
- Partnerships with validators for the bridge are being arranged and will be shared publicly soon:
>“We plan to make the update in the coming weeks and add validators to our bridge. So we also signed a few very good validators and we will announce this partnership soon.”

## 7. Upcoming Conferences and Engagement

- Stroom representatives visited the large Lightning Network conference in Tuscany and plan to attend Paris Blockchain Week and other major European conferences, with the possibility of going to some in Asia too:
>“And we also plan to visit Paris Blockchain Week. And like I plan to be on the most of. big conferences in Europe, but also maybe we'll visit a few ones in Asia as well.”
- They encourage followers to track their progress on Twitter for updates on Bitcoin staking and Stroom's work:
> “Listeners, please follow our Twitter and we will keep you updated with our progress. And yes, you can find all the news about Bitcoin staking and especially about Stroom.”




As Stroom nears its mainnet debut, with a strong emphasis on security and community growth, it stands out in the DeFi scene by potentially expanding Bitcoin's utility into the DeFi space. For anyone interested in exploring the convergence of Bitcoin and DeFi via Stroom's unique platform, the AMA highlights provide a deeper dive into their vision and future developments

Exploring Bitcoin Staking w/ Stroom

EigenLayer, a novel protocol built on Ethereum, has revolutionized the DeFi sector and furthered blockchain security practices with the introduction of restaking.

The restaking mechanism allows for the reuse of ETH, including liquid staking tokens (LSTs), by enabling users to opt-in to EigenLayer smart contracts. By restaking their ETH or LSTs, users can extend security to additional applications on the network, such as oracles and bridges, while earning additional rewards.

In this blog post, we will be reviewing all the different components that makeup EigenLayer and how this unique protocol has contributed to the evolution of the blockchain industry.

##The Role of Actively Validated Services (AVSs)

At the heart of EigenLayer’s innovative framework lies the Actively Validated Services (AVSs) concept, which brings enhanced stability, security, and the facilitation of innovative solutions within the blockchain space. 

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_a01e566ea6.png)
_[1] - EigenLayer Framework ([Source](https://docs.eigenlayer.xyz/eigenlayer/overview))_

AVSs are a set of smart contracts specifically designed to fortify the security and reliability of various blockchain solutions, including bridges, oracles, sidechains, and Layer 2 protocols, by leveraging the robust security framework of the Ethereum network. 

What distinguishes AVS within the EigenLayer framework is its reliance on Ethereum's native currency, ETH, and LSTs. Participants in the AVS ecosystem are incentivized to maintain the network's security by staking ETH or ETH LSTs, creating a strong deterrent against malicious actions. 

Should anyone attempt to compromise the system, they would not only risk the substantial financial investment represented by their staked assets but also face the possibility of having those assets slashed.

## Operators: The Backbone of EigenLayer’s Ecosystem

Operators are responsible for the verification and validation of transactions. Their efforts are instrumental in upholding the integrity of the platform, making them indispensable to EigenLayer’s framework.

Restakers can allocate their stakes under the oversight of operators, subsequently bolstering different services running on EigenLayer. Interestingly, operators can also assume the role of restakers, highlighting the flexibility and non-exclusivity of these positions. 

The interaction between operators, users, and restakers forms a symbiotic relationship that is essential for the ecosystem’s health. However, operators face their share of technical, economic, and regulatory challenges, including the need to maintain high-performance levels to support the network's stability and security. 

These challenges underscore the importance of a robust and efficient operator network within EigenLayer.

## Synergy between Restakers, Operators, and AVSs

The collaborative dynamics between restakers, operators, and AVSs form the cornerstone of a secure and efficient ecosystem within EigenLayer. 

This tripartite synergy ensures that the platform remains resilient against threats while fostering an environment ripe for innovation and growth, paving the way for the development of new applications and services.

## The Impact of Eigenlayer on Ethereum

EigenLayer’s introduction into the Ethereum landscape marks a significant milestone in the evolution of blockchain technology. 

By enhancing Ethereum’s capabilities, EigenLayer facilitates the emergence of new applications, thereby broadening the horizon for what is achievable on the Ethereum platform. This expansion not only benefits developers and users alike but also contributes to the overall maturation of the blockchain ecosystem.

![unnamed.png](https://strapi-stakingcircle.s3.us-west-1.amazonaws.com/unnamed_a7b6a70c32.png)
_[2] - EigenLayer Architecture Overview ([Source](https://docs.eigenlayer.exchange/))_

## Future Developments within EigenLayer

EigenLayer is poised for further developments that promise to solidify its position as a key enabler of innovation within the Ethereum space. 


_[3] - EigenLayer TVL growth in 2024 ([Source](https://defillama.com/protocol/eigenlayer?activeAddresses=false))_

The protocol recently [announced a roadmap](https://www.blog.eigenlayer.xyz/eigenlayer-mainnet-preparation-for-launch/) for the release of its mainnet. The launch will occur in six different stages over the coming weeks. Additionally, the team is working on several resources and tools for developers that will enable the seamless building and deployment of AVSs.

As EigenLayer continues to broaden its value proposition, with the integration of the new services and the final launch of its mainnent, we should witness a new wave of investors join the restaking space and collectively contribute to blockchain integrity and innovation.



In this blog post, we will be reviewing all the different components that makeup EigenLayer and how this unique protocol has contributed to the evolution of the blockchain industry.


Exploring EigenLayer: A Deep Dive into AVSs and Operator Dynamics

[Blockless](https://blockless.network/) is ready to reinvent the blockchain industry with its groundbreaking modular application framework, which allows developers to choose the consensus algorithms and verification tools that are best suited to their individual workflows. With a strong emphasis on simplifying both user and operator experiences, Blockless is preparing for its testnet launch, targeting a diverse range of potential operators to assure network growth. 

The latest AMA session shed insight on Blockless' novel approach to decentralized applications, which prioritizes developer autonomy and operational ease. Explore the core of Blockless's vision to transform the blockchain ecosystem, making it more accessible and efficient for all:

- **X Spaces**: [AVS Deep Dive with Blockless](https://twitter.com/stakingcircle/status/1772669850432811494)
- **YouTube**: [AVS Deep Dive with Blockless](https://www.youtube.com/watch?v=tDcRCtAcbik)
- **Spotify**: [AVS Deep Dive with Blockless](https://open.spotify.com/episode/22tT0O3B6fcwlKU40tEw4x?si=TPf1-_BHSuKSB4gOks_iaw)

**Speakers**: 
- Alan ([X Profile](https://twitter.com/autosudden)): CMO @ Blockless ([X Profile](https://twitter.com/theblockless))
- Liam Zhang ([X Profile](https://twitter.com/FDRosera)): Engineering and Design @ Blockless ([X Profile](https://twitter.com/theblockless))

**Index**: 
1. Blockless Framework
2. Blockless vs Other AVSs
3. Product and Performance Targets
4. Connection to EigenLayer
5. Modular Network Nodes
6. Fault Tolerance and Security
7. Distributed Orchestration
8. Blockless Technology and Adoption
9. User and Operator Focus
10. Technical Capabilities and Developer Experience


## 1. Blockless Framework

- Blockless is the first modular application framework and network, offering what Celestia did for blockchain networks by breaking down applications into individual workloads:
> “So Blockless is the first modular application framework and network doing for applications what Celestia did for blockchain networks. (...)  What we do is break the application layer down into individual workloads. So instead of processing an application as a whole, you break down those individual workloads”
- It enables users to power applications by selecting the best-suited node group or operator set for specific workloads, thus creating fully distributed, decentralized off-chain networks:
> “And you're then able to actually enable users themselves to power the applications that they use, kind of creating fully distributed, decentralized off-chain networks that use the best-suited nodes for each individual workload”

