DeFi Technologies, a digital asset company based in Toronto, is preparing to launch a validator node on Core Chain and stake close to $100 million in Bitcoin (BTC).
Operating through its subsidiary Valour, DeFi Technologies will not only verify transactions but also earn staking rewards for its involvement, as stated in a press release issued on Tuesday.
The staking process will be supported by Core Chain’s Ethereum Virtual Machine-compatible consensus mechanism on its layer-1 BTC-powered blockchain.
“By staking 1,498 BTC and participating in network consensus, we are furthering our goal to connect traditional finance with innovative blockchain technology,” said Olivier Roussy Newton, the CEO of DeFi Technologies. “This strategy provides investors with unique exposure to yield and growth in the digital asset sector.”
Stakers will receive rewards in CORE tokens during the lockup period, retaining custody of their BTC holdings while reinvesting the rewards in the product. Staked CORE tokens will offer a reward of 11.66%.
To ensure transaction security and blockchain integrity, 50% of the BTC mining hash power will be allocated to the Core Chain. Currently, Core Chain has over 2,800 BTC staked, not including the upcoming stake from DeFi Technologies.
This collaboration marks the second phase of the partnership between the two entities. They previously launched the Valour Bitcoin Staking exchange-traded product (ETP) on the Nordic Growth Market exchange, with the Swedish krona as the base currency.
The Valour ETP, known as the first yield-bearing BTC ETP, provides exposure to BTC with a 5.65% yield and a 1.9% management fee. Additionally, the partners plan to introduce a Core ETP that will offer yield through BTC staking.
DeFi Technologies has recently shifted its focus towards Bitcoin, as evidenced by the launch of the validator node and the adoption of BTC as its primary treasury reserve asset. This move resulted in a significant 23% increase in the company’s share price.
As of May 31, DeFi Technologies held a cash balance of $51 million, while Valour managed $607 million in assets under management (AUM). This signifies substantial growth for Valour, as its AUM was at $274 million in mid-March 2022.
In the past few months, several companies, including Semler Scientific and MetaPlanet, have followed suit by adopting Bitcoin as their primary savings vehicle for excess cash. These firms have shown willingness to utilize capital markets to raise funds for further BTC investments, rather than solely relying on corporate profits.