What you need to know about Bitcoin staking
Bitcoin staking allows holders to participate in network operations and earn returns, despite Bitcoin's Proof of Work (PoW) mechanism. Platforms now offer Bitcoin-based Liquid Staking Tokens (LSTs) enabling indirect staking. EigenLayer introduced "restaking" on Ethereum, allowing users to secure additional services with staked ETH, which is being adapted for Bitcoin through Babylon. Users deposit BTC into staking protocols to receive LSTs, enhancing liquidity while retaining staking rewards. The leading Bitcoin LST, LBTC, has a market cap of $300 million and over 3,000 holders. Other notable protocols include UniBTC and Swell BTC. Currently, staked Bitcoin constitutes 3.75% of all wrapped Bitcoin, indicating potential for growth. The long-term viability of Bitcoin staking hinges on the development of a robust ecosystem of services.