## 2. Blockless vs Other AVSs

- Blockless stands out as the first modular application framework that provides different consensus and verification tools for distinct workloads:
> “It is the first modular application framework. So for us, we see ourselves as quite different because we enable those different consensus and verification tools for different workloads. We enable people to... power applications by using them.”
- It focuses on empowering users and developers by allowing them to power applications they use and make choices about the rule sets and resources used for their workloads:
> “The idea is that when you break an application down into its workloads, you liberate the developer and the users from having to adhere to one set of rules on one network. And so ultimately, what that means is that the application becomes network neutral”

## 3. Product and Performance Targets

- Blockless is nearing readiness for its testnet launch, which is expected in the next 6-8 weeks, with the mainnet launch anticipated to follow soon after:
> ”And so we are planning on launching a testnet very soon. um you can expect that um kind of in the next six to eight weeks and then also a mainnet um shortly after”
- The focus is on expanding their potential operator pool, targeting every consumer desktop device:
> ”Our main focus right now is really on expanding and growing our potential operator pool. And for us, our potential operator pool equates to every consumer desktop device out there.”
- The intent is to release performance metrics around the time of the testnet launch rather than engaging in theoretical performance claims:
> “ In terms of the performance metrics and what we're what our goals are I think we're going to be releasing some more information around that when it comes to the uh launch of the testnet” 

## 4. Connection to EigenLayer

- Blockless’s connection to EigenLayer is framed as a means of securing their network to enable mainstream adoption, with the relationship being viewed as dual-faceted:
> “ For a lot of crypto native people, what EigenLayer is doing, they are quite familiar with. um but actually when it comes to mainstream adoption I think it's somewhat you know mainstream adoption doesn't occur um in a vacuum”
- EigenLayer provides the possibility for security while Blockless commits to simplicity, allowing users to make choices about Ethereum security:
> “ I think that the relationship to mainstream adoption is a dual one i think that ultimately you know Eigen layer and restaking is somewhat complicated for your average person. However, you know, the idea of powering an application by using it is very simple”

## 5. Modular Network Nodes

- Blockless uses both its own network nodes and nodes from EigenLayer to provide diversity and robust support for applications:
> “ It's really important to have the optionality there as well as the diversity for both the application developers, but also the end users when it comes to rock time.”
- Developers can choose off-chain processing or EigenLayer support based on their workload specifics, offering choices:
> “People who want specific workloads on an off-chain through off-chain computation, and some people will want to use EigenLayer for other particular workloads. So it's ultimately, yes, it's all about providing the optionality”

## 6. Fault Tolerance and Security

- Blockless uses secure runtime with automatic failover for nodes that go offline, with additional nodes on standby for backup support:
> “So ultimately we use a secure runtime and so the fault tolerance is pretty much we have an automatic failover. And so what that means is if any node goes offline when we run the initial check of who is online, a roll call, so to speak”
- Their system is viewed as secure by significant figures in the EigenLayer ecosystem after thorough strategy talks:
> “And in the discussions that we've had with some of the big players in the EigenLayer ecosystem, especially around things like the security strategy and how safe an AVS is, they're pretty happy with us.”

## 7. Distributed Orchestration

- Blockless utilizes dynamic resource matching to optimize node selection, taking into account factors like geolocation and historic performance:
> “It doesn't make sense if we're not looking at things like the geolocation of those operators. How far are they coming from the initial request and how far are they from the endpoint? How do we reduce latency?”
- It orchestrates efficient matching of workloads to nodes, benefiting users and application developers by offering choices between different verification tools and consensus algorithms per workload:
> “So our orchestration is key. And when it comes as well to, you know, how these things are secured and the verification tools that we use or the consensus algorithms, this is also, you know, a key part of benefiting the retail users, but also the developers themselves. It's... primarily about ensuring that developers have the choice for each workload.”

## 8. Blockless Technology and Adoption

- Alan talked about AI networks using Blockless tech for inference. Additionally, mentioned the progress that has been made in both the Deepin and GameFi space:
> “ We're already working with some AI networks that are leveraging Blockless and our technology for inference. We also have some other progress on both Deepin and the GameFi space.”
- The importance of showing how easy it will be to run a Blockless node and how intuitive it is for network-neutral apps to use their users' compute resources was explained:
> “What's key is to promote the widespread adoption is ultimately explaining to people how simple it is going to be to run a node and how intuitive it is for network neutral applications to leverage their own users' compute resource.”
- Exciting partnerships to be announced soon, but details are kept under wraps pre-testnet and pre-mainnet:
> “So we have some very exciting partnerships uh that we'll be announcing soon but yeah we're keeping our lips tightly sealed pre-testnet and pre-mainnet but yeah we'll we'll be announcing some fun things soon “

## 9.  User and Operator Focus

- Alan stated they are prioritizing operator needs before bringing in applications because having no operators would be a big mistake:
> “Adoption for us what's key is we're prioritizing the operator side first because if you prioritize getting all of the applications onboarded and there aren't any operators then it's a big oopsie”
- They need many people running nodes because it is effortless, which sets high goals for operator adoption on their network:
> “For us, the metric really that we're looking at is, well, if it's so easy to run a node, then everyone should be running a node. So we have some pretty significant standards to meet when it comes to how many people will be running nodes on our network.”

## 10. Technical Capabilities and Developer Experience

- Liam mentioned that Wasm and Wasi allow running diverse programming languages in a web browser without needing different translators:	
> “It's a very small form factor runtime built tailored for the web browser. So it is designed to be running within the web browser. And... If anyone doesn't know about this, you have to download a specific kind of software or translator”
- Work is ongoing to integrate JavaScript and Node.js support using technical methods, even though native Wasm doesn't support them yet:
> “For example, native wasm doesn't support JavaScript, but using some tricks under the hood and with the help of our very talented engineering team, we're able to. allow people to use vanilla JavaScript and Node.js for development.”



The latest AMA session shed insight on Blockless' novel approach to decentralized applications, which prioritizes developer autonomy and operational ease. Explore the core of Blockless's vision to transform the blockchain ecosystem, making it more accessible and efficient for all

AVS Deep Dive w/ Blockless

[Drosera](https://www.drosera.io/) is at the forefront of security in the Defi Space, having introduced a marketplace for security infrastructure that enables protocols to proactively resist threats via consensus-triggered actions. Drosera, which works closely with the EigenLayer ecosystem, intends to strengthen the foundation of AVS security, as demonstrated at our most recent AMA session. 

This AMA included information about Drosera's novel security automation, development progress, and strategic significance within and beyond the EigenLayer ecosystem. As Drosera works to revolutionize blockchain security, the AMA highlights are must-reads for anybody interested in the intersection between cybersecurity and Defi:

**X Spaces**: [Exploring AVSs with Drosera](https://twitter.com/stakingcircle/status/1770827755048820945)
**Spotify**: [Exploring AVSs with Drosera](https://open.spotify.com/episode/7FxVUmEboYNStxsD4gNbKu)

**Speakers**: 

- **Samuel Glenn** [Boba] ([X Profile](https://twitter.com/Bobafetador)): Co-Founder and CTO of Drosera ([X Profile](https://twitter.com/DroseraNetwork))
- **Fernando Reyes Jr.** [FDR] ([X Profile](https://twitter.com/FDRosera)): Co-Founder and CEO of Drosera ([X Profile](https://twitter.com/DroseraNetwork))

**Index**: 
1. Drosera Overview
2. Protocol Functionality and Use Cases
3. Drosera’s Contribution to EigenLayer Ecosystem
4. Future Applications and Impact
5. AVS Decentralization and Security
6. Development and Performance
7. Developer Experience and Integration
8. Go-to-Market Strategy and Partnerships
9. EigenLayer Collaboration and Stability
10. Risks and Alternative Mechanisms
11. Final Remarks and Community Engagement
 
