CoreDAO has partnered with Maple Finance, BitGo, Copper.co, and Hex Trust to tackle the issue of illiquid institutional Bitcoin assets.
Together, they have developed lstBTC — a yield-generating Bitcoin token specifically designed for institutions and accredited investors. Operating on the Core blockchain, lstBTC ensures liquidity and offers a performance-driven alternative to traditional Bitcoin custody, all while maintaining the security and asset exposure expected from an ideal custody solution.
As institution-level Bitcoin adoption rises, the demand for more strategic and efficient investment methods grows concurrently. lstBTC represents a significant advancement in how Bitcoin can be leveraged—transitioning from merely holding Bitcoin to generating returns.
What is lstBTC and How Does It Work?
lstBTC (Liquid Staking Token Bitcoin) is an innovative financial tool for institutions with large Bitcoin holdings in cold storage. Previously, these assets languished in custodial wallets without generating returns, as there was no infrastructure for Bitcoin to yield income. lstBTC changes this paradigm.
Here’s how it works: institutions entrust their Bitcoin to custodians like BitGo, Copper, and Hex Trust. In exchange, they receive lstBTC on the Core blockchain, with each token backed 1-to-1 by Bitcoin held in custody. Unlike wrapped Bitcoin (wBTC), which carries risks associated with smart contracts and cross-chain bridges, lstBTC utilizes time-locks, a native Bitcoin solution, allowing custodians to maintain secure custody without the need for cross-chain mechanisms.
What particularly distinguishes lstBTC is that its yield is expressed in BTC. Core’s Dual Staking mechanism provides a foundational return of 4% to 6%, with additional yield opportunities from Maple Finance’s managed strategies, encompassing lending, basis trading, and multiple routes in both decentralized and centralized finance. All of this is achieved while maintaining full liquidity; lstBTC can be used as collateral, traded, or transferred across compatible platforms.
Security and Yield, Without Compromise
For institutional investors, security is paramount. LstBTC is designed with this in mind. It relies on established custodians to hold Bitcoin and employs native time-lock scripts—avoiding the risks tied to smart contracts—making it particularly appealing to compliance-driven investors seeking rigorous risk management and reliable audit trails.
Moreover, Maple Finance plays a crucial role as the entity managing lstBTC’s yield strategies. With a background in providing unsecured loans to institutions and engaging in low-risk, high-exposure DeFi operations, Maple guarantees that lstBTC delivers only safe, competitive yields that meet institutional standards.
Finally, institutions can now transform their BTC into passive income through lstBTC, a much-anticipated development that does not disrupt existing custody systems, security layers, or accounting processes. This innovation is one of the most promising advancements I’ve seen recently. If utilizing Bitcoin can be done securely without incurring income tax, it makes sense to enable institutions to generate income streams from Bitcoin.
Transforming Idle Bitcoin into Performance Assets
The opportunity here is enormous. Over $500 billion worth of institutional Bitcoin held in custodial accounts is waiting to be utilized. While new custodial firms boast about securing crypto compared to traditional asset classes, they often overlook the growing opportunity cost of that supposed security. This rationale becomes problematic when you consider that Bitcoin can be held
safely while still generating yield. lstBTC provides a solution that gives these institutions back control of their assets.
Through the secure and regulated framework of lstBTC, traditional finance custody and the dynamic world of blockchain-based finance can coexist seamlessly. Now, Bitcoin custody can yield returns without sacrificing security or regulatory compliance.
With lstBTC, CoreDAO and its partners are paving the way for the future of Bitcoin utilization by institutions—an approach that not only safeguards the asset but also maximizes its value.
As Bitcoin adoption increases, lstBTC has the potential to become the new benchmark for institutional Bitcoin deployment, signifying a major shift in how serious investors perceive and apply Bitcoin. Capital efficiency is increasingly crucial, and institutions will leverage their Bitcoin in a more economically efficient manner.