Understanding Chakra: Providing Secure Restaking Yields for Bitcoin with Zero-Knowledge Proofs
TechFlow Selected TechFlow Selected
Understanding Chakra: Providing Secure Restaking Yields for Bitcoin with Zero-Knowledge Proofs
Through the Chakra protocol, Bitcoin holders can enjoy multiple yields without worrying about the security risks of restaking.
Navigating Web3 tides with focused insightsAuthor: Chakra
Translation: TechFlow
Introduction
As the market recovers, Bitcoin's market capitalization has now reached an astonishing $1 trillion, positioning it as a form of digital gold. However, for the most part, it remains largely idle. The majority of Bitcoin sits dormant in users' cold wallets and across various exchanges worldwide, rather than actively participating in the blockchain network or generating yield for its holders. Therefore, Bitcoin's potential extends far beyond its current usage and applications.
The Chakra protocol aims to build a secure proof-of-stake system for Bitcoin, activating liquidity for long-held Bitcoin assets while providing decentralized services maintained by asset holders. As a Bitcoin restaking protocol, it seeks to leverage the strongest blockchain network to secure new chains and applications, using cutting-edge zero-knowledge proof technology to unlock economic potential for Bitcoin holders.
The challenge is clear: Bitcoin holders want to benefit from staking rewards without compromising the security of their Bitcoin.
How Chakra Works
Chakra steps forward to solve this problem. Through the Chakra protocol, Bitcoin holders can enjoy multiple yields without worrying about the security risks associated with restaking.
What makes Chakra unique in Bitcoin restaking?
Self-Custodial Staking
Bitcoin enthusiasts trust Bitcoin because of its highly decentralized nature and robust security. Therefore, compromising security for staking rewards could be a major concern. Our solution allows Bitcoin holders to stake without transferring their assets out of their own wallets. This is achieved using time-lock scripts, ensuring no third-party risk is involved.
ZK-Based Proof of Staking
In our solution, Bitcoin staking events are proven via zero-knowledge proofs, which can be verified off-chain to access on-chain information without connecting directly to the Bitcoin network. We will use STARKs to implement the proof system. Compared to SNARKs, STARKs provide a zero-knowledge proof solution that requires no trusted setup, while their mechanism ensures enhanced security.
Restaking Services
Proofs of staking can be validated in various contexts, granting stakers multiple rights and enabling a suite of services maintained by stakers. Each right or service can be customized to meet specific needs—such as AI, DeFi, gaming—and all are facilitated and secured by Bitcoin holders. Bitcoin holders only need to stake once, after which they are empowered to expand Bitcoin’s utility across many dimensions.
Applications of Chakra
The Chakra protocol supports a wide range of Bitcoin applications, leveraging Bitcoin's strong security while unlocking liquidity for Bitcoin assets.
Bootstrapping New Bitcoin Layer 2s
Proofs of staking can be verified on Bitcoin Layer 2 networks, allowing stakers to participate in Layer 2 consensus and governance. These Layer 2s share Bitcoin's security and offer data availability services and execution environments maintained by stakers. For example, we could launch a Bitcoin Layer 2 maintained by stakers and running alongside the Cairo VM.
Delivering Diverse Yields to Stakers
Proofs of staking can be used to create derivatives of Bitcoin assets, giving users opportunities to utilize Bitcoin-backed assets within DeFi protocols. For instance, similar to stETH in the Ethereum ecosystem, we could leverage the Chakra protocol to issue stBTC and build DApps that interact with it.
Join TechFlow official community to stay tuned
Telegram:https://t.me/TechFlowDaily
X (Twitter):https://x.com/TechFlowPost
X (Twitter) EN:https://x.com/BlockFlow_News
@ChakraChain