## 1. Drosera Overview

- Drosera is a security automation protocol offering a marketplace for security infrastructure to delegate to decentralized node operators:
>**Boba** - “Drosera is essentially this security automation protocol. And this is essentially a marketplace of sorts where protocols create their security infrastructure as smart contract code. And they put it on this security marketplace to delegate to a decentralized set of node operators.”
- It lets protocols define emergency conditions and responses, carried out by nodes through consensus when needed:
>**Boba** - “And when there's an emergency condition that's triggered, then this set of nodes, they basically come to consensus on whether this event occurred. And then they perform an emergency response.”
- Drosera is seen as proactive 'armor' against security threats, designed to work with existing measures while providing accessible, scalable solutions:
>**FDR** - “It is a reality that these bigger top 10 groups can shell out money to build these systems or create these things themselves. But why even do that if what Drosera delivers is, quite frankly, the armor, right? It's that dynamic 24-7 piece that complements those other facets”

## 2. Protocol Functionality and Use Cases

- An example of the protocol's application: Acts in response to an event like USDC de-peg by doing pre-defined emergency actions, such as switching assets to something more stable or swapping into USDC as a riskier move:
>**Boba** - “Maybe you're doing something with treasury management and you see USDC de-peg by like 30% in like over a period of like two blocks or three blocks. And maybe your emergency action is, oh, this thing is de-pegging, like we need to swap. assets to something that's more stable”
- Drosera enables protocol developers in the EVM ecosystem to create 'traps', which are smart contracts containing emergency logic:
>**Boba** - “Like, because it's an automation protocol, this means that it's essentially like this sandbox, where any protocol developer, anyone that knows how to use Solidity or smart contract code, Can use this kind of Drosera toolkit to make what we are calling traps. And these traps are just contracts with emergency conditions and emergency response logic”
- The protocol can work with any on-chain feature, responding based on set conditions, and adaptable to various DeFi applications:
>**Boba** - “You can see how you can set up different types of traps. And the use cases range from Querying Oracle data, querying on-chain DEX data, looking at something as simple as perhaps you're like a DAO or maybe you're doing something with treasury management”


## 3. Drosera’s Contribution to EigenLayer Ecosystem

- As part of the EigenLayer ecosystem, Drosera plans to become the foundation security layer for AVSs (Autonomous Validation Systems) and restaking by offering key security services:
>**FDR** - “Where as the core security service for EigenLayer. We are essentially securing this application layer and then we're on this, you know, the fact that Eigenlayers is covering this crypto-economic security layer”
- FDR talked about the support from the EigenLayer team and the aim to create the top Web3 security product on EigenLayer:
>**FDR** - “There was actually this funny conversation that I had with Sriram. Many moons ago was giving us a lot of strong advice and helping us a lot. And I asked him, I said, man, you're so helpful. What's the best way that I could like... You know, repay you he's like, I want you to make the best security product in Web3 on EigenLayer, right? And it's like, that's been our mission from the start”
- Drosera actively works with other AVSs in the ecosystem, sharing research and promoting community growth:
>**FDR** - “There are ways that we can start to work together at a social community level and really start to grow and even pool, right, some of the research that we're doing of how XAVS interacts with YAVS, right, and start to get that information out to the community”

## 4. Future Applications and Impact

- Beyond EigenLayer, Drosera's flexible technology could be used for lending platforms, layer twos, oracles, governance systems, IoT devices, and other blockchain protocols or DApps:
> **FDR** - “We've actually put together quite a lengthy protocol research and use case documents, kind of explore everything from lending platforms, layer twos, oracles, governance mechanisms, etc. Even stuff like IoT devices”

## 5. AVS Decentralization and Security

- FDR described Drosera’s method of security using traps and the idea of staking to run them. They talked about the ultimate vision for Drosera as being like Uniswap for cybersecurity, where protocols invest their "military defense budgets." Traps allow protocols and users to stake, getting the community involved in security:
>**FDR** - “I think Drosera has the capability to become what is effectively the Uniswap for cybersecurity, because you'll have all of these protocols with what is effectively their... military defense budgets”
- The traps are made to give operators staking rewards instead of subscription fees. Operators can run multiple traps, and their reward potential is based on how much they choose to manage. The community can also help with security by staking money:
>**FDR** - “The way that those traps are deployed, how they continue running, how operators continue to see interest in them is that the protocol or the project or the user is not necessarily paying some. You know, outdated SAS model subscription fee, they're essentially putting stake into that trap”

## 6. Development and Performance

- Boba said that Drosera is currently running on DevNet, testing on local machines, and that they are on the path to reaching the testnet phase:
>**Boba** - “Right now we're in DevNet. So we're essentially like running the Drosera operators locally on our machines. And then spinning up a local blockchain with our contracts deployed and then testing different traps.”
- No significant development issues are seen; the focus is on benchmarking the system to get ready for the testnet and achieving an MVP for mainnet to actively provide risk management:
>**Boba** - “I don't really foresee that we have any very major obstacles from an ecosystem perspective at this point. It just really comes down to making sure that we get this MVP out so that people can start playing with it at testnet phase and getting it to mainnet phase”

## 7. Developer Experience and Integration

- Boba stressed Drosera’s strong focus on developer experience with smart contract code and CLI tools making integration smooth:
>**Boba** - “Like a really big focus is actually the developer experience and even just the experience of people deploying protocols in general or even playing with the technology. It's just smart contract code. It's essentially just smart contract code and a CLI that we have”
- Highlighted that Drosera aligns with the DeFi and Ethereum community ethos, using common tools (Foundry, Forge, Hardhat) for testing. Developers can integrate Drosera using their existing workflow:
>**Boba** - “So in terms of like how easy is it to play with the trap, to test with a trap, it's as simple as using existing Solidity testing infrastructure that... Like 99% of Solidity devs, protocol devs are already using, which is like Foundry, Forge, Hardhat.”

## 8. Go-to-Market Strategy and Partnerships

- FDR hinted at upcoming partnership announcements related to events like Dubai and Token 2049:
>**FDR** - “So we have a lot of announcements that we're going to be working on over the next probably few days to few weeks leading up to Dubai and Token 2049”
- The reception in the operator space for Drosera has been ranked high by FDR, due to manageable risks for operators and the chances of better rewards for service:
>**FDR** - “They're providing that service is like, what's the risk to me from a slashing perspective? And then what is the reward potential for me? Right when these traps are getting deployed and on the reward side, it's like. You effectively can take and participate in as many traps a you would like”

## 9. EigenLayer Collaboration and Stability

- Boba talked about the restaking mechanism on EigenLayer, saying that stakers delegate to operators, which helps Drosera’s security. This crypto-economic security supports Drosera's growth:
>**Boba** - “For the restaking side, I think it's as easy as like, you would have, you'd essentially have like stakers delegating stake to the operators. And then those operators collectively would have a certain amount of shared security that they're providing for running a particular trap.”
- A thriving risk-taking ecosystem, as Boba described, would give Drosera growth chances by forming partnerships and creating a self-supporting loop of growth and value accrual:
>**Boba** - “And obviously, the more that Eigen layer in the restaking ecosystem grows, it becomes more opportunities for Drosera to grow. So it's, I think, a very meaningful, you know, it's a very meaningful loop, where we can all kind of accrue value“

## 10. Risks and Alternative Mechanisms

- Boba acknowledged the inherent risks in all systems and stressed using a variety of security methods to avoid centralizing risk, including working with multiple LSTs, LRTs, oracles, and bridges:
>**Boba** - “So I think as far as that goes for like the crypto economic security side, that means like leveraging multiple. Different LSTs, leveraging multiple different LRTs, working with multiple oracles, working with multiple bridges”

