Interview with Core Blockchain Rich: Leveraging Bitcoin Security to Drive Smart Contracts

Jul 23, 2024

This article is sponsored by Core.

Self-introduction

My passion for crypto began in 2013 when the concept of Bitcoin as a non-sovereign store of value, or digital gold, blew me away. Then, around the 2017 cryptocurrency boom, I fully dove into the space, fascinated by Ethereum and the possibilities its programmability offered when combined with the decentralized system pioneered by Bitcoin.

Fast forward a few years, I navigated my way to Coinbase, where I led the Money Movements Engineering team for three and a half years. My tenure at Coinbase provided me with firsthand experience of the immense innovation, demand, and potential within the crypto sector. Despite the excitement around new blockchain technologies pushing the boundaries, Bitcoin consistently remained the cornerstone of the industry. This consistency reinforced my belief that Bitcoin is here to stay and that long-term success in the crypto space hinges on building with Bitcoin as a foundation.

That philosophy, in addition to my DNA as more of a 0 to 1 guy, led me to Core where unlocking Bitcoin from first principles is a main objective.

Share with us your perspective about Core

Core grew in response to the lack of scalable development being done in the Bitcoin space despite immense value creation in other blockchain sectors. Despite bitcoin being the most dominant asset throughout crypto’s rise, around $1T in bitcoin value has been trapped with little to no yield and no practical platform on which to use it. Filling in both gaps, Core has emerged as a way for bitcoin holders to earn Bitcoin-native yield and also use their bitcoin on cheaper, faster, and more versatile rails that remain secured by the Bitcoin network. Core already has gained ~$265M in bitcoin value currently staked with Core. This foundation makes Core the perfect place for hosting BTCfi as the 100+ dapps are ready to unlock bitcoin as a financial asset beyond being a store of value.

Could you share some details on the contributors to Core?

The Core blockchain is permissionless and built out in the open, so anyone can participate in the development of the ecosystem. Contributors to Core are around the globe, committed to the vision of promoting decentralization and scaling Bitcoin. Many of the most engaged contributors have impressive backgrounds in the blockchain space, hailing from places like Binance, Moon Pay, and Kava Finance, to name a few.

What are your views on the current Bitcoin ecosystem and various Layer 2 scenarios?

The Bitcoin Network stands as the most secure and decentralized network ever created, thanks to its technological and monetary simplicity. Its primary purpose is to convert physical energy into digital gold, establishing bitcoin as the definitive hard money asset. This achievement is a result of perfectly aligned incentives among globally motivated parties. However, this simplicity comes with a trade-off: scalability. Bitcoin’s network is not designed to host complex smart contracts and decentralized applications (dApps), as its primary focus remains on aligning incentives to safeguard the bitcoin asset itself. This presents a unique challenge for scaling Bitcoin compared to other chains that were designed with hyper-scalability in mind from the start. Layer 2 solutions relying on Bitcoin for data availability or settlement must navigate these inherent limitations.

The future of Bitcoin scaling must adopt more creative approaches. By recognizing Bitcoin as an incentive-aligning mechanism, these incentives can be extended to external, parallel, and symbiotic systems. This is the core mission behind Core — leveraging Bitcoin’s security apparatus to power a smart contract platform. By doing so, it enables the effective use of the bitcoin asset while preserving its fundamental principles. This approach ensures that Bitcoin’s unparalleled security and decentralization continue to serve as the foundation for innovative advancements within the ecosystem, bridging the gap between Bitcoin’s inherent simplicity and the growing demands for scalability and functionality in the blockchain space.

What is Core’s distinctive approach compared to other layer 1 platforms?

Core takes a uniquely Bitcoin-aligned approach that extends the Bitcoin Network’s incentive alignment beyond merely defending the Bitcoin asset itself. By doing so, the Bitcoin Network also enhances the security of Core, creating a mutually reinforcing system that bolsters both the Bitcoin network and Core. The cornerstone of this alignment is Core’s Satoshi Plus consensus mechanism, which rewards Bitcoin miners and Bitcoin stakers for their contributions to Core’s security. This innovative approach allows Core to leverage Bitcoin’s unparalleled security while hosting a fully EVM-compatible dapp ecosystem specifically designed for Bitcoin. On Core’s scalable, Bitcoin-protected blockchain, the bitcoin asset’s potential is fully unlocked, merging the strongest decentralized currency with decentralized finance.

One of the standout features of Core is its Non-Custodial Bitcoin Staking, an integral part of Satoshi Plus. This allows any bitcoin holder to earn passive yield on their idle bitcoin without relinquishing control of their private keys. The bitcoin remains on the Bitcoin blockchain but earns yield through its role in Satoshi Plus. Users can lock their Bitcoin using Bitcoin’s native absolute time-lock feature, enabling them to elect validators that secure Core. This mechanism not only decentralizes the election of validators but also significantly enhances the economic security alignment between Core and Bitcoin.

