Conversation with Core contributor Rich Rines: Bitcoin is already “too big to fail” and Core will be the driver to unlock the trillion-dollar Bitcoin ecosystem

Organized by: Yuliya, PANews

As a value storage asset that manages approximately US$2 trillion in wealth, Bitcoin is being considered as a strategic reserve by various countries. Against this background, PANews exclusively interviewed Rich Rines, an early contributor to Core DAO, to discuss in depth how to promote the transformation of Bitcoin from a simple store of value to a productive asset through innovative scalability solutions.

Background introduction

PANews: How did you get into Bitcoin?

Rich:

I first came into contact with Bitcoin in 2013. Although I had heard about it from a university professor in 2011, I didn’t truly understand its significance until 2013, when I was attracted to Bitcoin’s potential as a non-sovereign store of value, or digital gold.

By 2017, I was working in cryptocurrency full-time, working as the Director of Fund Flow Engineering at Coinbase for four years. The reason why I joined Core later was that I saw that no one was solving Bitcoin's scalability problem. We believe that cryptocurrencies have deviated from the original concept of decentralization, so we decided to start with the most decentralized asset, Bitcoin, and work on solving its scalability problem.

PANews: Our experiences are very similar. I learned about Crypto in 2014, and then devoted myself to the crypto industry and launched PANews in 2017. Bitcoin breaking through 100,000 US dollars is an important milestone. What do you think drove this? Achievement?

Rich:

Bitcoin is now "too big to fail". Its legitimacy has been recognized and it has become part of the traditional financial system and is no longer just a substitute. It is now mainly used as a value storage asset, managing about 2 trillion US dollars of wealth. Bitcoin has now become a collateral asset of 10,000 pieces, and even the country is considering using it as a strategic reserve. I think its market capitalization will at least equal that of gold in the future, or even higher. Bitcoin has become more accessible through tools such as ETFs, and Core further provides faster, lower-cost scaling solutions.

Motivation for building Core DAO

PANews: The approval of the Bitcoin ETF feels like a watershed moment for Bitcoin. What inspired you to build Core DAO?

Rich:

Core was founded by a group of initial contributors. We have observed that the entire cryptocurrency industry has strayed away from the original intention of decentralization. It is worth noting that Bitcoin is the first stop for most people to enter the cryptocurrency field. Even if some people later switch to Ethereum or Solana, Bitcoin is still the common starting point for everyone. We want to return to Bitcoin's original mission. But after in-depth research and analysis, we found that it is impossible to implement certain functions on the Bitcoin base layer. As a settlement layer, Bitcoin does have the characteristics of being slow, expensive, and inflexible, but it is precisely these characteristics that make it an excellent value storage tool.

I have also purchased some very expensive Bitcoins over the past decade. But now, Bitcoin's positioning has changed from a medium of exchange as originally envisioned to a collateral asset. People can use it to borrow stablecoins, which is the right way to expose Bitcoin to billions of people. Core's mission is to enable billions of people to use Bitcoin. Although we are still in the very early stages, we are very enthusiastic about it. We believe that the mass adoption of Bitcoin can truly be achieved by using Bitcoin as a collateral asset to obtain stablecoins.

Introduction to CoreDAO

PANews: Can you introduce Core DAO to Chinese readers in a simple and easy-to-understand way?

Rich:

Core actually consists of two main parts. The first part is the Bitcoin staking product, and the second part is the Bitcoin ecosystem built on EVM. In terms of ecosystem, Core is currently the largest Bitcoin ecosystem on EVM, with over $1 billion in total value locked (TVL) and hundreds of thousands of daily active users.

There are already over 100 decentralized applications running in our ecosystem, with more under development and expected to be launched soon. Our goal is to be able to make Bitcoin work and allow users to participate in Bitcoin DeFi. At present, about 80-90% of the TVL in the Core ecosystem exists in the form of Bitcoin. Users can use Bitcoin for pledge or use Bitcoin as gas fee. These are typical L1 public chain mechanisms, but we use Bitcoin An ecosystem built on the foundation.