- Boba mentioned that alternatives to EigenLayer such as bonding and reputation systems have been thought of but not followed up on:
>**Boba** - “We have thought about other ways to do bonding mechanisms. And there are other types of mechanisms that we can build into the system, like reputation systems”

## 11. Final Remarks and Community Engagement

- FDR encouraged community sign-ups for the soon-to-start early supporters' reward program and invited security fans interested in becoming "trappers" to DM them directly for a new specialization in DeFi security:
>**FDR** - “We are going to be putting out our early supporters reward program sign up here pretty soon on the website. So stay tuned for that (...) We're really keen to start having folks who are interested in being what we're calling trappers, right? This new classification and specialization in DeFi security”







This AMA included information about Drosera's novel security automation, development progress, and strategic significance within and beyond the EigenLayer ecosystem. As Drosera works to revolutionize blockchain security, the AMA highlights are must-reads for anybody interested in the intersection between cybersecurity and Defi

Exploring AVSs w/ Drosera

[YieldNest](https://www.yieldnest.finance/) is leading the way in Defi with its Liquid Restaking Protocol and ambitious plans to incorporate AI and IoT, aiming for unparalleled interoperability across blockchain tech. The latest AMA provided a complete overview of YieldNest’s activities, from its relationship with LAMA risk for AVS risk analysis to its open appeal for partnership in AVS development. 

For enthusiasts and specialists interested in learning more about YielfNest’s strategy and its implications for the future of Defi, the full highlights and transcripts below provide a treasure trove of information. Join us as we decipher the complex discussion defining the next wave in the Defi space:

X Spaces: [AVS from the Perspective of a Liquid Restaking Protocol](https://twitter.com/stakingcircle/status/1768283698292474319)
YouTube: [AVS from the Perspective of a Liquid Restaking Protocol](https://www.youtube.com/watch?v=p1yNmSJ9yA0)
Spotify: [AVS from the Perspective of a Liquid Restaking Protocol](https://open.spotify.com/episode/2YhAuNpoGdo8P8olBwHmQc?si=Cy1G5HJ7TO-ZkL0Uft9cIQ&nd=1&dlsi=5d0bc8cbf02f47d3)

Speakers: 

- **Amadeo Brands** ([X Profile](https://twitter.com/amadeobrands)): Co-Founder and CEO of YieldNest ([X Profile](https://twitter.com/YieldNestFi))

**Index**:

1. AVS Introduction
2. YieldNest Fi Overview
3. AVS Potential and Challenges
4. AVS Migration and Solutions
5. AVS Calibration with Liquid Restaking
6. AVS Evolution and Future Trends
7. Blockchain Technology and AVS Development
8. Isolated LRTs and Node Operators
9. Integration and Application of AVSs
10. AVS Growth and Risk Analysis
11. Collaboration and Innovation

## 1. YieldNest Fi Overview

- DeoBrands provided a short overview of YieldNest as a Liquid Staking Protocol: 


>“So YieldNest is a liquid restaking protocol and we are basically developing liquid restaking and in the staking space already for quite some time now. (...) we're building a kind of a liquid restaking protocol with the eyes and the vision of the future of what liquid restaking is and what restaking is going to become”
- An increase in liquid restaking interest was noted due to the introduction of Actively Validated Services (AVSs):
> "And I'm very excited about liquid restaking and very excited about active validated services because I think this is a new DeFi primitive that is going to carry the new cycle, the new bull cycle forward. And I believe that AVS and restaking going to issue in real-world use cases for blockchains"
- Noted the completion of a seed funding round for YieldNest and the onboarding of new advisors from Yearn and Curve:
>“We're closing our seed round at the moment. We are onboarding a lot of new advisors from Yearn and Curve. We have a lot of really cool angels on board, which I'm not going to tease yet”

## 2. AVS Potential and Challenges

- AVS is positioned to enhance security across multiple chains and extend Ethereum's security model off-chain:
> “Now we can use this layer one security, which is kind of expensive, but we can use the layer one security, set the economic assets there, and then use that economic security for off-chain purposes.”
- Challenges include clarifying custom slashing conditions and ascertaining required security amounts for AVS:
>“But how does an AVS define exactly the certain slashing conditions and how does an AVS get the amount of nodes that it's needed and the amount of economic security? I think there are still a lot of question marks and unclarity around that and EigenLayer will release more info about that soon”

## 3. AVS Migration and Solutions

- YieldNest is actively partnering with various AVSs and looking for more collaborations:
> “There's a lot of AI protocols that probably will use these active validated services in their technology stack. And we're actively looking at building out categories, as I said. In my vision, there's not going to be just 10 or 20 AVSs. I think there's going to be hundreds or thousands or hundreds of thousands of active validated services in the future.”
- DeoBrands is actively tracking AVS projects like AltLayer, Dorsa, ExpressOS, SpiceAI, and considering Fetch AI for their AI use cases:
>“We're looking at, you know, Dorsa, we're looking at Outlayer, we're looking at Expressor system. I'm still trying to contact Spice AI, which I really like their use cases. And I think that's a good thing. I think Spice AI is very interesting, Witness Chain, Fetch AI.”
- The importance of properly categorizing AVSs to inform risk parameters and slashing conditions was stressed with speculation on potentially thousands of AVSs:
>“But right now, our challenge is like Trying to onboard all of them and building partnerships with all of them and then also categorizing them in the right way so that we have clear risk parameters with all these active validated services and all-around all their slashing conditions”

## 4. AVS Calibration with Liquid Restaking

- Liquid restaking protocols find technical ease in integrating with an AVS:
> “So basically for a liquid restaking or even a retail restaker, it's just about picking the right node, right? So like as a restaker, you don't really pick the AVSs. That's the task of the node operator. So you kind of delegate your restaked capital to a node and the node will then select one or multiple.”
- YieldNest is developing proprietary tools to monitor and curate AVSs for alignment with their vision of future yields in ETH:
>“We are building our own proprietary tooling to actually monitor certain nodes and certain AVSs and whitelist them so that we can actually see if a node actually runs the AVS that we want them to run and if a node is not running other AVSs.”

## 5. AVS Evolution and Future Trends

- DeoBrands predicts that initial AVS advancements would be mostly blockchain-related, with future expansion into AI and IoT:
> “So Things like that are coming and then coming back to the AI again, I think when that gets more attention and more knowledge about like, oh, I can run a large language model and I can kind of validate this with an economic layer around that, then I think a lot of people will.”
- It was agreed that practical integration with AI, IoT, and AVSs would foster interoperability and blockchain ground-based infrastructure:
> “Because we've been drumming this AI IoT blockchain thing for a long time. Yeah. There's so much money invested in a lot of vaporware, but I do think that this might finally be the approach that would make more sense. But we still have to see what the full implementation will look like, but it looks promising. “

## 6. Blockchain Technology and AVS Development

- DeoBrands mentioned that blockchain's open-source nature is about education and advancing technology, not just about liquid restaking tokens but the new DeFi primitive:
>“So the nice thing in blockchain and this open source kind of in the open development that we're doing, it's all just about, you know, educating and trying to move forward this technology, this open technology stack, right? And so it's not only going to be the liquid restaking tokens or things like that, it's just the overall new DeFi primitive”
- According to DeoBrands, AVSs could make the creation of better Oracle systems, like Chainlink, easier by allowing quick out-of-the-box network construction:
>“But through AVSs, we can actually build much better Oracle systems, for example, like Chainlink, where in Chainlink they have this whole validator setup and then they validate. They had certain data points. Well, with an AVS, you can actually build that whole network out of the box very quickly.”
- AVSs are said to reduce innovation complexity, aiding future blockchain and decentralized systems development, and DeoBrands highlighted that with EigenLayer and Restake, progress in AVSs becomes easier, faster, and more open:
>“So I think the future of AVSs will be... Well, speed up the future development of blockchain technology and decentralized systems in general, because AVS has kind of removed the complexity to innovate.”