What impact do you think the bitcoin halving will have on ecosystem incentives?

Every four years, Bitcoin mining rewards are effectively cut in half. That’s a huge impact on Bitcoin’s defense apparatus. Already running on tight margins, miners need to continually discover new income opportunities to offset Bitcoin’s natural issuance decline. Keeping miners heavily rewarded beyond Bitcoin block rewards will be increasingly critical for the Bitcoin network’s security going forward.

Without any additional energy expenditure, miners can turn to Core supplemental rewards, making the CORE token rewards issued to miners and mining pools effectively a second block reward. In addition to extending miner’s security, Core reinforces Bitcoin’s security by further incentivizing miner productivity.

What are the unique advantages that Core holds?

Core is designed with a hybrid architecture that takes the strongest elements from different blockchain designs. On the security front, Core is uniquely aligned with Bitcoin, benefitting from Bitcoin miner and bitcoin holder protection and interest. On the scalability side, Core is EVM-Compatible, granting it DeFi capabilities on par with blockchains like Ethereum. In addition to leveraging other blockchains’ superpowers, Core has also introduced its own novel offerings including non-custodial bitcoin staking, which has set the reference rate for Bitcoin. With Core’s bitcoin staking representing the reference rate for BTCfi, any financial decision made in bitcoin finance will have to take Core’s Bitcoin-native rate into account. These features and more have enabled Core to acquire vibrant user and builder communities. Over 100 dapps are live on Core.

Why is Core EVM-Compatible?

Builders choose building EMV-compatible dapps because it is familiar, easy, and scalable. Core merely gives builders and users what they want. Clearly, the EVM is the leader in its category, so rather than reinventing the wheel, Core was designed to leverage the existing EVM ecosystems that preceded it. This scalability has enabled a rapid ascension in terms of dapp development and user engagement.

Could you introduce us some applications on-chain right now？

Concerning applications currently on Core, there are several noteworthy projects. Glyph, a Bitcoin-powered decentralized exchange (DEX), offers features like inscriptions and staking. NLX operates similarly to platforms like BitMEX and GMX, serving as a Bitcoin-powered perpetual DEX. Colend, which introduced a bitcoin-based borrowing service. The overarching theme across these applications is unlocking bitcoin beyond its traditional constraints. A good list of Core dapps is available at coredao.org/explore/ecosystem.

What are your thoughts on narratives in crypto?

In terms of narratives, it’s clear that they play a role driving development, adoption and usage in the crypto ecosystem. That being said, not all narratives are created equal. Some narratives are short-lived distractions, while others continue to stir excitement year to year. As for the latter, the biggest overarching narrative in crypto is the continued ascendancy of Bitcoin. Despite having little development on it in the past, Bitcoin continues to make headlines and lead the charge for blockchain adoption.

Recently, Bitcoin has continued to drive narratives, but this time is different. The narrative is around Bitcoin reemerging as a center of innovation. Ordinals and BRC-20 spurred this narrative into action, but it has taken on a new life with the emergence of truly scalable solutions like Core.

Furthermore, the concept of Bitcoin staking and re-staking introduces an innovative approach to earning passive yield directly on the Bitcoin Layer 1 (L1), without compromising on security. The launch of a trustless bitcoin staking product by Core is a significant development, offering bitcoin holders the opportunity to earn yield and participate in securing other chains through re-staking.

These narratives underscore the evolving dynamics within the crypto space, focusing on scaling, trust minimization, and the innovative utilization of Bitcoin to unlock new possibilities across the ecosystem.

How does web3 attract real users?

What matters is finding that unique combination of pieces that people really want. Understanding user needs and addressing them effectively can set a project apart. That ethos is particularly important for Core, as a truly product-focused chain in the Bitcoin scaling space. Shipping features that people really want, like non-custodial bitcoin staking and a full BTCfi ecosystem, is the most important thing for a growing protocol.

Combining user-focus with an emphasis on behaving honestly and maintaining integrity is also essential; trust is a valuable currency in both traditional and decentralized ecosystems. All that being said, it’s still the early innings. There’s much to be done and much to learn, which is both a challenge and an exciting opportunity.

Do you have criteria for supporting specific ecosystem applications?

Core is an open and permissionless blockchain. This means anyone can build whatever they want on Core without needing prior approval. While certain projects can apply for funding from entities like the Core Foundation or the Core Venture Network, the platform remains accessible to all developers.

The projects that generate the most excitement are those that attract real user engagement and offer compelling value propositions. Success for dapps is primarily measured by their usage and the tangible benefits they provide. DeFi is a significant focus — given its alignment with Bitcoin’s strengths — yet other Web3 sub-sectors are also flourishing on Core, with gaming being a notable example. In the gaming sector, user activity is perhaps even more crucial than in DeFi, as active and engaged user bases are key indicators of a project’s success.

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