Rich Rines - lstBTC: Yield-Bearing Bitcoin Collateral - TOKEN2049 Dubai 2025

So Core is the largest Bitcoin DeFi ecosystem on one side with about 500 million in TVL, about a million weekly active users, over 100 plus projects that are alive. It's truly the best place to go put your Bitcoin to work. On the other side, it's the highest yielding Bitcoin staking product. There's about 7 and a half thousand Bitcoin that are in there earning passive yield. It's the only complete Bitcoin ecosystem or what we refer to as the Bitcoin everything chain.

And here we're going to talk about our new partnership with Maple Finance to release LSTBTC, our liquid staked Bitcoin token. Before we go too far, know that uh this hasn't been approved by any regulatory authority, not financial advice. Do your own research. You guys know that story. So, the Wall Streetification of Bitcoin is coming.

So, we had the first spot ETFs that went live last year, over 100 billion in inflows, the most exciting ETF product to ever hit the market, and it really legitimized and gave Bitcoin accessibility to the largest fund managers in the world, retail accounts, you name it. And then after that, Core brought the first yield bearing Bitcoin ETPs to market with Valor. But that's just the beginning. You're going to see yield bearing Bitcoin ETFs, Bitcoin derivatives, structured products. This is a trillion dollar plus space in just a few years.

And probably the most exciting aspect in either crypto or on Wall Street today, the missing domino for these products has been yield bearing Bitcoin collateral. So if you're trying to generate a yield bearing product, having native yield is the unfair advantage to help get these things to market, make them sustainable, and ultimately provide products and services that meet the rappers that folks are looking for. And this is where LSTBTC comes in. So it's the backend for so many of these products. It can be a yield enhancer in DeFi or basis trades or it can be used like lido will be in these eat staking ETFs to facilitate early liquidity.

But this is the unlock that bitcoins needed to create these new products. And what's really powerful about this is this is how you link both Wall Street and Main Street. These are no longer different use cases for Bitcoin. Bitcoin will finally find its place as the ultimate collateral asset and unite these two groups. Before we go too far into it, uh my name is Rich.

I'm one of the initial contributors at core. Prior to this, I led money movements engineering at Coinbase for four years. I've been in Bitcoin since 2013. So, these problems are very near and dear to my heart. No one was scaling Bitcoin, so we said we'd do it.

And that was really the genesis of Core. I gave a quick overview of Core at the beginning, but we refer to Core as the Bitcoin everything chain. So, on the Bitcoin staking side, we're partnered with some of the best custodians, funds, etc. in the space to help create these offerings that give people truly passive and interesting yield on their Bitcoin. On the EVM side, we've got over a 100 plus projects that are launched and no ecosystem would be complete without its amazing builders.

And then finally, we have a wealth of exchanges and amazing infrastructure providers that not only keep the chain running but also provide access to individuals all around the world and is about 9 million core holders today. So products and services is the name of the game now in crypto. It's no longer just vaporware. It's providing things that actually meet demands. And Bitcoiners are no different.

We tend to think about Bitcoiners as just people that want to hold their Bitcoin, but that's not true anymore. A lot of Bitcoiners want to put it to work, provided it meets their trust and risk thresholds. So, for people that just want to hold their Bitcoin, Core offers them uh education today to get them ready to go earn passive yield. If you're ready to stake or time lock your Bitcoin, you can put it to work in COR's yield mechanism with their staking or dual staking. And if you're ready to be fully tip of the spear and come on chain, you can access one of these 100 plus DeFi protocols to go express your demand for Bitcoin utility.

But our job is to bring people from one side of that spectrum to the other knowing that not everyone will make that journey. But it's to give them ways to go put their Bitcoin to work and add utility. This all started with self-custodial Bitcoin staking, which we actually announced in Dubai last year. How does it work? So you time lock your Bitcoin on the Bitcoin L1.

It's the same mechanism that the Lightning Network uses called check lock time verify. It's been in Bitcoin since 2015. So, it's really battleh hardened. And by time locking your Bitcoin, it's critical that you have no principal risk. So, you never wind up in a situation where you wind up with less Bitcoin than you come in.

