Brendon Sedo on unlocking Bitcoin utility through Core DAO

0:01I'm Ashen Addison from the cryptocoin show and today on blockchain interviews with Brendan cedo one of the initial contributors to the core da and core chain Brendan welcome to the show and thanks for taking the time hey Ashton thanks for setting us up and excited to talk Bitcoin and core today definitely there's been a lot of uh updates to the Bitcoin ecosystem more

0:24than just you know a store of value that people are holding Bitcoin the utility and potential interaction with other parts of blockchain uh that Bitcoin is sort of diving into over this year I feel like is very beneficial that that core is continuing to grow in being able to bring more utility to bitcoin and I think more people are waking up to the fact that uh there's a lot of things

0:48that you can do with Bitcoin besides store it for the next 100 years um so I'm excited to dive into our discussions today I'd love to start with a little bit on your background and and how you got involved with core and then we can dive into everything on what core is about sure I'll keep that pretty short so we can talk about the juicier stuff uh related to core and Bitcoin but uh

1:12yeah quick back quick background on myself I've been in Tech about 15 years at this point um I was the founder and CEO of a of a tech startup called joist uh was basically what the kids would Now call a web 2 company um so it was SAS in the construction industry so raised VC funding scaled that up uh to one of the largest contractor Platforms in the

1:34world that with with payments and financial products and then eventually sold it uh sold it um you know a couple years ago now and then so I'd always been interested in crypto uh as a technologist you know folks were have been talking about it since you know the early 2010s and so we're always aware there's always just like a an interest and something I dabble in and then you

1:57know after I I I got out of my last company um after kind of transitioning started to just get a lot deeper into what you could actually do and and got fascinated started thinking about a few ideas as well and then actually reconnected with some folks I knew that were working on the core project um from my previous tech tech experience and you know heard more as the more I heard

2:21about the mission and saw the community that was built up here got just super excited and now have been part of the core project contrib for for over two years now um before we launch so it's been a really exciting uh exciting run but that's that's a bit about how I got involved and and a bit about myself personally yeah it's it's amazing when you have a interest in Hobby in

2:47something and then you're able to actually transition into that full-time and then you love what you do so that you know that's the beauty of it and how can you not love working on you know the next financial system with Bitcoin I'm personally very excited about it as well um and you mentioned there you know the mission got you interested in core can

3:05you talk about that I think a lot of people have seen core around on on social but they're like okay well what exactly is it doing with with relation to bitcoin you know what is core yeah I'll jump into that and a lot of that resonated so so again what resonated with me is as a as someone who'd been involved in Bitcoin for a long time I want you know obviously you

3:29want to hold it you don't want to let your Bitcoin go but you know I I wanted to do things with Bitcoin I actually was probably one of the first folks to you know wrap it bring it into the E ecosystem borrow and I you know actually bought some real estate uh with you know based on based on some collateralized loans uh because it you know didn't want

3:51to sell Bitcoin so you know core's Mission uh we'll jump into what core is but the the overall mission is to uh unlock utility for Bitcoin right so you can think of it as you have one point I don't know I actually didn't haven't checked the crypto prices in a couple days but let's let's call it one and a half trillion in market cap that's historically kind of sat right and and

4:16been stored and I'm talking about the Bitcoin market cap uh so what we want to do is unlock that you know unlock that liquidity and and latent demand to do things whether it's you know deployed into defi applications earn staking yields and actually put put your Bitcoin to work as an asset um so what is core core is a layer one blockchain that's fully evm compatible that is secured by

4:40Bitcoin so specifically it's sec we're going to jump into these I think in detail but it's secured by Miners and pools who delegate hash they do the hard work in the Bitcoin Network and help secure core chain with hash rate and then secondly we've got this really interesting native Bitcoin staking function so as AIT coin holder you can actually stake Bitcoin to help secure

5:03the core blockchain without giving up custody doing so EX on the Bitcoin L1 itself which brings a you know native yield to bitcoin for the first time so that is a the high level of what we do and you could think of it as like you know bitcoin's extremely decentralized and secure does a lot of things great but it has no native smart contracts no native staking

