Compiled by: Yuliya, PANews
As a value storage asset managing about $2 trillion in wealth, Bitcoin is being considered by various countries as part of their strategic reserves. Against this backdrop, PANews exclusively interviewed Rich Rines, an early contributor to Core DAO, to deeply explore how to drive Bitcoin's transformation from a simple store of value to a productive asset through innovative scalability solutions.
Background Introduction
PANews: How did you get into the Bitcoin field?
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 importance, as I was attracted to Bitcoin's potential as a non-sovereign store of value (or digital gold).
By 2017, I was working full-time in the cryptocurrency industry, serving as the Head of Funds Engineering at Coinbase for four years. The reason I later joined Core was that I saw no one was addressing Bitcoin's scalability issues. We felt that cryptocurrencies had deviated from the original decentralization ideology, so we decided to start with the most decentralized asset, Bitcoin, and focus on solving its scalability problem.
PANews: Our experiences are quite similar. I started learning about Crypto in 2014, and fully immersed myself in the crypto industry in 2017, launching PANews. Bitcoin's breakthrough to $100,000 was an important milestone. What do you think drove this achievement?
Rich:
Bitcoin has now become 'too big to fail'. Its legitimacy has been recognized, and it has become a part of the traditional financial system, no longer just an alternative. It now primarily serves as a store of value asset, managing about $2 trillion in wealth, with Bitcoin becoming a collateral asset in the billions, and even countries considering it as a strategic reserve. I believe its market capitalization can at least match or exceed that of gold in the future. With tools like ETFs, Bitcoin has become more accessible, and Core is further providing faster and lower-cost scalability solutions.
Motivation for Establishing Core DAO
PANews: The approval of the Bitcoin ETF seems to be a watershed moment for Bitcoin. What inspired you to establish Core DAO?
Rich:
Core was founded by a group of initial contributors. We observed that the entire cryptocurrency industry had deviated from the original decentralization intent. Notably, Bitcoin is the first stop for most people entering the cryptocurrency space, even if they later move on to Ethereum or Solana, Bitcoin remains the common starting point. We wanted to return to Bitcoin's original mission. But after in-depth research and analysis, we found that certain functionalities cannot be achieved on the Bitcoin base layer. Bitcoin as a settlement layer indeed has the characteristics of being slow, expensive, and inflexible, but it is precisely these characteristics that make it a high-quality store of value.
Over the past decade, I've also bought 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 Bitcoin to billions of people. Core's mission is to enable billions of people 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 truly achieving mass adoption of Bitcoin.
Introduction to CoreDAO
PANews: Can you introduce Core DAO to Chinese readers in a simple and easy-to-understand way?
Rich:
Core is actually composed of two main parts. The first part is the Bitcoin staking product, 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 tens of thousands of daily active users.
In our ecosystem, there are already over 100 decentralized applications running, and many more are in development and expected to launch soon. Our goal is to enable Bitcoin to play a role and allow users to participate in Bitcoin DeFi. Currently, about 80-90% of Core's TVL is in the form of Bitcoin, where users can stake Bitcoin and also use Bitcoin as gas fees, which are typical L1 chain mechanisms, but we are building an ecosystem based on Bitcoin.
We launched the world's first Bitcoin staking product in early April 2024. There are currently about $800 million in Bitcoin earning passive income on our platform. The unique feature of this product is that it is non-custodial, so users don't have to worry about multi-sig or trust issues. In November 2024, we also launched a dual staking mechanism, where users can hold both CORE and BTC to earn higher yields.
We've taken an incremental approach. You can think of passive staking as an "entry-level product" - users first earn yields through passive staking, and then can participate in dual staking to earn higher yields by holding CORE tokens, gradually becoming more active. Over time, as we roll out features like trustless bridges, users will be able to more seamlessly enter the full Core ecosystem.
For many Bitcoin holders, they may not be ready to fully immerse themselves in the DeFi world, and they prefer the simple staking to earn passive income. For those who are ready, we welcome them to directly participate in the full 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 biggest concern. How does Core ensure security?
Rich:
Security is indeed the most important consideration. We advise everyone to understand the trust assumptions and the source of yields before participating in Core or any ecosystem that offers Bitcoin yield products. If you cannot easily explain these basic questions, you should not participate.
I have too many friends who have lost funds on platforms like BlockFi, Genesis, and Celsius due to custody issues, so relinquishing asset custody is absolutely unacceptable. This is why Core's Bitcoin staking product is designed by Bitcoin holders for Bitcoin holders. This means it is completely non-custodial - you only need to lock your Bitcoin to yourself through a time-lock mechanism, and you only need to trust Bitcoin itself. This is crucial in our partnerships with institutions like BitGo and HexTrust.
These institutions want to ensure the product truly suits the needs of Bitcoin holders, not those who may have just come from Ethereum, Solana, or other staking assets, as they are already accustomed to different trust assumptions. Bitcoin holders will not accept these compromises. This is the first point - you only need to trust Bitcoin.
PANews: Many people's next question would be: where do the yields come from? How to understand these yields?
