Introducing Bitcoin Liquid Staking on Babylon with pSTAKE

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Find out everything you need to know about V1 of pSTAKE’s BTC Liquid Staking solution, set to bring yields to BTC holders through Babylon.

pSTAKE is proud to announce that the first version of its innovative BTC liquid staking solution designed to bring yields to BTC holders is officially coming in the next few days.

The first version of the product, which successfully launched its testnet earlier this month, has seen remarkable success. A total of 44,800 users have participated, depositing an impressive 40.65 sBTC into the testnet procedure. This incentivized testnet allows users to trial our BTC Liquid Staking solution in a live environment, with an opportunity to build their psats points too.

With the V1 of the product incoming, we wanted to take a deep dive into the first version of our liquid staking protocol, which will grow and bring yield to BTC holders.

Bringing Yields to BTC Holders With BTC Liquid Staking and Security Sharing

pSTAKE’s Bitcoin liquid staking solution is built on top of Babylon, an innovative security-sharing protocol that brings the security of Bitcoin’s PoW algorithm to PoS chains with Trustless BTC Staking. Babylon plays a crucial role in the solution, allowing users to deposit BTC to lend economic security to PoS ecosystems, thereby enabling them to earn a yield from their BTC holdings.

Babylon has been battle-testing its product for some time and is expected to open its doors for mainnet BTC deposits soon. 

Enter pSTAKE’s BTC Liquid Staking Solution.

pSTAKE Finance, leveraging its four years of expertise in Liquid Staking, is building on Babylon’s architecture to bring a new form of yield to BTC holders through a liquid staking protocol. This solution allows users to lock their Bitcoins into the protocol, providing a way to gain rights to validate PoS chains and earn yields as a return. 

Best of all, users will retain liquidity of their BTC assets through the yield-generating yBTC token minted when users deposit into pSTAKE’s solution.

pSTAKE believes that BTCfi will achieve the biggest TVL in the crypto decentralized finance sector because the opportunity is huge, given Bitcoin’s gigantic market cap value. It also believes institutional capital will keep flowing, and these institutions will want to achieve capital efficiency on their assets, which is what liquid staking can provide for Bitcoin.

Introducing pSTAKE’s Bitcoin Liquid Staking V1

pSTAKE is excited to launch the first version of its Bitcoin Liquid Staking solution on the mainnet. Scheduled to launch in the coming days, the first version of pSTAKE’s Bitcoin Liquid Staking solution will allow users to make BTC deposits and withdrawals.

We envision our BTC Liquid Staking solution as a one-stop product for all hodlers wanting to generate a yield on their assets. With single-click BTC deposits, an integrated yield strategy, and a custodial provider through Cobo, we’ve built the foundation for users to start generating a yield on BTC. 

The features of the final pSTAKE Bitcoin Liquid Staking solution will include the following:

  • Single-Click BTC Deposits
  • Multiple Integrated Yield Strategies
  • Institutional Custody Provider
  • Comprehensive Security Measures and Audits
  • yBTC Issuance

Essentially, users will be able to make BTC deposits on pSTAKE to mint yBTC, a yield-generating BTC derivative. The BTC deposited by users will go to Babylon, which will then secure PoS chains and earn rewards for providing economic security. These rewards will return to pSTAKE and be auto-compounded into the protocol to increase yield for users.

pSTAKE has some unique features that make it worthwhile to liquid stake BTC rather than directly staking through Babylon. For example, Babylon will initially limit the number of BTC deposited into its protocol, while pSTAKE won’t have any.

In addition, pSTAKE is focused on making everything extremely straightforward for users. We believe accessing Bitcoin yields should be simple and safe. Instead of requiring users to choose a finality provider and the PoS chain to secure through Babylon, pSTAKE will make the yield-generating decisions to make everything seamless for BTC holders looking to generate yield. 

Finally, it’s important to remember that pSTAKE’s solution is a liquid staking solution, meaning users retain the liquidity of BTC through yBTC. Down the line, pSTAKE intends to have the yBTC ERC-20 token teleported everywhere where DeFi is happening, allowing the yield-bearing token to earn points from other protocols and increase yield for liquid stakers. 

V1 and the Upcoming Versions of pSTAKE’s BTC Yield Solution

The pSTAKE Bitcoin Liquid Staking solution will launch as a V1 product, providing only BTC deposit functions. The withdrawal function will be integrated shortly after V1 launches. 

V1 serves as the first stepping stone to getting the pSTAKE BTC Liquid Staking solution up and running. V1 can accept deposits in BTC and have the coins ready to be utilized in yield-generating avenues. In addition, the V1 solution will also use a custodian solution through Cobo, ensuring the security of all deposited assets right from the very beginning. 

The following is a quick rundown of the additional features pSTAKE will implement into V1 and its subsequent versions. Throughout July and August, pSTAKE intends to release multiple new features to the first version, including the following:

  • pSTAKE Self-custody launch: Users will be able to deposit BTC and access yields through pSTAKE while maintaining self-custody of their BTC.
  • Wallet Support: Users can access pSTAKE through their preferred wallet of choice.
  • PSTAKE SatDrop psats Program Launch: Launching the pSTAKE points program, allowing users to complete on-chain and off-chain tasks on pSTAKE to build psats points.

