DeFi Technologies CEO on the industry’s first Bitcoin yield-bearing ETP

Crypto.news
caught
up
with
Olivier
Roussy
Newton,
CEO
of
DeFi
Technologies,
to
explore
the
Valour
Bitcoin
Staking
ETP,
the
first
product
to
merge
Bitcoin
with
yield-bearing
staking
mechanisms.

Bitcoin
holders
have
traditionally
missed
out
on
staking
opportunities
available
to
other
cryptocurrencies
due
to
Bitcoin’s
reliance
on
the

Proof-of-Work
(PoW)
consensus
mechanism.
PoW
requires
miners
to
solve
complex
mathematical
puzzles
to
validate
transactions
and
secure
the
network.

Due
to
the
size
of
the
Bitcoin
network,
substantial
computational
power
is
required,
which
in
turn
chugs
in
substantial
amounts
of
electricity. 

As
an
alternative,

Proof-of-Stake
(PoS)
allows
users
to
validate
transactions
based
on
the
number
of
coins
they
hold
and
stake
as
collateral.
In
a
PoS
system,
validators
are
chosen
based
on
the
amount
of
cryptocurrency
they
hold
and
are
willing
to
“stake”
as
collateral. 

This
approach
lets
participants
earn
yields
simply
by
holding
and
staking
their
tokens.
The
process
is
more
energy-efficient
and
accessible.

In
contrast,
Bitcoin’s
PoW
system
rewards
miners
with
newly
minted
coins
and
transaction
fees
for
solving
computational
puzzles.
However,
reward
generation
is
limited
to
those
who
can
afford
the
inherent
expenses
associated
with
Bitcoin’s
approach.

Consequently,
Bitcoin
holders
rely
on
price
appreciation
for
returns,
missing
out
on
the
yield-generation
mechanisms
available
in
PoS
networks.

Recent
innovations
are
addressing
this
gap
by
introducing
ways
to
stake
Bitcoin.
For
instance,
blockchain
networks
like

Core
Chain
are
enabling
Bitcoin
staking
through
mechanisms
that
combine
PoW
and
PoS
elements.

Core
Chain’s
protocol,
known
as
Satoshi
Plus,
allows
Bitcoin
holders
to
earn
yields
by
staking
their
BTC
in
a
non-custodial
manner,
maintaining
control
over
their
assets
while
participating
in
network
operations
to
earn
rewards. 

With
this,
Bitcoin
holders
get
a
means
to
generate
passive
income
from
their
holdings
without
compromising
the
core
principles
of
Bitcoin’s
PoW-based
security
model.

The
Valour
Bitcoin
Staking
ETP
(exchange-traded
products)
capitalizes
on
this
technological
advancement,
providing
a
secure
and
regulated
avenue
for
investors
to
earn
staking
rewards
directly
through
Bitcoin. 

Newton
explains
how
this
could
transform
the
Bitcoin
investment
landscape.

Can
you
provide
an
overview
of
the
Valour
Bitcoin
Staking
ETP
and
discuss
the
inspiration
behind
its
launch?

Valour
is
on
the
cutting
edge
of
regulated
crypto
products,
accessible
to
a
broad
audience.
They
recognized
that
one
of
the
issues
with
BTC
products
is
that
they
fail
to
earn
yield
or
have
to
take
on
major
risks
in
order
to
do
so.
Upon
seeing
the
benefits
of
Core
Chain’s
Non-Custodial
BTC
Staking,
Valour
realized
it
could
offer
its
users
BTC
with
yield
without
involving
any
new
risk
assumptions.

How
does
the
BTC
staking
program
on
Core
Chain
function?
What
ensures
its
security
and
efficiency?

BTC
staking
enables
the
most
valuable
digital
asset
to
be
used
to
secure
the
Core
blockchain.
Importantly,
BTC
staking
utilizes
Bitcoin-native
functionalities
like
absolute
time-locks
to
ensure
that
staked
BTC
never
leaves
the
Bitcoin
chain.
Users
simply
lock
their
BTC
on
the
Bitcoin
blockchain,
use
that
locked
BTC
to
vote
for
validators
on
Core
Chain,
and
then
earn
rewards
from
those
validators
securing
Core
Chain
while
their
BTC
is
still
locked.
So,
BTC
secures
Core
Chain
without
ever
leaving
the
Bitcoin
chain.
BTC
staking
is
part
of
Satoshi
Plus,
which
is
Core
Chain’s
consensus
mechanism.
When
Valour
stakes
BTC
with
Core
Chain,
they
are
participating
in
the
election
of
trusted
validators
who
then
create
blocks
on
Core
Chain. 

Given
the
challenges
faced
by
other
yield-generating
platforms
such
as
Celsius
and
BlockFi,
what
distinguishes
the
Valour
Bitcoin
Staking
ETP
from
these
offerings?

First,
skepticism
is
always
necessary
in
crypto,
and
everyone
should
do
their
own
research.
Importantly,
Valour
has
a
very
different
profile
when
compared
to
entities
like
Celsius
and
BlockFi.
Valour
is
a
regulated,
publicly
traded
company
with
many
existing
ETPs.
Additionally,
the
source
of
the
yield
from
this
particular
product
is
very
clear.
The
yield
for
Valour’s
Bitcoin
Staking
ETP
is
found
in
Core
Chain’s
Non-Custodial
BTC
Staking.
“Non-Custodial”
BTC
Staking
means
that
the
BTC
held
by
Valour
never
needs
to
change
hands.
There
is
no
additional
counterparty
risk.
The
only
counterparty
risk
comes
from
Valour,
which
is
the
same
as
a
non-yield-bearing
Valour
BTC
ETP.

How
do
Bitcoin
miners
contribute
to
the
Core
Chain
network,
and
what
impact
does
their
participation
have
on
the
security
and
rewards
structure?

Just
as
BTC
stakers
delegate
their
BTC
to
elect
validators
on
Core
Chain,
Bitcoin
miners
and
mining
pools
can
delegate
their
hash
power
to
Core
Chain
to
elect
validators.
In
exchange
for
their
participation
in
Satoshi
Plus,
Bitcoin
miners
and
mining
pools
earn
CORE
rewards.
With
Bitcoin
miners
being
the
decentralized
defenders
of
Bitcoin
itself,
their
involvement
in
Core
Chain
further
decentralizes
validator
election
and
aligns
Core
Chain
with
the
Bitcoin
blockchain.

Lastly,
can
you
elaborate
on
how
the
‘Satoshi
Plus’
consensus
mechanism
refines
the
traditional
Bitcoin
Proof
of
Work,
particularly
in
terms
of
security
and
efficiency
enhancements
for
stakers?

Satoshi
Plus
delivers
tangible
value
back
to
Bitcoin
stakeholders
through
a
variety
of
means.
First,
Satoshi
Plus
rewards
Bitcoin
miners
for
delegating
their
hash
power,
thus
further
incentivizing
Bitcoin
miners
to
secure
the
Bitcoin
Network.
Secondly,
Satoshi
Plus’
BTC
staking
brings
native
yield
to
Bitcoin
for
the
first
time
in
history.
Bitcoin
now
has
staking
rewards
like
Ethereum
without
compromising
on
any
of
its
design
principles.