In a bold move into the blockchain ecosystem, DeFi Technologies, based in Toronto, has unveiled plans to launch a validator node on Core Chain, staking nearly $100 million worth of Bitcoin (BTC) in the process.
The decision comes on the heels of DeFi Technologies’ successful launch of Scandinavia’s first yield-bearing BTC Exchange-Traded Product (ETP) back in May. This move underscores their commitment to integrating traditional finance with cutting-edge blockchain technology.
By deploying a validator node on Core Chain, DeFi Technologies aims to earn rewards from validating transactions and staking rewards through its subsidiary, Valour. The Core Chain platform utilizes an Ethereum Virtual Machine-compatible consensus mechanism on its layer-1 BTC-powered blockchain, facilitating seamless staking operations.
Olivier Roussy Newton, CEO of DeFi Technologies, highlighted the strategic importance of this initiative, stating, “We are advancing our mission to bridge traditional finance with innovative blockchain technology. This approach offers our investors unique exposure to yield and growth within the digital asset space.”
Stakers participating in Core Chain’s ecosystem retain custody of their BTC holdings throughout the lockup period and earn rewards in CORE tokens. These rewards, which include a robust 11.66% reward rate on staked CORE, are reinvested back into the product, enhancing overall returns.
Security measures are bolstered by distributing 50% of BTC mining hash power to the blockchain itself, ensuring robust network integrity. Prior to DeFi Technologies’ stake, Core had already accumulated over 2,800 BTC in staked assets.
This collaboration marks the second phase of cooperation between DeFi Technologies and Core. Previously, on May 10, they successfully launched the Valour Bitcoin Staking ETP on the Nordic Growth Market exchange, denominated in Swedish krona.
The Valour Bitcoin Staking ETP is heralded as the first yield-bearing BTC ETP, offering investors exposure to Bitcoin with an attractive 5.65% yield and a nominal management fee of 1.9%. Future plans include launching a Core ETP that leverages BTC staking for additional yield opportunities.
Valour, a subsidiary of DeFi Technologies, also offers ETPs backed by 12 other cryptocurrencies, including Uniswap and Polkadot, as well as a diversified 10-coin basket and the Bitcoin Carbon Neutral (BTCN) product. Notably, some of these offerings feature zero management fees, further enhancing investor appeal.
The pivot towards BTC-centric strategies underscores DeFi Technologies’ strategic shift, cemented by their announcement on June 10 of adopting BTC as their primary treasury reserve asset and acquiring 110 BTC as part of this strategy. This decisive move contributed to a notable 23% surge in DeFi Technologies’ share price following the announcement.
As of May 31, DeFi Technologies boasted a cash balance of $51 million, while Valour managed assets totaling $607 million. This represents substantial growth from Valour’s assets under management (AUM) of $274 million in mid-March 2022, highlighting their rapid expansion and investor confidence in their innovative approach to digital asset management.
