DeFi
pSTAKE Finance, Backed by Binance, Launches Liquid Bitcoin Staking Solution
Binance Labs-backed liquid staking protocol pStAKE Finance has unveiled its liquid staking solution for Bitcoin in the latest development for Bitcoin-native decentralized finance (DeFi).
pSTAKE Finance’s solution, built on Babylon’s Bitcoin staking protocol, aims to simplify the Bitcoin staking process and provide additional yield generation opportunities for Bitcoin (BTC) holders.
The protocol set out to create Bitcoin-based staking solutions from a core belief in the world’s oldest cryptocurrency, with the aim of making it a yield-generating asset, according to Mikhil Pandey, co-founder and Strategy Director of pSTAKE Finance.
Pandey told Cointelegraph:
“Having a fundamental faith and belief in Bitcoin, the returns, and constantly identifying and solving crucial problems in this industry are some of the reasons that drive us to move in the direction of Bitcoin. The opportunity to make Bitcoin a yield-generating asset, something that didn’t exist on its own, is very exciting. Yield-generating Bitcoin is powerful for all ecosystems and not just L2 Bitcoin.
The initiative is part of a broader movement known as Bitcoin DeFi (BTCFi), which aims to bring DeFi capabilities to the world’s leading blockchain network.
Investor interest in Bitcoin-native DeFi solutions has started to grow with the halving in 2024which also saw the launch of Bitcoin Runes — a new protocol for issuing fungible tokens on the Bitcoin network.
The independent venture capital (VC) arm of Binance, Binance Labs also focused on BTCFi ahead of the halving after announcing an investment in Bitcoin-native restoration protocol BounceBit on April 11.
Related: BTCFi is a “huge opportunity” to make Bitcoin a productive asset — Stacks
The launch of the liquid staking solution marks pSTAKE’s first effort in Bitcoin-native DeFi, having built its liquid staking protocol on Cosmos over the past three years.
BTCFi makes Bitcoin a yield-generating asset for the first time.
pSTAKE’s new solution is one of many protocols aimed at making Bitcoin a yield-generating asset.
In early May, Hermetica announced the launch of the first-ever Bitcoin-backed synthetic US dollar with yield generation capabilities. Scheduled for release in June, the new synthetic dollar, USDh, will offer users returns of up to 25%.
According to the pStake co-founder, the BTCFi industry is seeing the culmination of various promising products that make Bitcoin more capital efficient. However, he believes that there is still development to be done before BTCFi can match DeFi to the level of Ethereum. Pandey explained:
“Ethereum’s technology had to go through a lot of evolution before the true DeFi summer in 2020. The Bitcoin DeFi landscape will likely follow a similar path of development and progress before seeing a full-fledged BTCfi summer.”
However, making Bitcoin a more versatile asset presents a significant financial opportunity, Pandey added:
“With less than 1% of Bitcoin’s market cap in DeFi today, we could see enormous growth as we develop safer and more reliable ways to generate yield on Bitcoin.”
Related: Stacks Active Accounts Hit All-Time High Amid Growing Interest in Bitcoin DeFi