5:27yield right or uh you know ability to put your Bitcoin to work uh you can think of core as this uh scaling chain that enables a lot of these use case that you've seen in evm ecosystems what without um without giving up the decentralization and security of Bitcoin that's a great starting point I I want to dive into that a little bit more uh for clarification so you

5:53mentioned there it's evm compatible you mentioned core is a layer one you mentioned that the Bitcoin doesn't actually have to leave the Bitcoin coin blockchain as well so could you walk through an example of say I want to stake my Bitcoin or bring extra utility to the Bitcoin you transfer that to uh an evm chain or to the core chain and how does that work where it's not

6:15leaving the Bitcoin blockchain but you're able to actually stake it yeah it's a great question so those are really a few things so if I take a step back you know if you're a Bitcoin holder there's a variety of things you know that that core envisions you'll be able to do with Bitcoin it's really going to come down to your risk appetite and what trust assumptions you're

6:37willing to take on so the thinking was you know with staking right let's just start there staking is just part of core's consensus and was thought about from the beginning to bring to align with bitcoiners and bring bitcoiners into the core blockchain right so so how that works is it's completely non-custodial and happens entire on the Bitcoin Network so what you do is you

7:03issue you let's say you have a Bitcoin wallet right you would visit our staking website connect your Bitcoin wallet and you issue a time lock to yourself right so you're issuing a Bitcoin transaction in your wallet um specifying the length of how long you'd like to stake which is how long you're going to time lock your your your Bitcoin um and so let's say 30 days so

7:27you issue this time lock to yourself and there's also some additional data in which you specify which validator you'd like to stake to and delegate your Bitcoin to and and an evm address to earn block rewards boom you issue the Bitcoin transaction and what's great is you haven't given up custody you haven't wrapped or bridged your assets you haven't put it in quote unquote a smart

7:49contract it's simply time locked in your own wallet but you cannot spend it right until the time lock expires you can't move it there's no way and it's completely immutable so you've given up the ability to use that asset but you have the Peace of Mind of knowing that it's still in your customed wallet and so you're locking up Bitcoin to secure the core blockchain and we basically

8:10Rank validators and like choose the validator set each day based on how much Bitcoin has been delegated to them right so you're directly contributing to the security of the network and helping validators get elected so that's where you see this like risk-free yield or like a bond rate yield that you've seen in ethereum for example where you simply stake and you know right now you earn

8:33three to 4 per. right and that's completely no risk within your custy from there you know there's multiple other things you can do you can Bridge Bitcoin onto the core blockchain we've seen uh you know at this point there's over 450 million in TBL that's been brought on chain and we expect a lot more based on the market cap of Bitcoin but you know you can wrap into some sort

8:55of asset like a wrapped Bitcoin solve Bitcoin uh tbtc there's a variety of these assets and actually deploy into on Trin strategies and you can likely earn additional yields but you're taking on different risk assumptions it really depends on your appetite and you know the way core thinks about it is as more as you know technology improves and there's more utility for Bitcoin more

9:18will come on chain uh and a lot will go to staking because there's just like you know a lot of latent Bitcoin sitting around that would love to earn yields so kind of see it as as a variety of options the risk curve for Bitcoin holders to put their Bitcoin to work over time that's really interesting and I I feel like people they want to get some kind of yield and they also want to

9:42maintain that that immutability decentralization of their Bitcoin I think hopefully the days are pasted where people see some kind of yield platform they send their Bitcoin to another company and then all of a sudden there's a lawsuit and and their bitcoin's gone right that's not possible yeah in this sense when you're locking it in your own wallet yeah it's a very different

10:05approach and you know this team the core team are very early bitcoiners they align with Bitcoin they understand the value and and uh they're big Believers of Bitcoin the mission here is to extend its utility and and and what could be done with Bitcoin without uh you know completely changing the fundamentals of what Bitcoin is uh so you know it's very

