Welcome to Core Chain’s four-part “Decoding Core Chain” blog series, which are targeted at providing a comprehensive overview of the Core Chain ecosystem, its purpose, and its future goals.
In this part one-of-four series, our mission is to dive into Core Chain’s broad aim to become Bitcoin’s scalable, EVM-compatible smart contract platform.
What is Core DAO?
At the heart of the Core DAO ecosystem is its blockchain, the Core Chain, which is designed to be Bitcoin’s complementary and hyper-scalable smart contract platform. Pursuing this goal means that the Core ecosystem revolves around a number of technical innovations, such as:
Satoshi Plus consensus, which is a pioneering combination of Delegated Proof of Work (DPoW) and Delegated Proof of Stake (DPoS) that leverages Bitcoin’s network of miners for security.
Non-custodial Bitcoin staking, which allows any bitcoin holder to earn yield by staking their bitcoin tokens without giving up custody. This has been shipped, and constitutes a major upgrade to Satoshi Plus consensus.
A Core-native wrapped version of bitcoin, coreBTC, which serves as a synthetic representation of Bitcoin on the Core Chain. Its purpose is to integrate Bitcoin into the decentralized finance (DeFi) landscape being created on Core DAO.
Another important feature of Core DAO is the ability of liquid staking via stCORE. Through this users can stake on the network, receive a corresponding liquid staking token (LST) in return, and trade, transfer, or use these LSTs in various other DeFi applications. This will be covered in detail in part III.
HTLC Atomic Swaps, which enable trustless, peer-to-peer exchange of tokens between Core Chain and other blockchains, including (and especially) Bitcoin, through Hashed TimeLock Contracts (HTLCs). Read more here.
A major part of Bitcoin’s reputation rests on its legendary resistance to both attacks and centralization. This is due to the fact that Bitcoin prioritizes security and decentralization, but it does so by incorporating certain deliberate architectural limitations. While these are not flaws, per se, they do have profound effects on its scalability and overall performance, which in turn impacts Bitcoin’s ability to support decentralized finance (DeFi) applications and DAOs.
It’s worth spending a little more time discussing these limitations in more depth.
Bitcoin’s Scalability and Performance
To properly understand how Core Chain aims to supplement and enhance the Bitcoin ecosystem we need a breakdown of Bitcoin’s limitations:
Block size and transaction throughput: The foundational limitation of Bitcoin relates to its 1MB block size, which restricts the number of transactions that can be processed per block to only ~7 transactions per second. This is not nearly enough to meet the requirements of modern finance or applications demanding higher transaction volumes.
Confirmation delays: Compounding the issue of limited throughput is the inherent delay in Bitcoin’s transaction confirmation. Bitcoin's protocol dictates an average block time of approximately 10 minutes, leading to significant delays in settling BTC transactions. Because potential users are more focused on immediacy, this is a substantial bottleneck for Bitcoin's adoption in many use cases.
Lack of Turing completeness: Bitcoin's scripting language is not Turing complete. In computer science, a general-purpose system is ‘Turing complete’ when it can capture the computational properties of any other system, such as a Turing machine. Don’t worry if you’re not entirely clear on what this means, the important thing to know is that there is a wide variety of functions which Bitcoin’s scripting language either can’t support, or which are extremely difficult to support. When combined with the lack of support for smart contract development, this leads to the inability to develop several different kinds of decentralized applications on the Bitcoin blockchain.
Lack of upgradeability and flexibility: Bitcoin's strict adherence to its original design and protocol makes it less flexible in adopting new features and technologies. This rigidity does preserve the Bitcoin network's stability and earns trust, but it also makes it less able to adapt to the emerging technological advancements necessary for building complex smart contracts and other kinds of applications.
Lack of interoperability: Bitcoin operates largely as a standalone blockchain with limited interoperability. This isolation hinders its ability to seamlessly interact with other blockchain systems, a critical requirement for many advanced applications that thrive on cross-chain synergies.
Core Chain Overcomes Bitcoin’s Limitations
There have been a number of attempts to get around Bitcoin's limitations, but these efforts consistently encounter the oft-cited ‘blockchain trilemma’ and struggle to optimally balance security, decentralization, and scalability. You can think of this as being like the tradeoff between building muscle and losing weight. If you’re working out hard and eating appropriately, it becomes nearly impossible to also lean down, while if you prioritize that weight loss, your body probably won’t get the calories it needs to add muscle mass.
Despite these challenges, the emergence of innovations like Ordinals and the BRC-20 token standard demonstrates strong demand for expanding Bitcoin-secured use-cases. These could be facilitated by expanding Bitcoin’s utility through a platform like Core Chain. Happily, this would also benefit Bitcoin itself – with the halving schedule continuing to reduce block subsidies every four years, the question of how to pay miners for securing the network will only grow more important.
