Bitcoin, while not supporting native staking, allows holders to earn yield via centralized lending platforms, Wrapped Bitcoin (WBTC) on Ethereum, and networks like Babylon and Stacks. WBTC facilitates participation in Ethereum DeFi borrowing and liquidity but comes with risks. Babylon and Stacks provide alternatives with time-locked scripts without impacting Bitcoin's protocol. This rise in decentralized finance (DeFi) is juxtaposed against Bitcoin's proof-of-work (PoW) mining system, presenting both opportunities and concerns over custodial risks and community ethos. The article explores these methods and the associated risks in-depth.
Though Bitcoin doesn't support native staking, holders can earn yield through centralized lending platforms, Wrapped Bitcoin, and Bitcoin-related networks like Babylon and Stacks.
Protocols like Babylon and Stacks use mechanisms like native time-locked scripts or stacking to offer rewards without removing BTC from the Bitcoin blockchain.
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