10:26important that there was a non-custodial approach without slashing risk for you know large large institutions or or folks with a lot of Bitcoin you know it it was very much designed with with bitcoiners in mind uh to give them the you know the simplest and and most trustful method to earn yield on bitcoin for the first time ever without giving up custody of your actual

10:50Bitcoin and a lot of people understand Bitcoin mining as sort of the decentralized way that maintains the Integrity of the coin network but now when you have the core blockchain and you're staking is that more of a proof of stake consensus mechanism and that's verifying the security of of the core chain um and maybe you can talk a little bit about the consensus and and how

11:15that's secures the chain yeah so this is great we call this we we call this consensus it's a Satoshi plus consensus and the way to think of it is it's actually a hybrid proof of work like delegated proof of work and proof of stake chain so I didn't go into the whole specifics initially because it you know it's a lot but I I will now right so so you can think of it as you

11:41know there's a validator set on core that are that are going to validate blocks and ensure the the Integrity of the chain they're elected each day based on how much Ash rate has been delegated to their validator how much Bitcoin has been delegated to the validator which we just discussed how that works and lastly how much core has been Stak and there's

12:01this hybrid score that looks at how much of each of those three very difficult things to attain have been delegated or Stak to your validator and basically they're stack ranked each day and that's how the validator set is chosen and it's selected they're elected basically every single day based on this hybrid score so the way to think of it is you know

12:23you've got the delegated proof of stake from both Bitcoin and folks that are staking the core token which is the native token of the core blockchain and then you've got large mining pools that are delegating hash rate so you think of it as like you know they're they're responsible or they manage I'm just going to use simple terms like five EXA hases of hash that they produced on

12:45bitcoin that actually produced Bitcoin blocks they can use those fives EXA hases and delegate them to validators on core to help uh you know secure the chain and vote for a a validator right it's like hey we we think the uh the X I'm not going to name one for preferences but we think the ABC validator you know they're great stewards of the core blockchain they're

13:09good actors we're going to put our exit hash there and for helping secure the chain again they're earning block rewards which is another uh you know emission for miners who are really the back backbone of the Bitcoin Network which again is really important for Bitcoin alignment and you know a Bitcoin scaling chain so as opposed to extracting from miners you're actually

13:32helping Miners and giving them another emission okay yeah I want to dive into that a little bit more so the bitco themselves they're able to uh earn value or they can contribute to the core chain and they can also earn value and are the core the the core contributors of of core are they actually helping on the Bitcoin mining side securing the Bitcoin

13:58chain yeah great question so to be clear we don't run core doesn't run miners uh you know there's no mining operational that would be really cool uh you know maybe buy buy some land in Texas or something uh but there's you know there's a lot of there there are decentralized miners everywhere in the world generally and that's the the beauty of Bitcoin some of them just do

14:19it because they really believe in Bitcoin and they're not this large public company I think that's what makes Bitcoin amazing so you can think of it as like they're participating in pools who then you know produce blocks on bitcoin and help secure the Bitcoin blockchain when they're producing blocks again they can uh add some extra data uh as they're producing Bitcoin blocks red

14:41delegate that hash to core and earn core block rewards for helping secure the core chain so it's directly aligned with Bitcoin miners who are supporting the network so again you've got Bitcoin holders who are aligned with core chain now it's also secured by Bitcoin mining pools which by the way 55% of all of bitcoin's hash is already participating in core so you've got this this major

15:03alignment with the existing Bitcoin Network as opposed to extracting value for miners right you're actually giving them additional yield and Emissions uh which is very important for miners especially you know such as this year when you're coming uh coming after a having right and and their block rewards have been cut in half definitely now that's a great point

15:23in uh the miners looking to uh contribute to the B the blockchain ecosystem as a whole and also keep up when when the when the mining rewards are haved and I'm curious about 2024 because a lot has happened since January you know the the Bitcoin ETF starting out the year and then the having event for the miners and just overall a lot of capital flowing into the Bitcoin ETF