The worst thing that could happen is you don't get core rewards. So, it meets even the most ardent Bitcoin holders risk thresholds. And this is one-third of course consensus. We've got Bitcoin staking, core staking, and then also delegated proof of work, which you can think about as an alternative to merge mining. And we've had some pretty impressive growth over the 2 and a half years since we went live.

There's now 75% of the Bitcoin hash rate securing the core chain, over 7,000 cores staked, and now about 210 million core tokens that are also part of that. And each one of these different participants gets rewarded in core tokens for the security that they provide to the network. So for Bitcoin holders, it's passive yield. Same with core holders. And then if you're a Bitcoin miner, it acts as a second block reward for you.

Dual staking, we announced actually at token 249 Singapore last year. And the idea here was to reward multiple uh consensus participants together. So if you're staking both core and bitcoin, we reward you with significantly higher rates. Not just because you're on two sides of consensus, but because you're now helping to merge the core and the bitcoin communities. And this is ultimately what any Bitcoin scaling solution needs to achieve.

People need to want to be involved in both ecosystems and that's what dual staking created. So the million-dollar question is always where does the yield come from and how is it sustainable. So in Kor's case, it has a very flat emissions curve over 81 years and it pays out block rewards to all these different consensus participants. It's a fixed emission token of 2.1 billion and it's very slow emission.

It's not like a normal proof ofstake chain that emits essentially almost in its entirety in about 5 years. On top of that, you also get the gas fees for the transaction fees that are on the network. And similar to Bitcoin, over time, the block rewards go down, the transaction fees will outweigh it, and that creates this really nice pressure. And it's an homage to Bitcoin itself. And then on the other side of the consensus mechanism, so if you stake both core and Bitcoin, we pay you different amounts based on the amount of core and Bitcoin that you stake, which creates this yield taring.

We're the first proof ofstake system that pays out nonlinear yields based on your participation in the network. And to visualize this, you can see that if you just stake Bitcoin, you earn a lower yield. If you stake the max amount of Bitcoin in core, you earn a much higher yield. And this is the the visualization of of that principle. So this yield is dynamically adjusted with the core to Bitcoin ratio.

So we reward different amounts at no Bitcoin, 3,000 Bitcoin, 9,000, and then 24,000 uh core to Bitcoin. And that adjusts based on market forces. So you can think about is this is demand elasticity. And what it's trying to do is balance out around a 5% equilibrium. So if the yield gets above 5% for sustained period, those requirements will drop.

If it gets above uh below 5% for sustained period, those requirements will increase. And it's this ratchet mechanism, this elasticity that's so important because ultimately if you're trying to build a Bitcoin yield product, you're trying to solve a very hard problem, which is how do you balance a $ 1.5 trillion asset and a $ 1.5 billion asset. So you have to have this stimulus response and he people have to become part of both ecosystems in order to get the highest yields and this is just the explainer of what I just mentioned in terms of that that ratchet function.

So with any cryptoeconomic mechanism the question that you should always ask yourself is does this work? Well in Kor's case we now have six months of data and we've seen this work in practice now on both tier adjustments. So the yield dipped below, the requirements went up, you see some amount of Bitcoin fall off, and then you see them that core come back on. So it creates this stimulus response. And we now have multiple data points that are showing that this is really working and it's creating this nice yield layer on top of Bitcoin.

And it's important to remember that there's now 7.3,000 Bitcoin that's in there. That's like almost $700 million. And there's also critically 72 million core that are now currently staked as part of this mechanism. So to ask yourself, are we actually achieving our mission of blending the core and the Bitcoin communities?

Well, now over one-third of all of the core stake comes from Bitcoiners. So we're the first Bitcoin scaling solution that's achieved anything like this. It will continue to have that ratio increase over time. Uh so when we invented this this idea of time locking your Bitcoin to increase yield, it was deliberately to help unlock Bitcoin as the collateral asset that we all want it to be. So Bitcoin is an amazing collateral asset.

It's self-custodial. It has perfect scarcity, 24/7 liquidity, digital nativity, and it's totally permissionless. And of course, it's quite valuable today. Fifth most valuable asset in the world. However, Bitcoin has been very inefficient as a collateral asset.