Following these integrations, pSTAKE will continue to release the upcoming versions of the pSTAKE BTC Liquid Staking solution:

~ August 2024 – pSTAKE V2

  • This version will see the issuance of the yield-generating yBTC token on the Ethereum network. 
  • pSTAKE will integrate yBTC into the broader DeFI landscape throughout the Ethereum ecosystem and teleport yBTC everywhere to increase yields and points collection from pSTAKE’s partner protocols.

~ September 2024 – pSTAKE V3

  • This version will see the yield on BTC going live as Babylon’s Trustless BTC Staking solution starts to generate yields through yield sharing. 
  • The yBTC token will increase in value as Babylon rewards are auto-compounded into yBTC.
  • pSTAKE will also launch a revamp of its tokenomics, allowing the community to decide how to integrate PSTAKE into the protocol’s product.

~December 2024 – pSTAKE V4

  • The fourth version of the pSTAKE BTC Liquid Staking solution will introduce additional reliable BTC yield sources to the protocol, providing higher BTC yields for liquid stakers.

The completed version of the protocol will include numerous sources of yield for BTC holders, best represented in the following yield flow diagram:

User Flow: How Does It All Work?

There are four primary components that build the bulk of pSTAKE’s Liquid Staking solution:

  • Orchestrator
  • Custody Provider
  • Accounting Contract
  • Callback Servers

Together, these primary components form the full backend of the pSTAKE yield product. When a deposit is made into the pSTAKE BTC Liquid Staking solution, each component ensures that each user’s assets are logged and allocated.

The Orchestrator is the communication hub that ‘orchestrates’ data transfer from the UI to the backend system (Accounting Contract and Callback Servers) and Custody Provider. The Orchestrator also processes user requests, validates data, and forwards requests to the Custody provider.

The Custody Provider, which integrates with Cobo, the custodian for pSTAKE’s BTC Liquid Staking solution, is a key component that ensures the security of your assets. It manages the cryptographic keys using the Threshold Signature Scheme (TSS) to keep all BTC assets secure.

The Accounting Contract, a proprietary EVM smart contract, is a transparent and tamper-proof component that maintains the accounting of user funds. It is entirely decentralized, and the state of this smart contract can only be updated by a central authority managed by pSTAKE, provided a number of conditions are met. 

The Callback Servers (and the Callback Mechanism) are the cornerstone of the entire system, ensuring its reliability and efficiency. They execute critical actions, such as validating withdrawal requests and processing transaction signatures. This Callback Mechanism ensures that the system achieves full autonomy when combined with the Accounting Contract.

These four components function together when a user executes a deposit (or withdrawal) on the UI. 

Here are the detailed steps of the deposit flow, showing everything that happens behind the scenes with these four components when a user makes a deposit:

pSTAKE UI:

  1. The user makes a deposit from the pSTAKE Dashboard.
  2. The UI creates a deposit transaction that needs to be signed.
  3. The user signs the transaction using their wallet.

→ pSTAKE Backend (Callback Servers):

  1. The custodian’s indexing service (Cobo) detects the transaction and issues a notification to the pSTAKE server.

→ Cobo Backend (Custody Provider):

  1. An API queries the callback to verify its validity.

→ Accounting Contract:

  1. If the data is valid, the API updates the account contract for the user, updating their balance.

→ Return to the Cobo Backend (Custody Provider):

  1. An acknowledgment is sent back to Cobo, indicating that the deposit has been successfully processed.

Pushing BTC Yield Forward for BTCfi

With the first version of the pSTAKE Bitcoin Liquid Staking solution almost live, we look forward to enabling BTC deposits and withdrawals on the pSTAKE dashboard. The first version will serve as the foundation for our fully featured BTC liquid staking solution, eventually providing multiple yield sources for holders and minting a yield-bearing yBTC token.

pSTAKE intends to innovate and make BTC a yield-generating asset, helping it become more capital-efficient for everybody. We believe that Bitcoin Staking yields will eventually become the industry standard for BTC yields, especially with institutions now pouring billions into BTC, which is sitting on the sidelines.

Our Mission: Bring yields to BTC hodlers.

Our Product: Bitcoin Liquid Staking and yBTC everywhere.

Our Purpose: Pushing BTC Yield forward for BTCfi.

Join us on this exciting journey as pSAKE leads the push for bringing BTC yields to the number-one ranked ecosystem.

About pSTAKE Finance:

pSTAKE Finance is a Bitcoin Yield and Liquid Staking protocol, backed by Binance Labs.

With pSTAKE Finance, users can liquid stake BTC to get rewards from Babylon’s Trustless BTC staking for securing other app chains while maintaining their liquidity, powered by institutional custody providers like Cobo.

Accessing Bitcoin yields should not be complex, risky, or unsafe. With four years of liquid staking expertise and expert-curated yield strategies, pSTAKE Finance helps individuals and institutions put their BTC to work in BTCfi.

pSTAKE Finance has partnered with leading blockchain security firms, such as Halborn, Hexens, Oak Security, Immunefi, Forta, and more, to offer a secure liquid staking product suite.

PSTAKE is the governance and incentivization token of the pSTAKE Finance protocol. It has some of the most prominent investors, including Binance Labs, DeFiance Capital, Spartan Group, Coinbase Ventures, and Kraken Ventures.

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