15:51which is different than holding your Bitcoin in your wallet and being able to to time lock it but the interest in Bitcoin has significantly grown uh over this year I'm curious on if that's translated into uh the interest of of core or you know what's the correlation you know as as half of that or a small percentage uh interested in the utility part and finding ways to get a yield on

16:16that Bitcoin yeah so I think they're they're there're somewhat different forces but it's certainly helped so the way this is my frame of mind thinking of it there there's um when you think of the ETFs I think that just solidified you know bitcoin's always been the Apex asset in crypto it has simply I think solidified it as the Apex asset and the success of

16:42those products have really done that it has you can think of it as you know great marketing and awareness for Bitcoin so I think the flows prove that more and more people want access and ability to and they're driving demand for Bitcoin and that's only going to continue then you have this other parallel where you had you know a recent upgrade to bitcoin which was the uh tap

17:08route upgrade which enabled things like ordinals and that that all that Force as well I think just woke a lot of people up to what is possible on bitcoin that hey maybe there's more that can be done with Bitcoin you know in that regard it was more the equivalent of you know ordinals and and their version of nfts I think it just kind of opened up the

17:29minder of what more can be done so I think what you're seeing is you know these new developments on bitcoin that have attracted developers and transaction fees and have gotten excitement back into the community and then with the ETFs on the more institutional side more marketing awareness and driving demand for Bitcoin the asset itself so you kind of have

17:51this perfect storm where there's people want to do more with their Bitcoin and people want more Bitcoin right so it's like this perfect force of for for chains like core where uh you know you can actually put that asset to work and do things more do more things with your Bitcoin and offer utility for Bitcoin whether it's native staking or coming on chain and actually you know doing things

18:14with smart contracts yeah no thank you for explaining that and you know that statement rings in my head you know people want a yield on their Bitcoin but they also want more Bitcoin yeah I think I think no doubt no one want I mean everyone wants to to stack more Bitcoin uh one exciting thing is you know that there's actually an ETP that launched in Europe by Valour uh

18:38Technologies it's a yield bearing Bitcoin ETP so basically you can buy it in a brokerage account an ETP is just exchange traded product so not quite an ETF but somewhat similar uh there's an etn story and an ETP and uh they offer a yield on bitcoin so imagine you have your brokerage account you can buy you know this this you know yield bearing Bitcoin product that's earning a couple

19:00percent a year and that's actually powered under the hood by core right so they're staking the underlying Bitcoin asset helping secure core chain and and return earning core rewards block rewards for doing so and and you know passing that off in an ETP product which is pretty exciting MH and now with the staking of Bitcoin on core you mentioned you know the the

19:23there's a small yield that you're getting is that in the core token um or there's differents you can get and maybe you can explain that and if it is the core token you know how is that involved in the ecosystem yeah happy to so core core was very thoughtful about its tokenomics uh there were actually no investors or prees or pre-sales of this token token launched like just under two

19:48years ago in uh February well actually January 2023 and when the when the mainnet launched and and the core chain actually went live that was the first time tokens were were minted with blocks right and the community got access to the Token list on exchanges there were no free mindes or funny games um the other thing that that that uh the core team thought

20:12about was like this really long emissions curve so you think of it as there's this fixed fixed supply of 2.1 billion core tokens there'll never be more of that exist and 40% of that's been allocated to block rewards right so every time a block is produced pays out rewards and uh that that curve is for the next 81 years you think of it's somewhat similarity to bitcoin bitcoin's

20:36obviously on a completely different schedule but you think of every four years there's a having event with with core basically every year the emissions are going down roughly let's say 3% until in year 81 there's no rewards yet and the the network subsists only on fees and so you've got this like um really thoughtful tokenomics and sustainable block rewards and that is

21:00what is you know those fixed block rewards are what are paying the core stakers Bitcoin stakers and miners mining pools um so it's not like liquidity mining incentives fake yield or money coming from a treasury these are just fixed emissions right that have been prepared for Block rewards and so so to answer your question I thought it important to give the context the