## 7.  Isolated LRTs and Node Operators

- DeoBrands compared isolated LRTs and isolated NLRTs, explaining that NLRTs accept natively restaked assets:
>“So I think isolated, there's the isolated LRT or isolated NLRT. Well, an NLRT is definitely isolated because it only accepts natively restaked ETH. And then an isolated LRT is basically like, okay, we're isolating a liquid restaking token where we just kind of pick different nodes”
- Emphasized the need to build a knowledge base with clear definitions and categorization of AVSs:
>“And I think we need to make some sort of like agenda or like some sort of a knowledge base where we really form this definition because there's also the thing about which nobody really talks about”
- Highlighted that isolating specific node operators is just as important as isolating economic assets because you don’t want to run all AVSs, especially as the variety grows:
> “I think that's even more important than isolating the economic assets that you mistake, it's also very important to isolate. Which AVSs are we going to run? Because you don't want to run all AVSs. In the beginning, it's probably pretty straightforward, but in the future, when there is, let's say, thousands of AVSs, you don't want to run all AVSs”

## 8.  Integration and Application of AVSs

- DeoBrands mentioned that while they're not focusing on any one specific AVS, they're broadly speaking with various AVSs and described interest in AVSs that perform parameter research for different liquidity pools:
>“I think probably one of the first we need ourselves is something that does parameter research for the different liquidity pools that different LRTs will use. That's something we're looking into right now”
- Also expressed particular interest in AI and shared sequencing as applications for AVSs:
>“As I already said, like AI is kind of probably something that I'm extra interested in because I think that's a good use case and yeah, shared sequencing or any innovative use case of AVSS like, you know, Dorsa I like a lot. It's very interesting.”

## 9.  AVS Growth and Risk Analysis

- DeoBrands expects exponential growth in the number of AVSs, naming early players like EigenDA and AltLayer, who are far ahead:

>“I think it's going to be EigenDA and then AltLayer and then Dorsa and then SpiceAI and it's going to be a handful in the beginning and then it's going to exponentially grow with a lot of new different angles and new different ideas that will explode on this new tech stack. “
- They announced a partnership with the LAMA Risk team to create a publicly accessible risk analysis framework associated with AVSs and restaking:
>“We're forming an independent partnership with the LAMA Risk team, which I also contributed to in the past. And the LAMA Risk team does a lot of risk analysis for Curve Finance and for Prisma Finance, and also other overall risk research.”

## 10.  Collaboration and Innovation

- DeoBrands emphasized YieldNestfi's commitment to supporting innovative research and acting as stewards of the open innovation platform:

> “We're building out risk frameworks and we're categorizing and researching very deeply into all the different angles and different possibilities that AVS will have in the future. So we're mapping that all out right now(...)If you have questions about how to go to market and how to get capital, how to get nodes to work with them, well, we can help them with that.”





For enthusiasts and specialists interested in learning more about YielfNest’s strategy and its implications for the future of Defi, the full highlights and transcripts below provide a treasure trove of information. Join us as we decipher the complex discussion defining the next wave in the Defi space

Exploring AVSs w/ YieldNest

Brevis, emerging as a beacon of innovation in the blockchain space, introduces its “Smart ZK Coprocessor”, which represents a significant step forward for Defi and Web3. In a rapidly evolving ecosystem, this development provides a mechanism for smart contracts to seamlessly interact with and calculate historical on-chain data across any blockchain, without relying on trust assumptions. 

The latest AMA provided a forum for the minds behind Brevis and their collaboration with EigenLayer to discuss how this technology not only improves blockchain security but also broadens the scope for developer adoption and data-driven applications. 

For those interested in delving into the details and discussions, below are the highlights of the AMA: 

**Links**:

X Spaces: [AVS Deep Dive with Brevis](https://twitter.com/stakingcircle/status/1767566462212772131)
YouTube: [AVS Deep Dive with Brevis](https://www.youtube.com/watch?v=8I4sTCNaLeI)
Spotify: [AVS Deep Deive with Brevis](https://open.spotify.com/episode/6BOcQ7MSmNkjrjxoXBZxni?si=S_c5XDLMSNCO0HWJSFilkg)

**Speakers**: 

- Yoli ([X Profile](https://twitter.com/YueLi_Yoli)) - Brevis ([X Profile](https://twitter.com/brevis_zk))

**Index**:

1. Introduction of Brevis - Smart ZK Coprocessor
2. Brevis' Role and Solutions
3. Simplifying Brevis’ Concept
4. Brevis and EigenLayer Partnership Potential
5. Developer Experience and Adoption
6. Upcoming Partnerships and Initiatives
7. Brevis’ User Base
8. Goals for Brevis in 2024

## Introduction of Brevis - Smart ZK Coprocessor

- Brevis uses zero-knowledge proof to enable data-rich use cases in blockchain. Additionally, it Can read states, transactions, and receipts from any timeframe:

>_“Burbis is a smart ZK coprocessor that can utilize the full on-chain data and run the computations without any additional trust assumptions. Burbis can trustlessly read the states, the transactions, and the receipts of any time frame. It can run the computation on data of any size. Also, Brevis can verify the zero-knowledge proof on any blockchain. It can empower the data-rich use cases, including the data-driven Defi, the ZK Bridges, the ZK DID, and other fancy features built on based on Blockchain Data.”_

## Brevis’ Role and Solution

- Brevis addresses smart contract limitations in accessing historical on-chain data:

>_“So, one of the major challenges that Brevis can solve for the blockchain ecosystem is to allow smart contracts to access and compute data from any block and from any blockchain. This is because smart contracts deployed on a spinel blockchain are living in the context of the blockchain virtual machines, but can only access the data from other smart contracts that are made public via view functions”_

- Brevis allows smart contracts to compute data from any block and from any blockchain without trust assumptions. Yoli provided an example: VIP Trader programs for DEXs, which aren't possible without Brevis due to high costs:

>_“So in that case, the Web3 applications simply have no way to access the vast majority of the data stored in blockchains in a trust-free manner. But with Brevis, we can have this issue well solved. So that we can build various data-driven features for decentralized applications, such as the VIP Trader programs for DAXs”_

## Simplifying Brevis Concept

- Brevis aids data-driven DeFi, secure bridges, financial connections, and privacy features trustlessly:

> “So basically, Brevis is like, you’re building for data-driven Defi, you can build secure bridges, right? You create these like financial connections between, I guess, users and protocols. You also have privacy features I’m assuming. And then this is all trustless if I’m understanding correctly.”
>
> “Yeah, that is a correct understanding.”

- The VIP Trader fee discount for Uniswap v4 as an exhibit: calculates discounts based on the user's past month's transactions using zero-knowledge proof:

>“Maybe I can just give you an example that we just recently built the VIPTrader fee discount hook, which is also kind of the VIPTrader program together with Uniswap Foundation for the Uniswap v4. So we have been accessing and calculating the user's previous transaction data for the past month. Based on this data and the volume, and then we generate a zero-knowledge proof, and then it will be verified in the Uniswap v4 hook smart contracts. In that case, it would determine the user's WIP tier. Based on this tier, the hook smart contracts can just You know, just grant a kind of fee discount for this user and everything for what I mentioned just now is in the smart contract level. “

## Brevis and EigenLayer Partnership Potential

- Brevis, already ready for use, has developers integrating its technology:

> “Brevis is already production-ready. And in fact, that there's already a lot of developers and partners integrating Brevis into their protocols.”