It had negative carry and historically risky yield. So, you actually lost out on potential yield by holding Bitcoin. You didn't invest it in treasuries or some other yield. And then historically, the yield was risky. If you want to go earn on your Bitcoin, you had to lend it out.

And we all know people BlockFi, Genesis, Celsius, where you lent out your Bitcoin, never came back. And that's a lot of like scar tissue that many Bitcoiners have. And you have this dilemma. How do I offset the the negative carry? And then also, how do I get liquidity?

How do I actually go put this to work? So, those were all the questions that we asked ourselves when we forged this partnership with Maple Finance. You've probably heard of Maple. They're one of the OG DeFi protocols, probably the leader in institutional DeFi. They recently cost I think almost 1.

5 billion in TVL. So they were really an amazing partner for us. We were kind of both looking for each other the whole time and didn't know it. And what this created was really uh a three-pronged approach. You no longer have to substitute being an amazing custodian to go put your Bitcoin to work.

You can use Copper, Bitco Hexrust, and several others soon. And then you also could go get the highest Satoshi tier yield. So around that 5% that it's currently targeting while having the liquidity. So if you want to go bring this into other DeFi protocols, you can. You can use this collateral on on many other venues.

But it was really solving all of these problems at once. And it's been in private beta for the last um the last about 10 weeks. It already has about 1500 Bitcoin that are currently in the product. So how does it work? So it tokenizes that acquisition and risk management of of the core.

So it bitcoin comes in as collateral. A low LTV loan gets taken out against it. Core gets acquired and then it get hedged out and you get this receipt token. So they manage putting on all that trade for you. And this has a flywheel.

So as more LST BTC gets minted, more cores is acquired, core supply shrinks, yield goes up, and more LST demand goes through. And we've already seen this flywheel take off. So the idea of yield layering is something that I'm very interested about. So historically, if you didn't want if you want to lend out your Bitcoin or basis trades, you can do it, but you can do it for maybe four or 5%. Well, now if you start to bring LST bitcoin into that mix, you get to bring that staking yield with you.

And if you're bringing that staking yield with you, you can go north of 6 7 8%. And with that, you now have a product that will help unlock so much more Bitcoin because you now have incentive to actually go do that. You can also do looping, lending, other DeFi strategies as well. And this is a really powerful concept. So a visualization of this is this is offsetting the negative carry that historically plagued the space.

And it more than offsets the fees like custody or even against safe yields like T bills. So zooming in on DeFi for a minute. So historically the benchmark for Bitcoin has been WBTC on a 0.2%. Not really interesting for most people to take smart contract risk to go bridge over in Kor's ecosystem which is Bitcoin denominated.

So that 500 million TVL it's majority Bitcoin. People are actually putting their Bitcoin to work. They're generating interesting APYs and you're already seeing substantively higher yields than you can get in other ecosystems. With LSTBTC, this will get supercharged. So now not only will you have real borrow rates, but you'll have the staking rate.

You won't have to choose between each and you're going to have more interesting DeFi yields. And this is really the ignition of what Bitcoin DeFi has been missing. A reason for you to wrap, swap, etc. and come over. And this is puts LFTBTC really at the center of both these Wall Street and main street use cases.

Zooming in on the institutional side. So I mentioned earlier we brought the first yield bearing Bitcoin ETP to market with Valor early last year. You're going to see a wave of products that come to market with LSTBTC as the backend. You can think about it as the lido equivalent from any of these Ethereum staking ETFs to help be more capital efficient and enable quicker time to liquidity. LSTBTC is going to go multi-chain.

So, we're going to bring it to many of the biggest ecosystems. We're super excited to partner with so many of these folks to help give Bitcoin more use cases beyond just Core. And then finally, Corefi Strategy, which is the micro strategy for core that we're so excited to bring to the world later this year, is going to be running a micro strategy playbook, plus helping to popularize this dual staking trade for many of the participants that might not be able to put it on themselves. To wrap up here, the Wall Street vacation of Bitcoin is coming and LST BTC is here to power it with a backend for so many products. This is a multi-deade potential opportunity where so much of Bitcoin will crawl into these other rapper products and then soon enough you'll have a many trillion dollar space.

Thanks so much for the time. You can check out Coror's site or Maple site to learn more. Thanks so much.