21:24rewards are paid in core and then what folks can do is they can stake the core they can they can sell it you know it's kind of up up to the Staker themselves we're coming out with a dual staking product where you know if you stake a percentage of core as well as Bitcoin you're going to get highly boosted yields on bitcoin so the incentives are as such that you know folks want to hold

21:44onto some core and likely stake it uh which is going to be really exciting getting a lot of great feedback on that product coming out soon but yeah that's overall how the emissions work and you know core tokens and rewards and and uh you know core is a top project at this point I think it's you know top 70 in terms of coin you know coin market cap leading Bitcoin chain in terms of tbll

22:05usage daus active wallets protocols so you know it's um it's a lot more than a rewards token it's a really healthy Bitcoin ecosystem the leading Bitcoin scaling chain that I think is still very nent and early uh in its development you know think I think TBL is going to grow dramatically and you know lot a lot more excitement is going to come to bitcoin I

22:27think it's it's still very early just getting started and we're already in a in a great position mhm no thank you for explaining that and uh you I think you mentioned the number at the beginning around 500 million or less out of the trillion plus that uh Bitcoin has in in market cap is sort of being staked into the Utility side of Bitcoin right now what do you

22:51think uh will help drive that or some of the factors is it just the Bitcoin price or even just the the competitive landscape of alternative Bitcoin utility uh ecosystems that pop up and then you know one gets popular and then people see all the Alternatives and say hey cor is here but there's other ones everyone's doing this now and more people are going to get involved you

23:13know what are those some of the factors that are going to drive more Bitcoin to be staked and utilized so I missed the first part because the video actually froze um if I'm am I coming through so it's okay but I think I got the gist to let me know if I'm in the right angle so I think that you know competition's competition's good and the way I say frame this is

23:35like there's $ 1.5 trillion dollar in liquidity in Bitcoin that is is somewhat just sitting there there's OB some people doing you know lending activities Etc but most of it is simply sitting so there's this huge opportunity to to bring that on chain or activate this pool of capital which dwarfs ethereum right and and is it is n you know natively on a blockchain so

24:02obviously a lot of folks are going to try and build scaling utility for Bitcoin and you know try and facilitate daps Etc so it's going to be competitive and that's a good thing because the the reward pie is so big um in terms of what's important it's like hey are these projects were they founded with long-term success in mind or you know are they is it chasing a narrative how

24:26how are the tokenomics set up are they sustain for for decades to come you know the beauty of Bitcoin is like truly pure Fair launch that's why you know people absolutely love it and then and lastly I think the battle is just around the utility itself you know are there products and opportunities and and uh real problems being solved on the blockchain uh like

24:49core has like are there money markets are there are these key use cases that that folks with Bitcoin want to use and uh ultimately it's like who can create the network work and Community to to to get there first where where folks uh trust it and and come because it's solving a real problem of theirs so um you know those are the things I think about I think it's really competitive

25:12and it's early and it's just a very exciting time we're you know in a great position to be leading in in in all these metrics right now and and uh it feels really good I appreciate that explanation and the context you made prior to you know the rewards of about uh the core blockchain and you how it sort of resonates with with Bitcoin longevity decentralization I think people need to

25:38understand all of that when they are utilizing their Bitcoin somewhere and what am I actually getting when I lock my Bitcoin in am I actually fulfilling you know sort of the purpose of Bitcoin staying in the true decentralized nature of it so uh I I think I think that's important to to Riff on your point and I don't mean to interrupt but I think it's

25:57an important point I think I think you're that that's that's why the design of something like a core was was very thoughtful right it's like aligned with Bitcoin holders aligned with miners when you think of folks be like what if this activity can just happen on existing ethereum L2 or etc etc it's like well it doesn't it doesn't ACR value to Bitcoin in any way

26:22or it doesn't acrw you know crew value to ethereum right and so so these are the these are the things or the opport that stands right now to have a really Bitcoin aligned project sorry I heard back some background there but yeah to have a to have a you know Bitcoin aligned solution that hits on a lot of the factors that you were talking about no I appreciate

