August 9, 2022

BitGo incorporates Stacks to bring Bitcoin DeFi to organizations

2 min read

BitGo, a service provider of institutional-grade liquidity, custody & & security for digital assets, today revealed support for Stacks, a network that has created the technology needed to bring applications and smart contracts to the Bitcoin network.

In order to match the need for institutions wanting to hold bitcoin, BitGo will now offer institutional token holders the chance to make BTC benefits for holding Stacks’ native token (STX) in a process known as Stacking. This in turn makes Bitcoin DeFi instantly available to big banks and BitGo’s massive network of customers.

Compared to other popular yield-earning solutions in the market, the bitcoin yield from Stacking is not generated by means of a loaning action, suggesting that token holders do not need to lend their funds out in order to make a benefit. Rather, the yield is obtained directly from the Stacks’ agreement mechanism that connects the Stacks blockchain to the Bitcoin blockchain.

In a regulatory environment that just saw Coinbase shutter its Lend feature, making a yield of this nature might be extremely appealing to institutions as well as everyday users wanting to stay away from potential regulatory unpredictability or penalties. It also gets rid of one element of the risk usually associated with lending-based yield in that there can be no customer defaults.

“BitGo’s assistance for Stacking and the Stacks is yet another example of how the Stacks ecosystem and its advocates are leading the Bitcoin DeFi motion. Organizations can now participate what countless Stackers have actually been enjoying since the launch of Stacks 2.0, a yield paid in bitcoin at industry-leading APYs without the common threats of staking choices.”
– – Mitchell Cuevas, Head of Growth at the Stacks Foundation

Stacking shares some homes with staking, with some key differences. Initially, in staking plans, the yield is usually paid in the exact same asset that was staked and then often traded out of. In Stacking, the yield is paid to the ‘‘ Stacker’ directly in BTC.

Staking vs. Stacking

With Stacks (STX) contributed to BitGo, consumers will have access to BitGo’s insurance, property defense, portfolio management, and tax reporting tools. BitGo’s integration with Stacks likewise offers users alternatives to save Stacks tokens in custody, digital wallets, multi-sig wallets, or make yield in BTC by means of Stacking.

“Financial institutions have been desiring a safe and protected way to enter the DeFi space. By onboarding support for Stacks and STX, we are providing our clients what they desire – – bitcoin and paradigm-shifting crypto-assets like STX, without the requirement for pricey facilities investments.”
– – BitGo’s Co-Founder CEO, Mike Belshe

The post BitGo integrates Stacks to bring Bitcoin DeFi to institutions appeared initially on CryptoNinjas.