We launched the world's first Bitcoin staking product in early April 2024. There are currently approximately $800 million in Bitcoin earning passive income on our platform. What’s special about this product is that it’s non-custodial and users don’t need to worry about multi-signature or trust issues. In November 2024, we also launched a dual pledge mechanism, where users can hold CORE and BTC at the same time to obtain higher returns.

We took a step-by-step approach. You can think of passive staking as an "entry product" - users first earn income through passive staking, and then can earn higher income by holding CORE tokens and participating in double staking, which allows users to gradually become more active. Over time, as we roll out features like trustless bridging, users will be able to more comfortably enter the full Core ecosystem.

For many Bitcoin holders, they may not be ready to fully dive into the world of DeFi, preferring to earn passive income through simple staking. For users who are ready, we welcome them to participate directly in the complete ecosystem. The core idea is to make your Bitcoin really work, and Core is providing greater scalability for Bitcoin.

Double pledge

PANews: For many Bitcoin holders, security is their top concern. How does Core ensure security?

Rich:

Security is indeed the most important consideration. We recommend that everyone understand the trust assumptions and revenue sources before participating in Core or any ecosystem that offers Bitcoin revenue products. If you can't easily explain these basic questions, you shouldn't participate.

I have too many friends who have lost funds due to custody issues on platforms like BlockFi, Genesis, and Celsius, so giving up asset custody rights is absolutely unacceptable. That’s why when Core designed its Bitcoin staking product, it was designed by Bitcoin holders for Bitcoin holders. This means that it is completely non-custodial - you only need to lock the Bitcoin to yourself through a time lock mechanism, and you only need to trust the Bitcoin itself. This is crucial for us to establish cooperative relationships with institutions such as BitGo and HexTrust.

These institutions want to ensure that the product truly suits the needs of Bitcoin holders, as opposed to users who may have just switched from other staking assets such as Ethereum, Solana, etc., because the latter are accustomed to different trust assumptions. Bitcoin holders will not accept these compromises. That's the first point - you just have to trust Bitcoin.

PANews: The next question for many people is: Where will the revenue come from? How to understand these benefits?

Rich:

This is why double collateral is important. Core has an 81-year inflation cycle, which is a very slow decreasing process that is very unique among crypto assets. Because Core was originally designed to be Bitcoin's second block reward, this means that the 75% of Bitcoin's computing power currently entrusted to Core will continue to receive these rewards, which helps them cover operating costs and helps keep Bitcoin Ecosystem security and decentralization.

This inflation curve is also where the benefits come from, since the same benefits are paid in both places. What we pay is CORE tokens, and the total amount is fixed at 2.1 billion. No matter how many Bitcoins or Cores enter the system, there will be no increase or decrease.

Now by double staking, you create another demand driver for the CORE token, which helps increase yields. It can be understood like this:

You are helping to protect the security of the Core chain. If you did this with just Bitcoin, the yield would be lower. If you secure the chain on both the Bitcoin side and the Core side, you can get a higher rate of return, and you just need to understand the CORE token.

We put a lot of work into product development to make it so simple, which is why there's so much adoption because it really meets the needs of users and provides the products and services they want.

Institutional Adoption and CoreFi Strategy

PANews: In addition to retail investors, you mentioned that institutions have also begun to adopt double collateral. We previously reported that a listed company called DeFi Technology launched a CoreFi strategy, which is similar to MicroStrategy’s strategy for accumulating Bitcoin. Why do you think this company adopts this strategy? How does this help Core 's development?

Rich:

They have announced CoreFi, which is scheduled to go live early in the first quarter. Although it is not yet officially operational, the upcoming launch of this project fully proves the DeFi team’s confidence in the Core ecosystem. This is just one example of cooperation among many institutions. Other institutions such as HashNode have also publicly expressed their support for double pledge.