- Partnering with EigenLayer enhances security for Brevis' cold chains, raising the quality of stakers:

>“Well, EigenLayer is one of our key partners and they're doing great. Well, also like EigenLayer restaking and also their expansion will contribute to the security in Brevis, especially the co-chain”

- This collaboration also raises Brevis' staker quality and overall security infrastructure, allowing Brevis' Co-Chain and developers using Brevis to share the same security standard as Ethereum:
>“But how can we ensure that most of the stakers or validators, you know, they don't have any kind of malicious behaviors? In that case, that we would like to have more like high-value stakers in our network, in our brevis co-chain. So by leveraging EigenLayer, we can have more security level for our co-chain, which means that it will ensure the correctness of our ZK co-processing results.”
>
>“The Brevis Co-Chain and also the developers who are using Brevis can share the same level of security of Ethereum. So this is very important to our whole infrastructure. So it will ensure or improve the security level for our Co-Chain. “

## Developer Experience and Adoption

- Brevis V2 allows developers to utilize Brevis for DApps in 3 steps without zero-knowledge experience, using high-level function writing:
>“So recently we have launched the other Brevis V2. With that, developers can just build their DApps using Brevis within three simple steps. The first is to identify and gather data required to run the business logic. The second step is just based on those data access specifications, developers can now build their application circuits to run the business logic. Once the verification is successful, the brevis contract can call the callback function to the application contract. And then it will handle the results. So that's it.”

- Efforts are on developing an SDK for easy use and high performance:
>“We have been Putting a lot of effort into the developments of our SDK to make it developer-friendly and high-performance and to developers who want to build the data-driven features using Brevis.”

## Upcoming Partnerships and Initiatives

- Yoli mentioned partnerships with significant DeFi protocols and new use cases to be announced soon:
> “So we're partnering with some of the biggest DeFi protocols today. To enable a new data-driven DeFi user experience. For instance, the YPTrader fee discount hook for Uniswap v4, as I mentioned, has already been launched and released. Also, Another new use case, which is about the ZKML-powered UX personalization infra, which is also with another well-known project.”

- Brevis aims to enable more data-driven features, overcoming current feature limitations in decentralized applications:
> “Just like I mentioned, there's a lot of very smart and data-driven features in centralized exchange, but it's quite missing in decentralized exchange. And for now, all of the features in the Decentralized Exchange or in DeFi are quite limited. So we're trying to work with our partners to make this happen. “

## Brevis’ User base

- Brevis primarily serves developers and builders, aiding them in creating protocols or gaming projects. The goal is for builders to incorporate intelligent, data-driven features with ease:
> “So actually we are building the infra. So we are mostly facing the developers and builders. That's why all of the big names that I just mentioned are the, you know, the projects, the DeFi projects, or the other project teams that are focusing on the infra. So basically we're... As I mentioned, facing developers and builders who are building different protocols or can be something like gaming projects also, because we can also support a kind of data-driven live ops features for gaming projects and also for others”

## Goals for Brevis in 2024

- Collaboration with partners like EigenLayer aims to make data-driven DeFi use cases widespread:
>“We're looking forward to working with more partners like EigenLayer, like the You know, the big DeFi projects. And we're just trying to build more and more data-driven use cases because we would like to make this more adopted and more well-known for the users and developers.”



The latest AMA provided a forum for the minds behind Brevis and their collaboration with EigenLayer to discuss how this technology not only improves blockchain security but also broadens the scope for developer adoption and data-driven applications. 


AVS Deep Dive w/ Brevis

During an insightful AMA, Shubbam from [Manta Network](https://manta.network/) highlighted the platform's innovations in blockchain and privacy, particularly its $2 billion success in DeFi Bonding Liquidity through Manta Pacific's layer 2 solution. Manta Network is leading the DeFi space by providing zero-knowledge proofs and strategically moving to layer two for scalability and lower gas costs.

The AMA also discussed upcoming campaigns to increase user engagement, incentives for stakers, and the multifaceted role of the $MANTA token. Manta Network's growth strategy involves luring partners and users with its "Blast Off" campaign, emphasizing security and effective staking. Explore the highlights to learn how Manta Network is changing the landscape of decentralized finance in the future:

X Spaces: [Deep Dive into L2 Chains with Manta Network](https://twitter.com/stakingcircle/status/1765724158732780015)

Speakers: 

- Shubbam ([X Profile](https://twitter.com/Shubhamb126)) - Head of Ecosystem at Manta Network ([X Profile](https://twitter.com/MantaNetwork))

Index:
1. Manta Network Overview
2. Layer Differences and Polkadot’s Role
3. Data availability and Gas Fees
4. Manta Token Utility
5. Staking Mechanisms on Manta Network
6. Incentives and Rewards for Stakers
7. Re-staking Process
8. Security and Risk Mitigation for Staking
9. Manta Network Layered Front-end
10. Manta Network Partnerships and Developments

## 1. Manta Network Overview

- Shubbam introduced Manta as the first modular blockchain with zero knowledge proof applications, specifically an **Ethereum Virtual Machine compatible Zero Knowledge application chain**:

_“Manta is the first modular blockchain with zero knowledge proof application. So we are an EVM-compatible ZK application chain. “_

- Manta Network includes **Manta Atlantic**, a Parachain on Polkadot, and **Manta Pacific**, a layer two chain on Ethereum.

_“So Manta Network has two chains right now. So one is Manta Atlantic, which is a ParaChain layer one on Polkadot and Manta layer two like Pacific is a layer two on Ethereum EVM compatible chain.”_

## 2. Layer Differences and Polkadot’s Role

- **Manta Atlantic** has grown into one of the largest projects on Polkadot, originally focusing on privacy. They faced challenges with cross-chain bridges that affected privacy capabilities.

_“So Atlantic was our first project. where we initially launched the chain as a Parachain on Polkadot right now it is one of the biggest projects on Polkadot after the successful launch of Manta Pacific (...) initially when we started it was a privacy chain and at that time no one was talking about the privacy no one was talking about the zk so it was working well for us (...) And that's how the privacy was not working for any other chain that was not focused on that particular. So that was the major issue with the privacy chain that time”_

- Manta shifted goals towards using zero-knowledge proofs to create a decentralized privacy network and increased focus on layer two to gain traction for ZK apps. Mentioning that layer one handles staking, transactions, and network fees, while layer two houses ZK applications to attract users.

_“So we thought maybe our goal was to fix this issue and to get some more traction on the ZK side. Or maybe to focus more on the decentralized or the other privacy network side. So we started with the layer 2 first to gain some traction. As you know like after the token on so our Atlantic chain is also getting live or more and live more and apart from that we are majorly using layer one for the staking for the call letter and the network usage fees as well”_

- **Manta Pacific**, the layer two, launched in September 2023, amassing **$2B in Total Value Locked (TVL)**.

_“So we initially launched Mainnet back in September 2023 for the Pacific, like Manta Pacific, which is L2. And till now we have been around $2 billion on chain TVL. So that's how like big we are on the Pacific side or the L2 side.”_

## 3. Data Avalability and Gas Fees

- Manta uses **Celestia** as a data availability layer. Celestia helps lower gas fees and increases utilization rates, avoiding Ethereum's fee spikes by using Celestia for data storage.

_“To be a native house for the zk application so right now we have built our own zk like universal circuits so that we can provide zk as a service plus as you guys know like the gas fees on the zk rollups right now are quite expensive so before launching fully on the zk side we wanted to pursue like a data availability and celeste was the best example for that (...)  But if you check on the Manta network side, so with the help of Celestia, all the data has been pushed over there and we can easily reduce the gas fees whenever we want, even if it's high on that particular end."_

## 4. $MANTA Utility Token

- **$MANTA tokens** are widely adopted in various DeFi applications on Manta Pacific, an EVM-compatible layer two. The Revenue from the network leads to $MANTA token burns to support its value.

