Self-Custodial Bitcoin Staking
Trustless BTC staking, earning yield directly from your Bitcoin without wrapping or giving up custody.
Overview
Self-Custodial BTC Staking is the foundation of b14g’s BTCFi architecture. It allows Bitcoin holders to stake their BTC directly from their own wallets to secure Bitcoin-aligned chains — without wrapping, bridging, or giving up custody.
This mechanism combines Bitcoin’s native timelock script with staking proofs verification on connected networks, creating the first truly trustless, yield-generating staking model for BTC.
Key Feature:
Your BTC never leaves Bitcoin.
The yield you earn comes from providing real economic security to Bitcoin-aligned networks.
How It Works
1. Timelock Mechanism
A Bitcoin Timelock is a feature that allows you to lock your Bitcoin based on time-based conditions. Think of it like a digital “safe”, you can put your BTC inside and set a rule that says “only open at 3PM today” or “open in 5 hours”
Timelocks are an important part of how self-custodial Bitcoin staking or cross-chain security mechanisms work. They make sure that your BTC stays locked and provable on the Bitcoin network during a staking or bonding period, and automatically becomes spendable again when that period ends.
Types of Timelocks: CLTV vs CSV
Bitcoin supports two main types of timelock scripts: CLTV (CheckLockTimeVerify) and CSV (CheckSequenceVerify). They both restrict when BTC can be spent, but they work in slightly different ways.
How Time is Measured
Absolute. Targets a fixed point in the future. Example: "The door opens at 9:00 AM on July 4th"
Relative. Measures time based on how long after a previous event. Example: "The secondary door opens 48 hours after the primary door successfully opened"
Enforcement
Prevents the transaction from being confirmed until that exact time or block height has passed.
Prevents the transaction from being confirmed until a specific duration has passed since the previous one was confirmed.
Example Use Case
Lock BTC with a rule: “This BTC can only be spent after block 900,000.” Before that block, any attempt to move it will be rejected.
Lock BTC with a rule: “This BTC can only be spent after 1,008 blocks (~7 days) once the unbonding transaction is confirmed.”
The countdown begins once the unbonding is confirmed.
Functional Advantage
Best for fixed deadlines, useful when you want a transaction to occur only after a specific block or time.
Best for stringing together chains of transactions, setting relative locks on unconfirmed or unbroadcast transactions, and ensuring they confirm in the expected order regardless of when they’re executed.
Simple Analogy
An absolute lock is like scheduling one email to send at 9:00 AM on July 4th.
A relative lock is like setting up an entire chain of emails where Email 2 sends 48 hours after Email 1 is opened, no matter when Email 1 was originally created.
2. Staking Process Overview
User initiates lock
A BTC holder creates a timelock transaction to lock BTC for a defined duration. During this time, the BTC is completely unspendable.
When creating the timelock transaction, metadata is embedded to:
Indicates which validator/finalty provider you want to support
Specifies a PoS chain-compatible address (e.g., EVM, CosmWasm, etc.) to receive rewards.
Note on Integrations: Depending on the POS chain's design and types of timelocks, some integrations may require the user to construct additional transactions to define more complex logic, such as:
Slashing conditions
Early unbonding rules
Proof Registration
Once your lock is confirmed on Bitcoin, a proof of lock is submitted to the PoS chain’s staking contract by a relayer or verifier. This registers the user’s BTC stake on the target chain.
Reward Accrual
Once registered, the user begins earning yield according to the network’s reward mechanism. Rewards are distributed to the address provided at the beginning of lock inititation.
Unlock
When the timelock expires, the BTC becomes spendable again on Bitcoin mainnet. To continue staking, a new timelock must be created. Note: Some integrations allow early unbonding depending on the PoS chain’s specific design.
Integration
Self-custodial BTC staking serves as a shared primitive across multiple networks. Each chain implements its own integration logic based on its consensus design and staking framework.
Timelock Mechanism
CLTV Timelock
CSV Timelock
BTC Role
Strengthens Core chain’s Satoshi-Plus consensus by anchoring validator security to Bitcoin.
Provides economic security for Babylon’s finality providers that timestamp and finalize other blockchains.
Proof Registra-tion
Verified through Core’s BTC staking Relayers
Verified through Babylon’s Vigilante BTC Staking Trackers
Reward Token
CORE
BABY
Slashing
Not applicable. No slashing risk for BTC stakers.
Yes, capped at 0.1% of the staked amount to deter malicious behavior.
Liquidity
BTC is locked until the timelock expires and only becomes spendable afterward.
Users can unbond early before the timelock ends, but must wait for a 1008-block delay (~7 days) before their BTC becomes spendable again.
Reward Multiplier
Boosted rewards apply when users dual-stake BTC and CORE. If you only have BTC, you can match with CORE stakers on b14g’s Merge Marketplace and share boosted rewards.
Boosted rewards apply when users co-stake BTC and BABY. If you only have BTC, you can match with BABY stakers on b14g’s Merge Marketplace and share boosted rewards.
b14g standardizes this process through a unified interface, letting BTC holders stake once and participate across multiple Bitcoin-aligned chains.
Self-custodial BTC Staking (Core chain)Self-custodial BTC Staking (Babylon)Benefits
True Self-Custody
Your BTC never leaves your wallet or the Bitcoin chain.
Earn Real Yield
Rewards come from real network security, not unsustainable yield farming.
Cross-Chain Flexibility
Same BTC lock can be used across different BTCFi networks.
Transparent & Auditable
All staking proofs and rewards visible on-chain.
Self-Custodial BTC Staking is the core primitive of the b14g BTCFi architecture.
It connects Bitcoin’s native security with emerging L1 and L2 ecosystems — enabling BTC holders to earn yield while maintaining full control of their assets.
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