DeFi Technologies is set to launch a validator node on Core Chain and stake nearly $100 million in Bitcoin (BTC). The Toronto-based company will earn rewards for validating transactions and staking through its subsidiary Valour.
Staking is made possible by Core’s Ethereum Virtual Machine-compatible consensus mechanism on its layer-1, BTC-powered blockchain. DeFi Technologies CEO Olivier Roussy Newton explained that stakers will maintain custody of their BTC during the lockup period and receive rewards in CORE tokens, which are then reinvested in the product. Staked CORE provides a reward of 11.66%.
To ensure security, 50% of BTC mining hash power is distributed to the blockchain itself. Apart from DeFi Technologies’ stake, Core already has over 2,800 BTC staked.
This collaboration between DeFi Technologies and Core marks the second step in their partnership. They previously launched the Valour Bitcoin Staking exchange-traded product on the Nordic Growth Market exchange with the Swedish krona as the base currency.
The Valour ETP, claiming to be the first yield-bearing BTC ETP, offers BTC exposure with a 5.65% yield and a 1.9% management fee. The partners also plan to introduce a Core ETP that will provide yield through BTC staking. Valour offers ETPs backed by 12 other coins, including Uniswap and Polkadot, as well as a 10-coin basket like Bitcoin Carbon Neutral (BTCN) and the STOXX Bitcoin Suisse Digital Asset Blue Chip X Index, some of which have no management fee.
DeFi Technologies’ recent pivot towards greater reliance on BTC is evident in this move. The company announced on June 10 that it had made BTC its primary treasury reserve asset and purchased 110 BTC as part of this strategy. This decision resulted in a 23% increase in DeFi Technologies’ share price.
As of May 31, DeFi Technologies had a cash balance of $51 million, while Valour had $607 million in assets under management (AUM). In mid-March 2022, Valour’s AUM was at $274 million.
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