_“So the major use case like users can use it all over the like ecosystem. It is adapted by all the DEXs, all the lending protocols, and all the yield aggregators, everyone is accepting the Manta token. (...) Apart from that, all the revenue generation is being used and the Manta token has been burned from that particular end so that the value doesn't go down and deplete in the future."_

- On Manta Atlantic, $MANTA tokens pay for network fees, and peer-to-peer transfers, and will be used for governance by the Manta Foundation, in addition to enhancing network security.

_“Apart from that, on the Atlantic side, on the L1 side, Manta token can be used as the network usage fees. It can also be used for peer-to-peer transfers. It can it will be used for the governance model. So for the Manta Foundation, which has been like already in discussion and will be established soon.”_

## 5. Staking Mechanisms on Manta Network

- Manta Network offers liquid staking of $MANTA tokens. Users stake tokens on layer two which is managed on layer one in the background, getting liquid staking tokens on layer two.

_“Whenever you go to the liquid staking you just need to do like some transactions you need to approve it on the background side it will go to the Atlantic side it will be staked and all the liquid stake tokens will come back to the Pacific like the layer 2 (...) So you can directly stake, there will be no bridging, and you will directly get the stake or the LST tokens to the L1. So that's how the basic principle works over here.”_

- **Manta bridge** is used for secure transactions between the layers, with Layer Zero partnership adding security and utility.

_“Manta bridge which was specifically for the Atlantic to Pacific so if you go to the Manta website you'll get to see like bridge to Pacific or bridge to Atlantic so that's the native one which is quite secure from our end and even definitely it's from the Manta side (...) Recently we have also partnered with layer zero So, layer Zero can help us out for the EVM or maybe the other chains connecting out or getting out on the Ethereum mainnet side. So, in the future, if we talk about LRTs, so maybe layer Zero will be helping us out on the bridging side.”_

## 6. Incentives and Rewards for Stakers

- Provides competitive Annual Percentage Yields through partners like Accumulated Finance and BiFrost, ranging between **36% and 49%**.

_“So for example right now there are two projects that are providing Liquid Staking specifically for $MANTA tokens which is Accumulated Finance and the second one is Bifrost. So I think like the average API on that particular end was around 36 to 49 percent.”_

- The "Blast Off" campaign provides stakers with bonus tokens for staking BETH on Manta, partnered project rewards included.

_“We recently announced the campaign called the Blast Off. So if you hold some tokens like ETH on Blast, you can use native Blast projects like FreeTech and Rawr. So these two projects help you to get BETH on Manta. And if you stake like restake all these tokens BETH on Manta, so you get additional tokens from Manta. Plus you get additional tokens from the ecosystem projects as well.”_

## 7. Re-Staking Process

- Users bridge staked assets from Ethereum to Manta to re-stake and receive liquid restaking tokens on Manta.

_“The restaking part is mostly done on the L1 side like the mainnet side, not on the L2. So if you hold some tokens like if you bridge it out from any other chain to Manta you just need to hold your ETH on Manta all the background processes will be done by the projects that are currently part of our restaking. “_

- Connext collaborates with Renzo to support bridging operations and deploy XERC on Manta. 
_“So if you have heard about Connext, so they have a recent like partnership with Renzo for a token called XERC. So these XERC is a cross-chain token which can be used on Manta, which can be deployed on Manta as well.”_

## 8. Security and Risk Mitigation for Staking

- Manta partners with audited protocols and trusted bridges. Additionally, Manta aims to implement a multisig approach to increase asset security.

_“The bridges we are currently looking at have been audited plus all the projects which have been in this space for quite long we are getting their suggestions (...) Apart from that, multisig is already ready. We will be having multisig aligned so that there is no scam or there is no project who just come and hold all the tokens of the users and they just ran away from that. So yeah, these are some of the parts which we are currently focused on. “_

## 9. Manta Network Layered Front-End

- Shubbam talked about front-end aspects related to LST tokens, LRTs, and user options. Tokens on Manta Pacific can be bridged to Manta Atlantic with one click, and new tokens are minted on the Pacific side for DEX use.

_“So I think like the front end for all these things like it can be LST or LRT. So the front end for all this is because right now Manta has a different perspective. (...) o, we want a front-end where, for example, if you hold tokens on Manta Pacific, with just one click, it will be bridged to the... L1 like Manta Atlantic, your tokens will be staved, new minted tokens will be on the Pacific side and then you will have all the options to go ahead and deposit or provide liquidity on any other DEXes on Manta Network.”_

- A front-end system is in development to let ETH holders on Manta select strategies involving liquid staking protocols or LRTs like Kelp.

_“So for example, if you like hold native ETH on Manta. So you have two options. As you can see on the website, just like aggregation, you'll see two strategies. One, either to go with the liquid stake, like staking protocols, or maybe you should go with the LRTs, just like Kelp or any other one, and see how and what rewards you are going to get.”_

## 10. Manta Network Partnerships and Developments

- Shubbam mentioned partnerships with **Accumulated Finance**, **Bifrost**, an active 'blastoff' campaign, and expected partnerships like **Kelp** for LRTs.

_“So the blastoff campaign is also live, you can just check out Manta Twitter and there are like liquid staking partners like Accumulated Finance and also like Bifrost is also live so you can check all of them (...) on the LRT side we are looking for some more partners but I've already mentioned names like Kelp and stuff so they will be coming to Manta and yep that's the major next step which we are looking forward for”_


During an insightful AMA, Shubbam from Manta Network highlighted the platform's innovations in blockchain and privacy, particularly its $2 billion success in DeFi Bonding Liquidity through Manta Pacific's layer 2 solution. Manta Network is leading the DeFi space by providing zero-knowledge proofs and strategically moving to layer two for scalability and lower gas costs.


Deep Dive into L2 Chains w/ Manta Network

[Avalanche](https://www.avax.network/) shared more than just updates during our recent AMA session; they also unveiled an intriguing 2024 roadmap that centers on breaking new ground in the blockchain industry. They're stepping up with faster transaction protocols, customizable networks that could alter the way blockchains communicate with one another, and initiatives that might lead to the development of top-notch blockchain gaming. 

In addition to the tech talk, there were whispers of possible press releases, worldwide expansion, and a closer look at DeFi. Prepare for a deeper look at their plans to turn 2024 into a significant year in blockchain:

X Spaces: [L2 Chains from the Perspective of a L1 Chain](https://twitter.com/stakingcircle/status/1763232854920585366) 

Speakers: 
- Nadim Chamoun ([X Profile](https://twitter.com/chamounnadim)) - Business Development at Ava Labs ([X Profile](https://twitter.com/avalabs))

**Index**:
1. Avalanche Features and Differentiation
2. Consensus Gossiping Mechanism
3. Avalanche Staking Mechanism
4. Institutions and Tokenization
5. Avalanche Future Plans for 2024
6. L2 Chain Focus Shift
7. Shift in Priorities for Blockchain

## 1. Avalanche Features and Differentiation

- Nadim mentioned that Avalanche is more of a Layer 0, allowing deployment of Layer 1 blockchains and some public blockchains within the primary network:

_“Avalanche really is more of a layer zero in a sense, where it allows people to deploy their own layer one blockchains. Of course, there are some kind of public blockchains that exist within Avalanche, within the primary network. And that's probably what most people interact with at first, like the Avalanche C-chain. That's why some people will think, oh, Avalanche, it's like layer one EVM compatible chain.”_

- **First key aspect**: Avalanche Consensus, a third-generation protocol, scales to a vast number of validators and ensures fast finality since nodes don't have to communicate with every other node:

