DeFi Technologies to Launch Validator Node and Stake $100M in BTC

Toronto-based digital asset company DeFi Technologies is set to launch a validator node on Core Chain and stake nearly $100 million in Bitcoin (BTC).

Through its subsidiary Valour, DeFi Technologies will not only validate transactions but also receive staking rewards for its participation, the firm said in a Tuesday press release.

The staking process will be facilitated by Core Chain’s Ethereum Virtual Machine-compatible consensus mechanism on its layer-1 BTC-powered blockchain.

“By staking 1,498 BTC and participating in network consensus, we are advancing our mission to bridge traditional finance with innovative blockchain technology,” Olivier Roussy Newton, the CEO of DeFi Technologies, said.

“This approach offers our investors unique exposure to yield and growth within the digital asset space.”

Stakers to Recieve Rewards in CORE Tokens

During the lockup period, stakers will retain custody of their BTC holdings while receiving rewards in CORE tokens, which will be reinvested in the product.

Staked CORE tokens will provide a reward of 11.66%.

To ensure the security of transactions and the blockchain, 50% of the BTC mining hash power will be distributed to the Core Chain.

Currently, Core Chain has over 2,800 BTC staked, excluding the upcoming stake from DeFi Technologies.

The collaboration marks the second step in the partnership between the two organizations.

On May 10, they jointly launched the Valour Bitcoin Staking exchange-traded product (ETP) on the Nordic Growth Market exchange, with the Swedish krona serving as the base currency.

The Valour ETP, touted as the first yield-bearing BTC ETP, offers exposure to BTC with a 5.65% yield and a 1.9% management fee.

Additionally, the partners plan to introduce a Core ETP that will provide yield through BTC staking.

Valour already offers ETPs backed by other coins such as Uniswap and Polkadot, as well as a 10-coin basket known as Bitcoin Carbon Neutral (BTCN) and the STOXX Bitcoin Suisse Digital Asset Blue Chip X Index.

Some of these offerings have no management fee.

DeFi Technologies Increases Focus on Bitcoin

The launch of a validator node by DeFi Technologies aligns with its recent shift towards a greater focus on BTC.

Just a few days ago, the company announced that it had adopted BTC as its primary treasury reserve asset and had purchased 110 BTC as part of its new strategy.

The announcement resulted in a significant 23% spike in the share price of DeFi Technologies.

As of May 31, DeFi Technologies had a cash balance of $51 million, while Valour managed $607 million in assets under management (AUM).

This represents substantial growth for Valour, as its AUM stood at $274 million in mid-March 2022.

Over the past two months, several firms besides the infamous MicroStrategy have chosen to adopt Bitcoin as their primary savings vehicle for excess cash, including US healthcare firm Semler Scientific and Japanese investment firm MetaPlanet.

MetaPlanet and Semler have both shown willingness to use capital markets to raise funds to buy even more BTC, rather than only using corporate profits.