Compiled by: Yuliya, PANews

As a store of value managing approximately $2 trillion in wealth, Bitcoin is being considered by various countries as part of their strategic reserves. Against this backdrop, PANews exclusively interviews Core DAO early contributor Rich Rines to explore how innovative scalability solutions can drive Bitcoin's transformation from a mere store of value to a productive asset.

Background Introduction

PANews: How did you get into the Bitcoin space?

Rich:

I first encountered Bitcoin in 2013. Although I had heard about it from a university professor in 2011, it wasn't until 2013 that I truly understood its significance, as I was drawn to Bitcoin's potential as a non-sovereign store of value (or digital gold).

By 2017, I was working full-time in the cryptocurrency space, serving as the head of liquidity engineering at Coinbase for four years. I joined Core because I saw that no one was addressing Bitcoin's scalability issues. We believed that the cryptocurrency space had deviated from its original decentralized ideals, so we decided to start with Bitcoin, the most decentralized asset, to tackle its scalability challenges.

PANews: Our experiences are quite similar; I learned about crypto in 2014 and fully immersed myself in the crypto industry in 2017, launching PANews. Bitcoin breaking the $100,000 mark is a significant milestone. What do you think drove this achievement?

Rich:

Bitcoin is now "too big to fail." Its legitimacy has been recognized, and it has become part of the traditional financial system, no longer just an alternative. It now primarily serves as a store of value, managing about $2 trillion in wealth. Bitcoin has become a collateral asset, with even nations considering it as a strategic reserve. I believe its market cap will at least match that of gold in the future, or even exceed it. With tools like ETFs, Bitcoin has become more accessible, and Core further provides faster and lower-cost scalability solutions.

Motivation for Establishing Core DAO

PANews: The approval of Bitcoin ETFs seems like a watershed moment for Bitcoin. What motivated you to establish Core DAO?

Rich:

Core was founded by a group of initial contributors. We observed that the entire cryptocurrency industry had strayed from its decentralized intent. Notably, Bitcoin is the first entry point for most people into the cryptocurrency space. Even if some later turn to Ethereum or Solana, Bitcoin remains a common starting point. We wanted to return to Bitcoin's original mission. However, after in-depth research and analysis, we found that implementing certain functionalities on Bitcoin's base layer is impossible. Bitcoin, as a settlement layer, indeed has slow, expensive, and inflexible characteristics, but it is precisely these traits that make it a high-quality store of value.

Over the past decade, I have also purchased some very expensive Bitcoin. But now, Bitcoin's positioning has shifted from the initially envisioned medium of exchange to a collateral asset. People can use it to borrow stablecoins, which is the right way to introduce billions to Bitcoin. Core's mission is to enable billions to use Bitcoin. Although we are still in a very early stage, we are passionate about this. We believe that the model of using Bitcoin as collateral to obtain stablecoins is the key to achieving widespread adoption of Bitcoin.

Introduction to Core DAO

PANews: Can you explain Core DAO in a simple and understandable way for Chinese readers?

Rich:

Core actually consists of two main parts. The first part is Bitcoin staking products, and the second part is the Bitcoin ecosystem built on EVM. In terms of the ecosystem, Core is currently the largest Bitcoin ecosystem on EVM, with over $1 billion in total locked value (TVL) and hundreds of thousands of daily active users.

In our ecosystem, there are already over 100 decentralized applications running, with more applications in development and expected to launch soon. Our goal is to enable Bitcoin to work and allow users to participate in Bitcoin DeFi. Currently, about 80-90% of Core's TVL exists in the form of Bitcoin, allowing users to stake Bitcoin and use it as gas fees. These are typical L1 public chain mechanisms, but we are building an ecosystem based on Bitcoin.

We launched the world's first Bitcoin staking product in early April 2024. Currently, about $800 million in Bitcoin is earning passive income on our platform. What makes this product special is that it is non-custodial; users do not need to worry about multi-signature or trust issues. In November 2024, we will also launch a dual-staking mechanism, allowing users to hold both CORE and BTC to earn higher returns.

We take a gradual approach. You can think of passive staking as an "entry product"—users first earn income through passive staking and then can participate in dual staking by holding CORE tokens for higher returns, gradually making users more active. Over time, when we launch trustless bridging and other features, users will be able to enter the complete Core ecosystem more freely.

For many Bitcoin holders, they may not be ready to fully dive into the DeFi world; they prefer to earn passive income through simple staking. For those who are ready, we welcome them to directly participate in the complete ecosystem. The core idea is to make your Bitcoin truly work, and Core is providing greater scalability for Bitcoin.

Dual Staking

PANews: For many Bitcoin holders, security is their primary concern. How does Core ensure security?

Rich:

Security is indeed the most important consideration. We advise everyone to understand the trust assumptions and sources of income before participating in Core or any ecosystem offering Bitcoin yield products. If you cannot easily explain these basic issues, you should not participate.

I have too many friends who lost funds on platforms like BlockFi, Genesis, and Celsius due to custody issues, so relinquishing asset custody is absolutely unacceptable. That’s why Core's Bitcoin staking products are designed by Bitcoin holders for Bitcoin holders. This means it is completely non-custodial—you only need to lock Bitcoin for yourself through a time-lock mechanism, and you only need to trust Bitcoin itself. This is crucial for our partnerships with institutions like BitGo and HexTrust.

These institutions want to ensure that the products truly meet the needs of Bitcoin holders, not those who may have just transitioned from other staking assets like Ethereum or Solana, as the latter are accustomed to different trust assumptions. Bitcoin holders will not accept these compromises. That’s the first point—you only need to trust Bitcoin.

PANews: Many people's next question is: Where does the yield come from? How should these yields be understood?