Core's earnings and sustainability are now better understood. There have always been questions about whether these gains are truly sustainable, but now the demand drivers are becoming clearer. We see that these institutions are now very excited about this new use of CORE tokens. It can be understood like this:

CORE tokens can now not only be used for staking, paying gas fees, and governance, but also become a way for Bitcoin to continue to generate income. This is a new feature unique to CORE tokens that no one has ever been able to achieve before.

With the engagement of these institutions, we will move this narrative forward. CoreFi will adopt a strategy similar to MicroStrategy’s to acquire CORE tokens, mainly to serve double staking. Not only will this drive this narrative forward, but it will also increase the overall demand for CORE tokens, which will be very beneficial to the shareholders of this entity.

Institutionalization of CORE

PANews: Institutional adoption has been a key factor in Bitcoin’s success. What progress and future plans does Core have in terms of institutionalization?

Rich:

Recently we have announced cooperation with several custody institutions, including BitGo, Copper, etc., which is very important to solve access issues. Because many large Bitcoin holders must go through these custodians for staking operations. This resolves historic barriers to entry.

On the other hand, institutional investors are assessing the appeal of this strategy. Each fund and institution has its own return goals and focus. We see more and more institutions expressing their desire to generate income from their Bitcoins, but do not want to directly participate in DeFi. At this time, double pledge has become a good option.

They are adopting this strategy at scale because it not only generates returns on Bitcoin but also potentially VC-like returns on Core assets. This is attractive to institutions willing to take directional risk. As more institutions learn about and participate in this type of trading, I believe this narrative will continue to grow, as it is one of the best asset appreciation opportunities in the Bitcoin ecosystem without compromising the security of Bitcoin principal.

The development prospects of Core DAO

PANews: As a member of the blockchain ecosystem, how do you measure the success of a blockchain project? What key indicators does Core pay most attention to?

Rich:

As an infrastructure project, this is a challenging problem. The metrics the market focuses on may not fully correlate with actual success. For example, TVL (total locked value) and number of daily active users - Core ranks first in both indicators. But these do not entirely reflect the success of the business.

We pay more attention to:

• User retention rate
• Is the project ecology developing healthily?
• Is there real trading volume and activity?

Many Bitcoin scaling solutions may have high TVL, but are actually "empty chains". Therefore, multiple indicators need to be considered comprehensively, because a single indicator may be manipulated. We focus more on product-market fit, taking a product-led rather than a purely research-led approach. This approach has worked well so far and we will continue to develop in this direction.

PANews: What are your expectations for the future development of Bitcoin and Core?

Rich:

The Core community is quite diverse, with builders from all over the world. Our core goal is to find and support teams who are committed to developing substantive businesses on Core. Unlike other L1/L2 projects, Core builders generally focus more on long-term development. It is worth noting that Core does not have a funding program in the traditional sense, but adopts a method closer to the Web2 recommendation program or reward mechanism: to become part of the incentive program, builders need to make value contributions by bringing actual user numbers, TVL, etc. to obtain corresponding returns.

For Bitcoin, I think technological progress such as Bitcoin Core development (such as the new OpCode) may be slower than people expect. This is a highly political and slow process, although this caution is important to ensure the security of Bitcoin. I don't expect there to be a new OpCode in 2025, maybe until 2026. However, I believe that BitVM2 or BitVMX will be launched on the mainnet in 2025, which is very exciting.

Bitcoin has achieved solid product-market fit as a collateral asset, making it attractive not only to funds but now to countries as well. Core is driving the next phase of development - making Bitcoin a collateral asset for the 3-4 billion people around the world who are unbanked or underbanked.

We expect to see people using Bitcoin as collateral to obtain stablecoins and leverage on scaling solutions like Core. This could be the next wave of Bitcoin adoption, potentially taking Bitcoin holders from millions to billions. This is a mission that will take ten years to fully realize, but we are already making progress in this direction.