pStAKE Finance, a liquid staking protocol backed by Binance Labs, has introduced its liquid staking solution for Bitcoin as part of the growing Bitcoin-native decentralized finance (DeFi) movement. The solution, which is based on Babylon’s Bitcoin staking protocol, aims to simplify the staking process for Bitcoin holders and provide additional opportunities for yield generation.
The decision to create Bitcoin-based staking solutions stems from a belief in the potential of the world’s oldest cryptocurrency to become a yield-generating asset. Mikhil Pandey, the co-founder and chief strategy officer of pSTAKE Finance, explained that the initiative is part of a broader movement known as Bitcoin DeFi (BTCFi), which seeks to bring DeFi capabilities to the original blockchain network.
Interest in Bitcoin-native DeFi solutions has been on the rise since the 2024 halving event, which also saw the launch of Bitcoin Runes, a protocol for issuing fungible tokens on the Bitcoin network. Binance Labs, the independent venture capital arm of Binance, has also shifted its focus to BTCFi and recently invested in the Bitcoin-native restaking protocol BounceBit.
The launch of pSTAKE’s liquid staking solution represents the company’s first foray into Bitcoin-native DeFi after previously building its liquid staking protocol on Cosmos. The BTCFi movement is now making it possible for Bitcoin to generate yield, and pSTAKE’s solution is one of many protocols working towards this goal.
In addition to pSTAKE, other projects are also making strides in making Bitcoin a yield-generating asset. Hermetica, for example, recently announced the upcoming launch of the first-ever Bitcoin-backed synthetic United States dollar with yield-generating capabilities. Set to be released in June, the synthetic dollar, USDh, will offer users yields of up to 25%.
While the BTCFi industry is witnessing the emergence of promising products that enhance the capital efficiency of Bitcoin, there is still further development needed to reach the level of DeFi on the Ethereum network. Pandey acknowledges this and believes that making Bitcoin a more versatile asset presents a significant financial opportunity.
As interest in Bitcoin DeFi continues to grow, the number of active accounts on the Stacks blockchain has reached a record high. This demonstrates the increasing interest in Bitcoin DeFi and the potential it holds for the future.