Dual Staking - Unlock Higher APY for BTC Staking
Introduction
Non-Custodial Bitcoin Staking was integrated into the Core blockchain in April 2024, allowing users to stake Bitcoin and earn yield while retaining complete control over their assets. This implementation provides a native mechanism for generating Bitcoin yield without introducing additional trust assumptions.
To further enhance yield generation from Non-Custodial Bitcoin staking at scale, Dual Staking unlocks higher yield tiers by staking Bitcoin and CORE simultaneously. Since daily CORE emissions are fixed, those who stake CORE alongside Bitcoin earn higher reward tiers than those staking Bitcoin alone. The percentage of boost on yield is determined by staking CORE above multiple defined thresholds, with each threshold corresponding to increasing tiers of Bitcoin staking rewards. By linking higher Bitcoin staking rewards with the volume of CORE tokens staked, this approach encourages Bitcoin stakers to make a deeper commitment to the Core ecosystem. It maximizes the yield returns for committed users.
How does Dual Staking Work?
Dual Staking does not alter the staking process for Bitcoin and CORE. For more information on how Non-Custodial Bitcoin Staking works, refer here. Also, consult this detailed guidebook on delegating CORE and staking/redeeming BTC.
Dual Staking creates an opportunity to unlock higher yields when both Bitcoin and CORE are staked simultaneously, with varying CORE staking thresholds corresponding to different yield boost levels on Bitcoin staking rewards on the Core blockchain.
Bitcoin holders can stake their Bitcoin through Core's Non-Custodial Bitcoin Staking to accumulate CORE rewards. By subsequently staking their CORE tokens at different Dual Staking thresholds, users unlock higher tiers of Bitcoin yields, paid in CORE. While Dual Staking enhances Bitcoin staking rewards, it does not impact the yield generated by CORE staking itself.
To enable higher yields for Bitcoin staking through Dual Staking, users must meet the following requirements:
- Stake both CORE and Bitcoin simultaneously, ensuring that the amount of CORE staked exceeds the minimum dual staking threshold AND
- The CORE staking wallet address must match the designated CORE rewards address for Bitcoin staking to which the yield is paid.
Boosted Yield Thresholds
Currently, Satoshi Plus rewards are allocated via three pools, one for each of the three entities participating in the election of Core validators, namely (1) Hash Power Delegators, (2) Bitcoin Stakers, and (3) CORE Stakers.
Dual Staking does not affect these reward pools, but does enable Bitcoin stakers who also stake CORE tokens to earn a higher proportion of rewards in the Bitcoin Staking pool. In this section, we cover in detail the working of the grading algorithm with respect to dual staking.
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Boosted Yield Levels
Under Dual Staking, there are 3 boosted yield tiers for Bitcoin Staking based on the proportion of CORE staked relative to Bitcoin staked. For Solo-Stakers of only Bitcoin, a fourth tier exists with the lowest Bitcoin staking rate. It is important to note that the annual reward rate for Bitcoin Staking can fluctuate significantly, often due to varying prices and other market dynamics. As a result, the actual boosted yields may change daily based on market conditions.- PBASE = the BTC staking base rate
- PLevel1 = the BTC staking base rate + Level 1 boosted yield
- PLevel2 = the BTC staking base rate + Level 2 boosted yield
- PLevel3 (PMAX) = the BTC staking base rate + Level 3 boosted yield
Effectively, the CORE emissions are distributed pro rata based on the BTC TVL, weighted based on their dual staking tier (CORE:BTC).
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Staked CORE Thresholds and Staking Ratios (R1, R2, R3)
The deciding mechanism for a Bitcoin staker’s yield tier (PBASE, PLevel1, PLevel2, or PLevel3 (PMAX)) is based on CORE tokens staked relative to Bitcoin staked, where R represents theCORE:BTC
Ration and R3 > R2 > R1. The current CORE:BTC staking ratios are as follows:- Staking Ratio R1 = 1,000 CORE per 1 BTC
- Staking Ratio R2 = 3,000 CORE per 1 BTC
- Staking Ratio R3 = 8,000 CORE per 1 BTC
Keeping these ratios in mind, users can calculate the required threshold for each tier as follows:
- Staked CORE Threshold for PLevel1 = BTC staked quantity * Staking Ratio (R1)
- Staked CORE Threshold for PLevel2 = BTC staked quantity * Staking Ratio (R2)
- Staked CORE Threshold for PLevel3 (PMAX) = BTC staked quantity * Staking Ratio (R3)
The staked CORE and/or staked Bitcoin can be distributed across multiple active Core validators.
