Merge Staking
Last updated
Last updated
The Merge Staking is a cornerstone of b14g's strategy in making BTC a productive financial tool, and expanding the BTCFi ecosystem.
Merge Staking empowers protocols with protocol-owned security by harnessing Bitcoin’s unparalleled economic power. At its core, Merge Staking enables the combination of Bitcoin (BTC) with a protocol's native tokens to enhance security and maximize token utility. This staking model allows protocols to secure their networks using BTC while simultaneously boosting the value and utility of their native tokens, creating a sustainable path for long-term growth and stability.
In today’s crypto landscape, many protocols initially rely on BTC to bootstrap security. While this approach provides a solid foundation, it often sidelines native tokens, preventing them from achieving meaningful utility and long-term relevance. Over time, without a defined role, these native tokens risk becoming undervalued and obsolete.
The Challenge:
BTC/ETH Restaking: Uses established assets (BTC/ETH) for security at low cost, but offers no direct benefit to the native token’s utility.
Pure Native Token Staking: Can enhance token utility but often relies on inflationary mechanics, diluting token value and straining the protocol’s resources.
The Merge Staking Solution:
Merge Staking strikes a balance, leveraging Bitcoin’s economic power alongside native tokens. This method delivers high utility at low cost, eliminating the need for continuous token inflation and ensuring both token value and protocol security are sustained over the long term.
Users Stake Assets on b14g: Stakers deposit their native tokens and BTC into the b14g Merge Staking protocol.
Delegation to Operators: The staked assets are delegated to operators who handle validation services, ensuring the network’s security.
Operators Validate for BVS: Operators provide validation services to application protocols, also known as Bitcoin Validated Services (BVS). These BVS are secured by the economic strength of staked BTC and native tokens.
Reward Distribution: When BVS pay out rewards for the validation services, those rewards are split among Stakers, Operators, and b14g. This aligns incentives across all participants, ensuring everyone benefits as the network grows.
Define Merge-Staking Model: Protocols customize their Merge Staking model—choosing which token pairs to merge, setting merge ratios, and defining yield tiers. This flexibility allows protocols to optimize their security posture and token economics.
Integrate Merge Staking: Protocols implement merge modules (e.g., staking reward logic, slashing conditions) on their platforms. This integration ensures a seamless staking experience while maintaining security and compliance with the protocol’s rules.
Track TVL Growth: As users participate in Merge Staking, protocols can monitor the Total Value Locked (TVL). A higher TVL indicates stronger security, greater liquidity, and increased confidence in the protocol’s long-term viability.
Stakers have three main ways to engage in Merge Staking:
Direct Staking: Users can directly (re)stake their BTC and native tokens at certain ratio on b14g platform to unlock highest staking yield tiers.
Proof of BTC lock transaction: Users who already stake BTC on existing BTC staking platforms (i.e., CoreDAO, Babylon) can restake it through b14g’s Merge Staking protocol using proof of transaction. This adds another layer of earnings, enhancing their overall yield potential.
Merge Marketplace: The Merge Marketplace helps lower capital barriers. For example, a BTC holder lacking native tokens can create a merge order, specifying reward-sharing ratios. Native token stakers can choose to merge with this order, enabling both parties to reach higher yield tiers without needing additional assets.
