Bifrost Launches BTCFi, Native Staking Option for Bitcoin Holders

Web3 derivatives protocol Bifrost has launched its in-house native staking service for Bitcoin holders. Native staking for Bitcoin has been more of a myth than a feature. The service was kickstarted by the now-defunct Celsius Network, which was principally a centralized operation. Revealed in a recent Medium blog post, Bifrost is looking to change the game by offering decentralized Bitcoin staking via a new service it calls BTCFi.

The idea is to allow Bitcoin holders to earn passive income with minimized risk within a user-friendly platform. BTCFi is also self-custodial, meaning users will have total control of their Bitcoin assets during the staking process.

Introducing our upcoming service, BTCFi!
This is the first article in a series that will explain the service in depth.
➡️ Introducing BTCFi
— BIFROST (@Bifrost_Network) February 6, 2024

Highlighting some of BTCFi’s unique features, Bifrost noted that it would come with native Bitcoin usability. This feature lets users lock up actual Bitcoin assets and earn passive revenue through a fair and transparent reward mechanism.

Cross-chain interoperability is also available, meaning holders can send and receive BTC-backed liquidity from and to other blockchain networks. According to Bifrost, this would create a ‘positive flywheel system,’ thereby expanding the use case of the proof-of-work (PoW) native crypto asset. BTCFi will be powered by the BtcUSD asset, an over-collateralized stablecoin backed by Bitcoin.

Over-collateralized assets reduce the chances of bad debts and the asset losing its peg as users lock a significant portion of their digital assets upfront as collateral to access the platform’s funds. For BtcUSD, Bitcoin’s intrinsic capability as a store of value and safe haven mitigates the likelihood of significant price fluctuations.

Bitcoin Halving Could Prompt 2024 Bull Run

BTCFi comes when the overall market sentiment surrounding crypto, particularly Bitcoin, is overly positive. The foremost crypto asset is expected to undergo its four-year halving event in April 2024.

A Bitcoin halving event occurs when the block reward paid to network miners is halved. Currently, Bitcoin miners earn 6.25 BTC for every valid transaction they verify and add to the network.

Once the Bitcoin halving event kicks in, the block reward will reduce to 3.125 BTC per successful block mined. With a lower supply cap, the demand for Bitcoin is expected to soar exponentially, leading to a significant pump in price.

Shedding light on the possible trajectory for Bitcoin and the crypto market at large, Coinbase, in its weekly report, stated that the technical factors previously hindering their growth are lower.

Coinbase: The Pressure on Bitcoin and Cryptocurrency is Drying OutExchange Coinbase published its “Weekly: Constructive Outlook” report on Friday, providing insights into the future trajectory of BTC. Report authors David Duong, head of institutional research at Coinbase, and…
— Liquid (@Liquidweb3BTC) February 5, 2024

According to the report authors David Duong and David Han, the technical factors pressuring Bitcoin specifically (and crypto assets more broadly) are beginning to dry up.

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2024-02-06 17:03