Rich:

This is where the importance of dual staking comes in. Core has an 81-year inflation cycle, which is a very slow diminishing process, unique among crypto assets. Because Core was initially designed as the second block reward for Bitcoin, it means that 75% of the Bitcoin hash power currently delegated to Core will continue to receive these rewards, helping them cover operational costs and maintain the security and decentralization of the Bitcoin ecosystem.

This inflation curve is also the source of yield, as the same yield is paid in two places. We pay in CORE tokens, with a fixed total supply of 2.1 billion, regardless of how many Bitcoin or Core enter the system; there will be no inflation or deflation.

Now, through dual staking, you create another demand driver for CORE tokens, which helps increase yields. You can understand it this way:

You are helping to secure the Core chain. If you only use Bitcoin to do this, the yield will be lower. If you protect the chain's security on both the Bitcoin side and the Core side, you can achieve higher yields, and you only need to understand the CORE token.

We have invested a lot of work in product development to make it this simple, which is why there has been so much adoption, as it truly meets user needs and provides the products and services they want.

Institutional Adoption and CoreFi Strategy

PANews: Besides retail investors, you mentioned that institutions are also starting to adopt dual staking. We previously reported that a publicly traded company called DeFi Technology launched a CoreFi strategy, similar to MicroStrategy's strategy of accumulating Bitcoin. Why do you think this company adopted such a strategy? How does this help Core's development?

Rich:

They have announced CoreFi and plan to launch it in early Q1. Although it is not officially running yet, the upcoming launch of this project fully demonstrates the DeFi team's confidence in the Core ecosystem. This is just one example of many institutional collaborations, as other institutions like HashNode have also publicly expressed support for dual staking.

Now, people have a better understanding of Core's yields and sustainability. There have always been doubts about whether these yields are genuinely sustainable, but now the demand drivers have become clearer. We see that these institutions are very excited about this new use case for CORE tokens. You can understand it this way:

CORE tokens can now be used not only for staking, paying gas fees, and governance but also as a way for Bitcoin to continuously generate yields. This is a unique new function of CORE tokens that has never been achieved before.

With the participation of these institutions, we will push this narrative forward. CoreFi will adopt a strategy similar to MicroStrategy's to acquire CORE tokens, primarily to serve dual staking. This will not only advance the development of this narrative but also increase the overall demand for CORE tokens, which will be very beneficial for the shareholders of that entity.

Institutionalization of CORE

PANews: Institutional adoption has always been a key factor in Bitcoin's success. What progress and future plans does Core have in terms of institutionalization?

Rich:

Recently, we have announced partnerships with several custody institutions, including BitGo and Copper, which are crucial for addressing access issues. Many large Bitcoin holders must use these custody institutions to perform staking operations. This resolves historical access barriers.

On the other hand, institutional investors are evaluating the attractiveness of this strategy. Each fund and institution has its own yield targets and areas of focus. We are seeing more and more institutions expressing a desire to generate yields from their Bitcoin without wanting to directly participate in DeFi, making dual staking a great option.

They are adopting this strategy on a large scale because it not only allows them to earn yields based on Bitcoin but also potentially achieve venture capital-like returns on Core assets. This is appealing to institutions willing to take directional risks. As more institutions understand and engage in this trading, I believe this narrative will continue to develop, as it represents one of the best asset appreciation opportunities in the Bitcoin ecosystem without compromising the safety of the Bitcoin principal.

Prospects for Core DAO

PANews: As a part of the blockchain ecosystem, how do you measure the success of a blockchain project? What key metrics does Core focus on?

Rich:

As an infrastructure project, this is a challenging question. The metrics that the market focuses on may not be entirely related to actual success. For example, TVL (Total Value Locked) and daily active users—Core ranks first in both of these metrics. However, these do not fully reflect whether the business is successful.

We focus more on:

• User retention rate
• Whether the project ecosystem is developing healthily
• Whether there is real trading volume and activity

Many Bitcoin scaling solutions may have high TVL but are essentially "empty chains." Therefore, it is necessary to consider multiple metrics comprehensively, as a single metric can be manipulated. We place greater emphasis on product-market fit, adopting a product-oriented rather than purely research-oriented approach. This approach has worked well so far, and we will continue to develop in this direction.

PANews: What are your expectations for the future development of Bitcoin and Core?

Rich:

The Core community is quite diverse, with builders from all over the world. Our core goal is to find and support teams dedicated to developing substantial businesses on Core. Unlike other L1/L2 projects, Core builders generally focus more on long-term development. Notably, Core does not have a traditional funding program; instead, it adopts a model closer to Web2 referral programs or reward mechanisms: builders need to contribute real value, such as bringing actual user volume and TVL, to be part of the incentive program and receive corresponding rewards.

Regarding Bitcoin, I believe that technological advancements in Bitcoin core development (such as new OpCodes) may progress more slowly than people expect. This is a highly political and slow process, and while this caution is important for ensuring Bitcoin's security, I anticipate that there will be no new OpCodes in 2025, possibly waiting until 2026. However, I believe that BitVM2 or BitVMX will go live on the mainnet in 2025, which is quite exciting.

Bitcoin has already achieved a solid product-market fit as a collateral asset, appealing not only to fund institutions but now also to nations. Core is driving the next phase of development—making Bitcoin a collateral asset for the 3 to 4 billion unbanked or underbanked people globally.

We expect to see people using Bitcoin as collateral to obtain stablecoins and leverage on scaling solutions like Core. This could be the next wave of Bitcoin adoption, potentially growing Bitcoin holders from millions to billions. This is a mission that will take a decade to fully realize, but we are already moving in that direction.

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