Liquid Staking First Principles

Maximizing Rewards with BTC: The Most Capital-Efficient Method

Staking allows BTC token holders, such as those who purchased BTC on an exchange or bridged to Botanix, to assign some or all of their tokens to specific validators. This process enhances the voting power of these same validators.

There are two ways to participate in staking: directly staking to a validator or delegating to a stake pool. In either scenario, delegators maintain control over their staked tokens.

Stake Pools <> Liquid Staking

On Botanix, stake pools consist of multiple validator nodes. By delegating to a stake pool, you can distribute your stake across numerous validators simultaneously. In return, you'll receive a liquid stake pool token (e.g., rovBTC) that can be immediately utilized in DeFi, providing instant liquidity.

Network Advantages

Stake pools contribute to the network's decentralization by spreading stake across various validator nodes. Each stake pool has distinct criteria and strategies for validator selection, with some pools requiring geographic decentralization and meeting specific performance standards for validators.

Instant Liquidity and DeFi

Liquid staking tokens gain utility from their ability to integrate with DeFi. RovBTC has partnered with key DeFi partners throughout Botanix, and we anticipate a wide range of integrations in the coming months. Learn more by visiting the ecosystem page.