26:45that and one other question about the staking I feel like part of the popularity of staking in recent months has been around not just staking but liquid staking or raking and platforms like igen layer have brought in more uh attention because not only can you stake but you can do other once you're staking you can do other things with derivative assets maybe earn

27:10more yield is that I I I understand there's some kind of liquid staking in core is that along those terms yeah so so uh there's a liquid Stak core which is pretty common in most ecosystems right you can stake core and menta what's called St core and then deploy it into DIY while having a native yield the thing that core is really excited about is this product called LST

27:38BTC and the thinking of this is you could almost imagine it as like the Bitcoin equivalent of an st right so so you'll be able to get access to this dual staking that I that I talked about so it'll be like Bitcoin core you can you can basically uh you know send in your Bitcoin and or core and then mint this LST Bitcoin token that has native yield from cores

28:06consensus right so it's all being staked but then you get this native token called LST Bitcoin that you can go use on the core blockchain you know whether it's a money market or or a DEX or exchanging there's G to be real things you can do with this LST Bitcoin token all while it has native yield built in and that is uh I think Super exciting and the opportuni is massive and uh

28:33definitely a product that you know one of the products on cor's road map that that folks are most excited about I you know coming out in about a month or so I will definitely look into that a little bit more I feel like once people see the basic staking of their Bitcoin then they are become interested in in learning more and looking at derivative assets um but as you said at the

28:55beginning there's still so much market cap of Bitcoin that has yet to just take the first step uh and and I want to go back to that as as we near the end um what if somebody has you know $100 in Bitcoin or maybe they have a million um what is the way that they get started do they just go to the core platform and connect their wallet and lock it um and then just do some basic

29:21tasks because I feel like that's the first step in getting involved yeah so I mean just take all your coin and stake it right now you know that's the first step just just do it do it you know no just uh you know I think I think so let's let's think of it as there's different folks different yeah different folks uh different BLS or whatever the term is um so yeah what if

29:45you're a bitcoiner and you want to look into the to earn you know I think the first step is let's look at non-custodial Bitcoin staking you don't give a cuts of your Bitcoin you you don't have to wrap it or Bridge it and you're directly helping secure the core blockchain and there's about you know again I don't know if I mentioned the numbers but about 6,000 Bitcoin staked

30:05already live for the last five to six months very trusted just works and so the thinking would be go to stake. cord out.org ensure that uh you know you're using a supported Bitcoin wallet and stake a portion of your Bitcoin even if it's 5% try it get a sense of how it works even 1% of your Bitcoin time lock it for 10 days whatever the minimum is and see

30:31what the experience is like and you'll realize that it's you know very simple it's a simple Bitcoin transaction and uh you're directly contributing to the core Network you'll then earn some core yield and my suggestion would be go have some fun in the core ecosystem you've now got some core tokens on an evm address there's this program called core ignition which is an incentive program

30:54to to help and educate new users how to get involved in the e system what kind of daps there are how they work and there's you know there's actually an incentive program to to do things on the core blockchain so I think that's a good way to start whether you got a hundred bucks or like said a million and uh and you know just just start with the Bitcoin stake function and then and then

31:16you'll earn some core tokens which you can go play around in the core ecosystem with an evm wallet that's great Brandon I appreciate all this information and uh I'm wishing the coure Team all the best in driving further utility to bitcoin uh I feel like it's something that a lot of people are just waking up to the fact that hey it's already the greatest asset of all

31:39time but it can be even greater if we can put other utility in it and utilize it with other blockchain ecosystems and decentralize applications decentralize Finance um to take Finance back into your own hands so uh I'm going to leave that uh Link in the show notes to uh the core and and the staking part of it so people can check it out and learn more

31:59um I I would love to follow up in uh in the next quarter or two and and see where bitcoin's at and where Bitcoin staking and utility is at I feel like it'll be growing and and we'll see what else is up the sleeve in uh of the core Dow um so thank you so much for taking the time very much appreciated thanks Ashton and yeah stay tuned we've got a great

32:21Twitter very active Twitter a Discord you know probably see some some great news coming out this so the core team is just getting started so it's a really exciting future to be a part of