- Boosted yield level determination for each (1) staked Bitcoin
- If staked CORE amount < R1, the user is in tier PBASE
- If R1 =<R< R2, the user enters tier PLevel1
- If R2 =< staked CORE amount R < R3, the user enters tier PLevel2
- If staked CORE amount >= R3, the user enters tier PLevel3 (PMAX)
Staking ratios and the number of levels are configurable and subject to change by governance vote.
Example
The following is a simple example explaining how to calculate the required CORE to stake, based on the above mentioned parameters, to unlock boosted yield tiers for Dual Staking.
Now, the user will have to stake CORE as per the following Staked CORE Thresholds to enjoy a higher yield on their staked BTC with the above variables:
- Staking Ratio R1 = 1,000
- Staking Ratio R2 = 3,000
- Staking Ratio R3 = 8,000
- Staked BTC quantity = 10 BTC
The Staked CORE Thresholds with the above variables are:
- Staked CORE Threshold for PLevel1 = 10 * 1,000 = 10,000 staked CORE
- Staked CORE Threshold for PLevel2 = 10 * 3,000 = 30,000 staked CORE
- Staked CORE Threshold for PLevel3 = 10 * 8,000 = 80,000 staked CORE
Hence, the staked BTC in this example will enjoy a yield of
- PBASE if the amount of staked CORE is below 10,000
- PLevel1 if the amount of staked CORE is above or equal to 10,000 but below 30,000
- PLevel2 if the amount of staked CORE is above or equal to 30,000 but below 80,000
- PLevel3 (PMAX) if the amount of staked CORE is above or equal to 80,000
The multiplier on each boosted yield tier is dynamic and subject to change as per the supply and demand conditions of the market
For your new dual staking tier to take effect, you may need to follow two steps. This applies to users who already have BTC staked in earlier rounds at 00:00 am UTC and decide to stake additional CORE to move up tiers. First, after staking CORE, wait until the next 00:00 UTC. Then, claim all your rewards anytime after 00:00 UTC to reset the tier calculation system. Your new tier will activate as soon as you complete the claim. Both steps are essential to ensure your new tier takes effect.
What Changes with Dual Staking?
From the perspective of how staking is performed, nothing fundamentally changes with Dual Staking. Users can still stake Bitcoin and CORE independently; however, by staking both Bitcoin and CORE simultaneously, they unlock the potential for higher returns on Bitcoin staking. Staking both assets is not mandatory but an optional enhancement for Bitcoin holders seeking to maximize their yield. Think of this as a reward boost, where Bitcoin stakers will receive enhanced rewards as they increase the amount of CORE staked.
Dual Staking strengthens the relationship between Bitcoin and the Core blockchains, aligning incentives and value across both ecosystems. It offers increased rewards for those who actively participate in both staking options without introducing any new requirements or complexities to the staking process.
Key Features of Dual Staking
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Increased Rewards Through CORE Staking: Bitcoin stakers can now stake CORE tokens alongside Bitcoin to unlock higher Bitcoin staking yields. To earn these enhanced staking rates, Bitcoin stakers are required to stake CORE above a certain threshold.
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Cumulative Reward Boost: Once Dual Staking is adopted, Bitcoin stakers will receive higher rates as they increase the amount of CORE staked. This means stakers can maximize their returns by staking more CORE.
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Risk-Free and Non-Custodial Staking: Core’s Non-Custodial Bitcoin Staking enables users to maintain complete ownership of their assets throughout the staking process. Bitcoin remains securely in the user’s wallet and is unlocked when their chosen lock period expires. No external entity ever gains custody of the staker’s Bitcoin. Meanwhile, in exchange for stakers locking up their Bitcoin, they can delegate to Core validators that secure CORE and earn rewards. This setup eliminates custodial risk and enhances security, as stakers participate in Core’s security without putting their Bitcoin at risk.
Who Can Benefit from Dual Staking?
Dual staking is designed for everyone, from individuals to the largest financial institutions, who want to earn higher Bitcoin staking rates. In addition to Bitcoin holders, Bitcoin miners can also leverage Dual Staking to optimize their earnings.
Bitcoin Miners can earn CORE rewards by delegating their hash power to validators on the Core network and staking their Bitcoin and CORE tokens. They can unlock higher yields on their Bitcoin treasuries by staking CORE tokens over the minimum dual staking threshold. Integrating mining rewards with the Dual Staking mechanism allows miners to maximize returns on mining and staking activities.
Please refer to the Dual Staking FAQ section for further questions or clarifications. For additional support, you may direct your queries to the Core Dev Forum or Core Discord Server.
Conclusion
Dual Staking is a mechanism for providing sustainable Bitcoin staking rates at scale on Core. Further establishing Core as the leading end-to-end BTCfi platform, the CORE token is becoming the key to unlocking sustainable yield for Bitcoin.