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Arrington Capital-backed RedStone has taken a bold step in the world of decentralised finance (DeFi) by introducing Bitcoin staking oracles, opening new doors for Bitcoin-based liquid staking tokens (LSTs) to integrate into the DeFi ecosystem. The significance of this development is monumental as it allows Bitcoin holders to stake their assets and use liquid staking tokens, such as Lombard Staked BTC (LBTC), in a broader range of DeFi applications, including lending and composable leverage.
Bitcoin staking oracles are a game-changer in the DeFi space, solving a long-standing problem for Bitcoin holders seeking to enter the lucrative staking markets. Previously, BTC-based liquid staking tokens were limited in their use, primarily serving as liquidity providers on decentralised exchanges (DEXs). However, with RedStone’s Bitcoin staking oracles, these tokens can now be deployed in lending platforms, creating opportunities for additional revenue streams and enhancing liquidity for Bitcoin holders.
Marcin Kaźmierczak, co-founder and Chief Operating Officer of RedStone, explains the significance of this innovation. “Without Bitcoin staking oracles, BTC LSTs could only be used to provide liquidity on decentralised exchanges,” Kaźmierczak told Cointelegraph. “But now, thanks to our Bitcoin staking oracles, LBTC and similar tokens can be used for lending and other DeFi applications, creating entirely new use cases for Bitcoin holders.”
This innovative use of Bitcoin staking oracles represents a major leap forward in the DeFi ecosystem. By integrating with major DeFi platforms such as Morpho and Compound, LBTC can be used in lending protocols to generate additional yield, all while maintaining a stake in Bitcoin.
Staking oracles play a critical role in verifying off-chain data and relaying that information to smart contracts on the blockchain. Without this crucial link, blockchain systems would remain isolated from real-world data, limiting their functionality. Bitcoin staking oracles, in particular, collect and verify important data such as staking rewards, slashing events, and other inputs necessary for the operation of Bitcoin-based LSTs.
“Staking oracles are crucial for the proper functioning of liquid staking tokens,” Kaźmierczak explained. “Without them, the tokens are limited to providing liquidity on DEXs, but with oracles in place, they become far more versatile and valuable within the DeFi space.”
Bitcoin staking oracles are expected to bring the same level of innovation to Bitcoin that Ethereum has seen with Lido Staked Ether (stETH). Ethereum’s success in DeFi has largely been driven by liquid staking protocols and their ability to integrate with lending platforms, yield farming, and composable leverage systems. Now, RedStone is making it possible for Bitcoin to follow in those footsteps, creating new opportunities for Bitcoin holders to diversify their DeFi strategies.
Kaźmierczak believes this could trigger an “immediate change” in the DeFi landscape. “Due to the nature of Bitcoin, which can grow with market excitement, even a small percentage of yield on a large underlying value is a significant opportunity,” he said. “Bitcoin staking oracles unlock that potential for BTC LSTs, making them a more attractive option for investors seeking yield in the DeFi ecosystem.”
This potential hasn’t gone unnoticed by industry experts. Tomasz Płatek, RedStone’s Chief of Staff, echoes the enthusiasm surrounding Bitcoin staking oracles. “The introduction of staking oracles for Bitcoin is a huge step forward for the ecosystem,” he said. “We’re confident this will lead to a new wave of adoption, similar to what we’ve seen with Ethereum LSTs.”
RedStone’s launch of Bitcoin staking oracles comes just months after the company secured $15 million in a Series A funding round led by Arrington Capital, a major player in the cryptocurrency investment space. This backing has provided RedStone with the resources to expand its offerings and develop new products that cater to the rapidly growing DeFi ecosystem.
Arrington Capital’s support signals confidence in RedStone’s ability to drive innovation in the blockchain space. Michael Arrington, the founder of Arrington Capital, has been a vocal advocate for projects that push the boundaries of what blockchain technology can achieve. “RedStone’s Bitcoin staking oracles have the potential to revolutionise DeFi for Bitcoin holders,” Arrington said. “By unlocking new use cases for BTC in DeFi, they are helping to bring greater value to the entire ecosystem.”
As RedStone’s Bitcoin staking oracles gain traction, the future looks bright for Bitcoin’s role in DeFi. With the ability to stake Bitcoin and use LBTC in a variety of applications, the potential for increased liquidity and yield generation is significant. Moreover, this innovation could attract more institutional investors to the DeFi space, as Bitcoin remains a preferred asset for long-term investment.
Kaźmierczak is optimistic about what’s to come. “We believe Bitcoin staking oracles will be a cornerstone of DeFi’s future,” he said. “By making Bitcoin more accessible and usable in DeFi, we’re creating new possibilities for both retail and institutional investors.”
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