_“The first one is Avalanche Consensus. It's the reason it all happened. It's the third generation of consensus protocols. It has a few very interesting properties that no other consensus protocol has in kind of combination. It's kind of our way to scale. The first one is that it can spread to a very large amount of validators. It doesn't really have a validator gap. And because of how consensus is done with gossiping, it actually also has very fast finality, as you increased the validator set, because you don't need every single node to communicate with every single other node.”_

- **Second key aspect** is Avalanche subnets, allowing validators to deploy customizable blockchains. He highlighted the Hyper SDK's goal to create custom VMs with examples like Aptos, Sui, Cosmoism, and Solana VMs:

_“the second innovation behind Avalanche is Avalanche subnets, where you essentially have an Avalanche primary network. But then validators can organize to form subnets whereby you can have subsets of validators that decide to deploy their own customizable blockchains. And we're really kind of diving deep into the customizability piece for those blockchains. So the Hyper SDK is something that we're working on where you can really create your own virtual machines. There are a lot of teams building kind of custom VMs based on other virtual machines out there. You can think of like Aptos, Sui, Cosmoism. Solana VMs, all of this could exist under Avalanche consensus”_

- **The last feature** is native interoperability between subnets and the primary network, enabling cross-chain messages without extra trust assumptions due to shared validators:

_“last real interesting feature of Avalanche is that there is native interoperability between the subnets and any blockchains on Avalanche and the primary network. And this is enabled by the fact that we can have this very large validator set and any subnets shares validators with any other subnet or the primary network, which means that you can send messages cross-chain without requiring additional trust assumptions”_

## 2. Consensus Gossiping Mechanism

- Each node communicates with neighbors during sub-sampling rounds. Nodes sample a portion of the network, gain opinions from some nodes, and establish a consensus with high probability after enough rounds:

_“how it happens like at a high level is that every node talks to its neighbors over kind of sub sampling round. So like it will sample part of the network, it will get the opinion from some nodes, and it will do this over a few rounds until it has like a very high probability it knows that the network thinks one way or another. And every node does this over, you know, a parameterized amount of rounds. And so as you have everyone do this, you can very quickly get to a point where the network thinks, okay, this turns out this block should go through or shouldn't go through.”_

## 3. Avalanche Staking Mechanism

- Nadim details that setting up a validator on Avalanche requires a minimum of 2,000 $AVAX. Staking rewards are retrievable at the end of the staking period, which ranges from a minimum of two weeks to a maximum of one year:

_“There's a minimum requirement to stake within a validator of 2000 of Avax, and that's how you become that validator. And then you get staking rewards. Minimum duration is two weeks. Maximum duration is a year.”_

- There's no slashing in Avalanche, but validators must maintain an 80% uptime to receive rewards: 

_“You only have a requirement of uptime. So you need 80% uptime for your validator to receive the reward throughout the entire period. So if you got that, you'll get the full reward. If you didn't hit that point, then you will get zero as a reward. And that's basically how it works.”_

## 4. Institution and Tokenization

- Nadim talked about Avalanche's work with traditional institutions using compliance-focused evergreen subnets for permissioned use cases. Recent announcements include collaborations with JP Morgan and Citibank for deploying evergreen subnets on Avalanche and exploring interoperability:

_“And we do love to say institutional to say a lot of different things. But we've done a lot of things to just kind of onboard more traditional institutions on chain. And that really also is centered around subnets and specifically evergreen subnets, which are. Compliance subnets, or at least subnets that have a lot of features to allow compliance with regulation (...) One of the most recent announcements was about JP Morgan, as well as Citibank deploying their own Evergreen subnets on AvLaunch for their own use cases. And also kind of testing interoperability between those chains, which I think. It's probably the main reason why people move from like either their native chain like Onyx for JP Morgan or different chains that were like more permission that have been around for a while."_

- Nadim brought up the Avalanche Foundation's support for tokenization, with a focus on providing liquidity for initiatives such as real estate and non-USD stablecoins:

_“We have announced a pretty large program to essentially allocate liquidity from the foundation. Avalanche vStat towards tokenization initiatives. And so we have been pushing a lot of like new assets on chain. It could be real estate. There's some stuff around that. We've also done a lot of stuff around non-USD stable coins and just onboarding more currencies on Avalanche. And we'd love to support anyone who's also doing anything around tokenizing off-chain assets on chain.”_

## 5. Avalanche Future Plans for 2024

- Efforts are concentrated on entering new geographies, developing consumer apps, NFTs, and deepening enterprise involvement, including partnerships with Fortune 500 companies:

_“So we are set up in different verticals that all try to push different things. So there's like the NFT vertical, DeFi vertical, institutional enterprise. You know, you get the gist here. But a few things that we're going to be pushing this year, like purely from a BD standpoint, I think is going to be kind of new geographies. So last year we were kind of really pushing into Asia. We're still going to do this this year. I think Latin America and Africa are going to be part of the focus just so we actually do have a global reach (...)  There's a bunch of other stuff like on the enterprise and NFT side, we've been doing a lot with kind of more Fortune 500 partners”_

- Plans to enhance DeFi features, particularly payments, cross-border transactions, remittances, and on-chain FX:

_“On the DeFi side, obviously, we'll still be trying to be at the cutting edge of DeFi, but I think we're really looking at payments and cross-border payments, remittances, stablecoins, on-chain FX. There's all going to be important topics for us this year”_

- Gaming is a significant focus, with excitement for AAA-quality games expected to launch:

_“And obviously gaming is a pretty big one for us just because a lot of the games that we've been waiting for for a long time are starting to come live or at least starting to be ready. And so really excited for a few of those launches where we should show the rest of the kind of blockchain gaming ecosystem what a AAA game on-chain looks like.”_

## 6. L2 Chain Focus Shift

- Nadim believes that many of their predictions have been made obsolete this year due to changes in the market. The excitement is about a shift in trend from chain infrastructure development to application build-out on L2:

_“But I'd say what I'm excited for this year is I think last year, or at least during this whole bear market, kind of at least the last year and a half, there's been this huge focus on infrastructure and really like. Chain infrastructure, so layer twos being a huge thing, restaking as you see again, data availability, we're building subnets, other teams are building other app chain stacks.”_

- Infrastructure projects were the main recipients of funding, with fewer developers building on those ecosystems:

_“And people stopped really building applications on top of that, where most of what got funded for a long time were just the infrastructure projects and the enablers. But then there isn't necessarily people building on top of those ecosystems. So what I'm excited is About this to like basically see a shift in this”_

## 7. Shift in Priorities in Blockchain

- Nadim anticipates a shift from prioritizing infrastructure to valuing applications built on top of it. The practical functionality of new applications will take precedence, regardless of whether they are L2s or subnets:

_“But I think we're going to start seeing less of a premium placed on infrastructure and more of a premium placed on the applications that are being built or stuff isn't necessarily going to be like it's not going to matter if you're an L2 or subnet necessarily. It's just going to matter that your stuff is kind of working right.”_

- The importance of practical applications that solve real problems using the current robust infrastructure is emphasized. Highlighting that infrastructure is now in a good spot, enabling the development of practical applications, which wasn't necessarily the case two or three years ago:

_“And then that you are building an interesting application with an interesting use case versus trying to. Think about very complex ways to solve problems that don't necessarily really exist. And so I think that the infrastructure has has made a lot of progress recently. It's in a really good spot right now in terms of what's possible versus, you know, if you looked at like two or three years ago and we really need this kind of influx of builders building real life kind of retail facing or business facing.”_


Avalanche shared more than just updates during our recent AMA session; they also unveiled an intriguing 2024 roadmap that centers on breaking new ground in the blockchain industry. They're stepping up with faster transaction protocols, customizable networks that could alter the way blockchains communicate with one another, and initiatives that might lead to the development of top-notch blockchain gaming. 


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