Rich:
This is where the dual staking becomes important. Core has an 81-year inflation cycle, which is a very slow decreasing process, quite unique in the crypto asset space. This is because Core was initially designed as the second block reward for Bitcoin, which means that the current 75% of Bitcoin hashrate committed to Core will continue to receive these rewards, helping to cover operating costs and maintain the security and decentralization of the Bitcoin ecosystem.
This inflation curve is also the source of the yields, as the yields are paid in the same place in two different places. We pay in CORE tokens, which have a fixed total supply of 21 billion, and the amount will not increase or decrease regardless of how much Bitcoin or Core enters the system.
Now, through dual staking, you've created another demand driver for CORE tokens, which helps to increase the yield rate. You can think of it this way:
You are helping to secure the Core chain. If you only use Bitcoin to do this, the yield rate will be lower. If you protect the security of the chain on both the Bitcoin and Core sides, you can earn a higher yield rate, and you only need to understand the CORE token.
We've put a lot of work into making the product development so simple, which is why there has been so much adoption, because it truly meets the users' needs and provides the products and services they want.
Institutional Adoption of the CoreFi Strategy
PANews: In addition to retail investors, you mentioned that institutions have also started to adopt dual staking. We previously reported that a listed company called DeFi Technology has launched a CoreFi strategy, which is similar to MicroStrategy's strategy of accumulating Bitcoin. Why do you think this company adopted this strategy? How does it help the development of Core?
Rich:
They have already announced CoreFi and plan to launch it in early Q1. Although it is not yet officially operational, the imminent launch of this project is a testament to 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 their support for dual staking.
People now have a better understanding of the returns and sustainability of Core. Previously, there were doubts about whether these returns were real and sustainable, but the driving factors have become clearer now. We see these institutions are very excited about this new use case for CORE tokens. In essence:
CORE tokens can now not only be used for staking, paying Gas fees, and governance, but also as a way to generate ongoing returns on Bitcoin. This is a new and unique feature of CORE tokens that no one has been able to achieve before.
With the participation of these institutions, we will drive 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 narrative, but also increase the overall demand for CORE tokens, which will be very beneficial for the shareholders of this entity.
The Institutionalization of CORE
PANews: Institutional adoption has always been a key factor in the success of Bitcoin. What progress and future plans does Core have in terms of institutionalization?
Rich:
We have recently announced collaborations with several custodial institutions, including BitGo and Copper, which are crucial in solving the access problem. This is because many large Bitcoin holders must go through these custodial institutions to perform staking operations. This has solved the historical access barrier.
On the other hand, institutional investors are evaluating the attractiveness of this strategy. Each fund and institution has its own return targets and focus areas. We are seeing more and more institutions expressing a desire to generate returns on their Bitcoin, but without directly engaging in DeFi, and this is where dual staking becomes a great option.
They are adopting this strategy on a large scale because it not only allows them to generate returns on their Bitcoin, but also potentially venture capital-like returns on Core assets. This is attractive for institutions willing to take directional risk. As more institutions understand and participate in these transactions, I believe this narrative will continue to evolve, as this is one of the best asset appreciation opportunities in the Bitcoin ecosystem, without compromising the security of the Bitcoin principal.
The Development Prospects of Core DAO
PANews: As a member of the blockchain ecosystem, how do you evaluate the success of a blockchain project? What key metrics is Core most focused on?
Rich:
As an infrastructure project, this is a challenging question. The metrics the market focuses on may not be fully aligned with actual success. For example, TVL (Total Value Locked) and daily active users - Core is number one in both of these metrics. But these do not fully reflect whether the business is successful.
We are more focused on:
- User retention rate
- Whether the project ecosystem is developing healthily
- Whether there is real transaction volume and activity
Many Bitcoin scaling solutions may have high TVL, but are actually "empty chains". So we need to consider multiple metrics comprehensively, as a single metric can be manipulated. We are more focused on product-market fit, taking a product-driven rather than pure research-driven 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 that are committed to developing substantive businesses on Core. Unlike other L1/L2 projects, Core builders are generally more focused on long-term development. Notably, Core does not have a traditional grant program, but rather uses a more Web2-like referral or reward mechanism: builders need to become part of the incentive program by contributing actual user volume, TVL, and other value to receive corresponding rewards.
For Bitcoin, I think technical progress like new OpCodes in the Bitcoin core development may be slower than people expect. This is a politically charged and slow process, although this caution is important to ensure Bitcoin's security. I expect there will be no new OpCodes by 2025, possibly until 2026. However, I believe BitVM2 or BitVMX will be launched on the mainnet in 2025, which is very exciting.
Bitcoin has already gained a solid product-market fit as a collateral asset, attracting not only fund institutions, but now also countries. Core is driving the next stage of development - making Bitcoin a collateral asset for the 3-4 billion unbanked or underbanked people globally.
We hope to see people using Bitcoin as collateral on Core-like scaling solutions to obtain stablecoins and leverage. This could be the next wave of Bitcoin adoption, with the potential to grow 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.
