Below is a guest and opinion of Hong Sun, the head of the institutions in Core Dao.
Traditional financial institutions began to benefit from BitcoinThe price estimate – but they do this in optimal ways. Most of them sit on Bitcoin as if it were cash, as it ignores exposure to prices with its productive capabilities. This will not last. Soon or later, Wall Street will search for more efficient uses in bitcoin possessions.
But in encryption, caution is very important. We have seen how the pursuit of the return – without understanding the basic risks – can bring in reverse results. Fortunately, bitcoin yield products are no longer safe and sustainable that reduce the main theoretical risk. They are available today.
Lessons 2022: Not all return is equal
Bitcoin-Holding institutions should be reflected on the last encryption date. The collapse of the year 2022 revealed the risk of searching strategies for a shaky bases. A number of companies with a conference-Voyageer, Blockfi, Celsius, Three Arrows Capital and FTX- now the Cemetery Cemetery, now fell prey to the management of weak risks and irresponsible promises.
Lesson? Not all return is created on an equal footing. Several alleged yield products have introduced new layers of risk-opposite exposure, weaknesses in the nursery, reduction mechanisms, and smart nodes. This has proven to be a killer for companies that have made a mistake.
The main problem is that bitcoin, contrary to ethereumNot providing the original STAKING bonuses by proving them on the business model. So to earn the return, their holders were historically pushed to lend, rehabilitate or provide liquidity-and all of them come with the bodies of confidence.
Bitcoin holders face a dilemma: on one side, they enjoy your self -security and uncompromising security. On the other hand, the temptation of the return. But filling that gap should not require a leap of faith.
Time timing: Hodl function in Bitcoin
Bitcoin does not support smart contracts the way Ethereum does, but it has a strong original feature: Timelocking. It is designed to allow users to “Hodl” with sporting certainty – by locking BTC so that it cannot be transferred even a specific future block – timing has long been exploited.
Now, this Hodl mechanic itself opens a new border: generating the return without giving up the nursery.
Innovation lies in a new model of integrity that Bitcoin itself uses – not a wrapped version – as the roof. Through the function of the Check Lock Time (CLTV) from Bitcoin, BTC lock holders can participate in securing Blockchain networks to earn the return, all while maintaining full control. Bitcoin remains in their wallet. It cannot be transferred, rehabilitated or lost – however, becomes fruitful.
This is exactly the level of security required by financial institutions. There are no new confidence assumptions. No reduction. Do not complicate the smart nodes. Only bitcoin – used as designed – with an additional incentive.
Institutions are already moving
Institutional adoption of this model is already underway. Valor Inc. It is a subsidiary of Defi Technologies, the first bitcoin-bearing in the world using this mechanism-combining bitcoin custody with the advantages of performance for safe roaming.
These solutions allow institutions to overcome risky and speculation trading strategies. For the first time, Bitcoin can only act as a value-trial-but also as a category of fruitful assets and generation.
From negative holdings to active participation
For institutions that maintain Bitcoin via the trustee or the traded investment funds, Bitcoin today is one of the negative assets. The nursery and management fees stop at the returns, which contradicts the basic thesis of Bitcoin, such as hyperplasia and value storage.
Securing the bitcoin return changes that equation. Institutions can now generate the return with the support of decentralized networks-a meaningful bridge between traditional financing and the original systems in Blockchain.
This development is still in its early stages, but the trend is clear: Bitcoin’s future is not idle. It is active, integrated, and corporate alignment.
Ready -made meals
Bitcoin’s return – was done properly – no longer requires new confidence assumptions or exposed to unparalleled products. It is based on the Bitcoin security model, using Timelocks – originally HODL – to protect the manager while generating the returns.
As financial institutions continue for this development, the competitive edge will go to those who behave early. The question is no longer if it is possible to return the institutional bitcoin. It is: What will you do with it?