Core is the blockchain created in response to the above issues. It has been designed with many goals in mind, including:
Sustainably governing a scalable, EVM-compatible smart contract platform in a way that preserves Bitcoin-caliber network integrity and decentralization.
Leveraging Bitcoin to secure a decentralized, permissionless, trustless, censorship-resistant, self-sovereign, Turing complete, multi-purpose blockchain.
Expanding Bitcoin governance, incentive-alignment, and protection to EVM-compatible smart contracts.
Unlocking Bitcoin DeFi by granting Bitcoin stakeholders easy access to a parallel Bitcoin-secured, Bitcoin-aligned, and hyper-scalable smart contract platform.
Providing Bitcoin miners with increasingly-needed supplemental rewards by having them recycle hash power through Delegated Proof of Work (DPoW).
Using mechanisms like non-custodial staking to turn bitcoin from a passive asset into a productive one (without entering new blockspace), thereby enabling far more bitcoin use-cases while reinforcing its core functionality.
The center of this ambition lies in Core’s novel Satoshi Plus consensus mechanism. Its three basic components are a Delegated Proof of Work (DPoW) technique that leverages the hash power of Bitcoin miners, Delegated Proof of Stake (DPoS), which allows CORE holders to vote for validators, and non-custodial bitcoin staking, which brings Bitcoin holders in to underwrite Core Chain’s security. Together, these make it possible to sustainably govern a scalable smart contract platform in a way that addresses the above goals.
What Sets Core Chain Apart?
Having covered the basic purpose and design goals of Core Chain, the next topic is a discussion of how it differs from protocols designed with similar ambitions.
Stacks: Stacks is a Bitcoin layer 2 aiming to integrate broader DeFi concepts into the Bitcoin ecosystem, but its lack of Ethereum Virtual Machine (EVM) compatibility is a significant limitation. What’s more, Ethereum developers interested in building on Stacks are required to master a new programming language, Clarity that is neither Turing complete nor easily transferable, while these aren’t issues on Core Chain. Stacks also currently suffers from lengthy, inconsistent block times and a suboptimal transaction rate. Although there are plans to enhance block production and processing speed, Core Chain is expected to maintain superior performance in these respects.
Rootstock: Rootstock aims to support Bitcoin DeFi by enabling the creation of decentralized applications and other functionalities that Bitcoin's primary layer cannot handle efficiently. However, Rootstock has struggled to attract a significant number of developers and users – a challenge compounded by the fact that Rootstock is EVM-equivalent rather than EVM-compatible, which places additional demands on developers who wish to build on it. Comparatively, Core Chain offers more efficient processing, with block times that are ten times faster and a transaction rate that far exceeds Rootstock's theoretical capabilities.
Botanix: Botanix aims to integrate the benefits of the EVM with Bitcoin through its Spiderchain primitive. However, Botanix is EVM-equivalent rather than EVM-compatible (just like Rootstock), which is an additional source of friction. Botanix also has yet to be proven in real-world applications; it operates based on new trust assumptions such as an underlying multi-signature (multisig) structure, and it remains to be seen whether Botanix can reliably meet its theoretical benchmarks for block times and transactions per second.
Sovereign rollups: Sovereign Rollups (SRs) aim to improve throughput and enhance smart contract functionality by processing transactions off-chain, then anchoring a summary or proof of these transactions to a settlement layer, like Bitcoin or Ethereum. Currently, these systems lack robust fraud proofs, they rely on trust assumptions that could work against decentralization, and the potential for "MEV" (Maximal Extractable Value) exploitation post-launch remains a concern. Moreover, the implementation of Sovereign Rollups on Bitcoin depends on the introduction of new
op_codesto the Bitcoin protocol, but there's no certainty that these changes will be approved.Babylon: Babylon introduces a Bitcoin restaking protocol that lets users stake their idle bitcoin in exchange for altcoin yields, without the need for bridging or depending on trusted intermediaries. While Babylon aims to realize a portion of what Core Chain’s non-custodial bitcoin staking was designed to achieve, its primary goal isn't to establish a Bitcoin-backed DeFi ecosystem. Furthermore, Core Chain’s Satoshi Plus consensus has the capacity to support restaking; future updates could see Core Chain enhancing its platform to include bitcoin stakers and Bitcoin miners in its governance processes, further distinguishing its services from those offered by Babylon.
Wrapping Up
Core Chain is aimed squarely at expanding Bitcoin’s utility while building the foundation of a better DeFi ecosystem, and though it shares certain things in common with other projects, it is nevertheless very different from them.
If you enjoyed this, check out part II in this series, in which we’ll get into much detail about how Core Chain works under the hood.