Bitcoin has historically focused on enabling peer-to-peer payments and becoming a store of value, but has paid less attention to DeFi, NFTs, and other narratives enabled by programmability. Instead, these narratives have been deferred to alternative protocols, primarily Ethereum. However, Bitcoin is now experiencing a programmability renaissance, thanks in large part to two recent innovations: Ordinal Theory and BitVM.
After the launch of the Ordinals Meta Protocol and its BTC-based token standard, it is undeniable that the Bitcoin community has a strong interest in NFTs, fungible tokens, and universal programmability. In December 2023, Bitcoin’s NFT sales (including technically non-fungible BRC-20) exceeded those of Ethereum and Solana combined. This is especially important since they have been leading the way in developing the NFT community for many years.
BitVM is a strategy for performing arbitrary computations anywhere and then validating them on Bitcoin, opening the door to new bridging mechanisms and ideas for enforcing transaction validity. While some dimensions of L2 (such as data availability) are simpler, Bitcoin L2 still requires innovation to scale to support dozens of layers. Until recent developments, other features, such as the aforementioned trustless bridging and forced transaction validity, were considered by many to be impossible without a soft fork.
Ordinal theory highlights the need for additional functionality, and then BitVM makes expressive and trust-minimized L2 look possible. This sparked a frenzy for the Bitcoin layer, dubbed “Bitcoin L2 Season.” However, some teams, such as the Core Foundation, are already building within the Bitcoin ecosystem and are well-positioned to capitalize on the momentum of the Bitcoin layer. While many other layers are still being built towards mainnet, the Core chain now provides a platform for Bitcoin programmability.
background
The Core Chain is a Bitcoin layer (specifically a sidechain) using EVM and the novel Satoshi Plus consensus mechanism. Satoshi Plus is a combination of Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS). It is designed to retain the decentralized security of Bitcoin while enabling the scalability of a higher-performance smart contract platform. The parameters of Satoshi Plus, as well as other aspects of the network, are managed in a decentralized manner by Core DAO (powered by the CORE token). Core Chain is EVM compatible, similar to Binance Smart Chain’s implementation of Geth. Finally, the Core chain has a built-in BTC bridge, making BTC available on the network in the form of coreBTC.
The Core Foundation and Core DAO were established in May 2022. The Core Foundation is self-funded and consists of contributors Rich Rines (formerly head of transfer engineering at Coinbase, founder and CEO of AutoReach), CJ Reim (co-founder and managing partner of Amity Ventures, founder of Ethereum World Blockchain Investor), Lindsey Haswell (former Chief Legal Officer of Blockchain.com and MoonPay, Supervisory Director of Uber), Jack (10 years of experience in blockchain and Web3 technology, former BI software engineer), Brendon Sedo (former Founder/CEO of Joist and EHF Investor Fellow), Max (18 years of experience as an entrepreneur, engineer and product designer), and Charles (master's degree in computer science and theory, previously served as senior design on multiple Web3 projects Developer).
Technical features
The Core chain has four key features that make it stand out from the competition:
Satoshi Plus: A novel consensus mechanism that is a hybrid of DPoW and DPoS.
Core DAO: A DAO that manages on-chain governance.
EVM: Modified Ethereum Virtual Machine for smart contract execution.
coreBTC: The revered core native bridge to Bitcoin.
Satoshi Plus: The biggest difference between the Core chain and other Bitcoin layers (and merged mining in general) is its Satoshi Plus consensus mechanism. Satoshi Plus is a hybrid model of Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS).
DPoW is performed by Bitcoin miners and mining pools who delegate their existing Bitcoin computing power to selected validators on the Core chain. DPoS is performed by CORE token holders staking/delegating their CORE tokens to selected validators on the Core chain. DPoW computing power and DPoS stake help calculate a weighted score to determine which validators are eligible for the next round of block creation. Certain parameters of the weight are variable and set by Core DAO; currently, the weight ratio is two-thirds for computing power and one-third for equity.
This hybrid model separates block production from Bitcoin miners, removing any possible incentive for Bitcoin miners to censor the Core chain. This novel approach solves the classic problem of merged mining (and other forms of parent-child shared security). In this problem, the security provider network can perform MEV or censorship on the child chain without penalty and no incentive not to do so because they are theoretically more consistent with the parent chain than the child chain.
Network participant roles: Participants of the Satoshi Plus consensus include Bitcoin miners, CORE stakers, validators, relayers, validators and Core DAO. Together, they secure the Core network through PoW and DPoS and adjust consensus-related variables through on-chain governance processes.
bitcoin miner
Bitcoin miners and mining pools participate in the Satoshi Plus consensus by mining Bitcoin blocks and subsequently delegating these blocks to core validators in each block they generate. This process involves adding data to the op_return field, which is used to contain arbitrary data used in many other network features such as inscriptions. The consensus process signals to the Core network that miners are delegating their computing power to validators and participating in Satoshi Plus. Miners do not need to pay any additional fees, and miners can even include their own Core address in order to receive CORE tokens distributed during the consensus process.
Because this process is free for miners, there is no guarantee that participating Bitcoin miners will be aligned with Core. Therefore, block production is managed by a unique role (the validator) to which miners entrust their computing power.
This shared security is chosen individually by each miner. It is also non-competitive, meaning that individual miners do not exclude themselves from participating in another network’s merged mining or shared security (e.g., PoX with Stacks) by delegating computing power to core validators. An exception to this non-contest may be other shared security models that also require data to be posted into the op_return field, which has a size limit of 80 bytes.
CORE stakers: CORE token stakers participate in Satoshi Plus by delegating CORE tokens to validators on the Core chain.
validator
Validators participate in Satoshi Plus by running validator hardware and staking their own CORE tokens. Miners delegate computing power, and delegators delegate equity to validators, who combine it with their own equity to create their weighted score. As an open and permissionless system, validators can also run Bitcoin miners themselves and delegate the computing power to themselves if they choose.
Additionally, native liquidity staking via stCORE tokens is possible. In theory, this would increase consensus participation because users would not have to choose between staking and leveraging liquidity in DeFi or other protocols.
Relayers and validators
Relayers participate in Satoshi Plus by relaying Bitcoin block headers to the Core network via on-chain light clients. Like all other characters in Satoshi Plus, the Repeater set is permission-free. Anyone can participate by signing up and locking in a refundable deposit of CORE tokens. However, relayers must register and be verified to receive rewards.
Validators participate in Satoshi Plus by identifying and reporting malicious behavior within the network. If a malicious actor is discovered, the malicious actor's stake may be reduced or outright confiscated. When block rewards are distributed, validators are compensated for their monitoring. Acting as a validator is permissionless.
in conclusion:Core Chain brings new programmability and scalability to the Bitcoin ecosystem through key technical features such as its novel Satoshi Plus consensus mechanism, EVM compatibility, and coreBTC bridging. With Bitcoin’s L2 season upon us, the Core chain is well-positioned to capitalize on this momentum. By combining the decentralized security of Bitcoin and the smart contract capabilities of Ethereum, the Core chain provides developers and users with a powerful platform that promotes further innovation and application of Bitcoin.