pSTAKE Finance, powered by Binance, launches a Bitcoin liquidity management solution
Binance Labs-backed liquid staking protocol pStaKE Finance has unveiled a liquid staking solution for Bitcoin in the latest development for Bitcoin-native decentralized finance (DeFi).
Built on Babylon's Bitcoin Staking Protocol, pSTAKE Finance's solution aims to simplify the Bitcoin staking process and provide Bitcoin (BTC) owners with additional generating opportunities.
According to Mikhil Pandey, co-founder and chief strategy officer of pSTAKE Finance, the protocol, from a fundamental belief in the world's oldest cryptocurrency, decided to build Bitcoin-based staking solutions, aiming to make it a product-generating asset.
Pandey told Cointelegraph:
“Having fundamental faith and trust in Bitcoin, offering a product and constantly identifying and solving critical problems in this industry are some of the reasons to move in the direction of Bitcoin. The prospect of making Bitcoin a yield-generating asset is exciting. Mining Bitcoin is powerful for the entire ecosystem, not just Bitcoin L2s.
The initiative is part of a broader movement known as Bitcoin DeFi (BTCFi) that aims to bring DeFi capabilities to the world's first blockchain network.
Investor demand for Bitcoin-native DeFi solutions began to grow by halving in 2024, which saw the launch of Bitcoin Runes – a new protocol for introducing fungi on the Bitcoin network.
Binance's independent venture capital (VC) arm, Binance Labs, also shifted its focus to BTCFi before halving after announcing an investment in Bitcoin-native cryptocurrencies BounceBit on April 11.
Related: BTCFi is a ‘huge opportunity' to make Bitcoin a productive asset – stack
The launch of the liquid staking solution marks pSTAKE's first foray into Bitcoin-native DeFi after building its liquid staking protocol in the cosmos over the past three years.
BTCFi is making an asset that will produce Bitcoin for the first time.
pSTAKE's new solution is one of several protocols that seek to make Bitcoin a productive asset.
In early May, Hermetica announced the debut of a Bitcoin-backed synthetic United States dollar with the ability to generate output. The new synthetic dollar USDh, which is scheduled to be released in June, will offer users a yield of up to 25 percent.
As a co-founder of pStake, the BTCFi industry is seeing a variety of promising products that make Bitcoin more capital efficient. However, he believes BTCFi still needs more development before it can match Ethereum-level DeFi. Pandey explained:
“Ethereum technology had to go through a lot of evolution before the actual DeFi winter in 2020. The Bitcoin DeFi landscape is likely to follow a similar journey of growth and development before we see a full BTCfi winter.”
However, making bitcoin a more versatile asset holds a huge financial opportunity, Pandey added.
“With less than 1% of Bitcoin's market cap in DeFi today, we can see significant growth as we develop more secure and reliable ways to generate revenue on Bitcoin.”
RELATED: Bitcoin DeFi interest grows as stack active accounts reach peak
