What Is Acre & How Can You Stake BTC With It?

Staking has become a popular way to earn yield on digital assets, all thanks to Proof of Stake chains and DeFi protocols. But, if you’re a Bitcoin holder, you’ve been left out of the staking party—until now.

The Bitcoin liquidity layer Acre provides a Bitcoin staking service that allows you to earn a yield on your BTC. 

Read on to learn about Acre and how to stake bitcoin on its platform using Xverse wallet.

What Is Staking? 

Staking refers to “locking up” a crypto asset to support the operations of a crypto protocol. For this, users who stake (also referred to as stakers) are rewarded with a percentage-based amount that varies depending on different factors.

‍Staking is the primary way to govern and provide security for proof-of-stake-based blockchains. It also ensures that everyone participating in a blockchain’s decision-making process has more to lose than potentially gain if they act against the blockchain’s best interests.

For many stakers, this process is a way of being rewarded for deploying their tokens on the blockchain. Others can choose to take on a more active role in the governance of the project.

Can You Natively Stake Bitcoin? 

No, you can’t natively stake bitcoin. 

In its original form, crypto staking comes from the Proof of Stake (PoS) consensus mechanism. In this system, validators stake a portion of their holdings to participate in confirming transactions, securing the blockchain, and making governance-related decisions. In return, they are rewarded with fees and newly minted tokens.  

Bitcoin uses a Proof of Work (PoW) consensus mechanism based on computational power instead of staking. In other words, Bitcoin’s whole governance model has no connection to staking.

That’s why there’s no native bitcoin staking. 

What Is Bitcoin Staking? 

While you can’t stake bitcoin natively, the demand for earning yield on BTC has led builders to develop bitcoin staking opportunities.

Most bitcoin staking options involve wrapping BTC into a fresh token and deploying it in a DeFi protocol on another chain.

However, a new breed of Bitcoin staking protocols is emerging, led by the likes of Acre, that allows you to deposit native BTC to earn staking rewards, paid out in tokenized BTC (tBTC). 

Introducing Acre: Bitcoin Staking Protocol 

Acre is “the new liquidity layer for Bitcoin scaling,” which allows you to deposit BTC in exchange for staking rewards paid out in stBTC, a tokenized version of bitcoin. 

The new platform eliminates the hassle of exploring BTC staking platforms by automatically dividing the deposited bitcoin among various protocols and pools on your behalf.

Acre’s integration with the Xverse wallet means that you can stake bitcoin with just a few clicks, making bitcoin staking accessible to everyone.

What Bitcoin Staking Rates Can You Expect From Acre?

The bitcoin staking rates Acre offers depend on several factors, including the current need for tBTC among Layer 2s using the Acre system as their liquidity provider, their rates, and the amount you deposit.

At this time, Acre doesn’t have any rate shown on their dApp because the protocol can’t make a guarantee to their potential users. The actual potential rates depend on the L2 solutions being used.

From the amount received from them, Acre claims 10% of the reward for the protocol, and the rest is credited to your account. This helps run the protocol, adding new L2s in need of liquidity and, therefore, more options for rewards.

How Does Bitcoin Staking Work With Acre?

To stake bitcoin on Acre, you need to deposit BTC to receive stBTC tokens that represent your deposited native BTC. Your deposited BTC is converted into tBTC by Acre and then deployed in various Bitcoin L2s to earn a yield.

Your deposited BTC is held in a 51-of-100 multi-signature wallet operated by decentralized nodes.

‍stBTC is a non-rebasing token, meaning that the staker’s balance of this token remains the same, but its value increases. For rebasing tokens, it works the other way around—the number of tokens increases while the value remains the same.

Acre uses tBTC as the Bitcoin bridge between Bitcoin and other chains, allowing communication with protocols that require Acre-provided liquidity.

Finally, your deposit is distributed using the Acre Dispatcher. It uses a yield and risk-optimized strategy to determine the proportion of BTC allocation. That’s where your yield comes from!

The Acre Dispatcher’s allocation is decided by a monthly vote by holders of veACRE, the protocol’s governance token.

How to Connect Xverse to Acre to Stake BTC 

Getting started with Acre is easy.

1. Connect your Xverse wallet to the protocol. If you don’t have an Xverse wallet yet, setting one up is quick and painless.
   

2. Follow the prompts on your screen to connect your wallet to the protocol. Once you’re done, depositing your funds is only a couple of clicks away.

Enter the amount you want to deposit, and that’s all you have to do!

3. You may have to wait until the transaction confirmation rolls in, which will be shown on your dashboard.

4. After that, the dashboard will also show you the rewards you’ve accumulated since your deposit. This will allow you to decide when to withdraw, whether to deposit more, or simply sit back and watch the reward amount change.

And that’s it! 

That’s how easy it is to stake BTC with Acre and Xverse.

Download Xverse and connect it to Acre if you want to start staking bitcoin.

Disclaimer: This article is for informational purposes only and should not be considered financial, investment, or professional advice. While we aim to provide clear and accurate information about Bitcoin staking with Acre, this content is not an endorsement or recommendation to engage in any financial activities. Staking cryptocurrencies carries risk, so it's important to do your own research and consult with a financial advisor before making any decisions.

FAQs

What does staking bitcoin mean?

Bitcoin doesn’t natively support staking. 

However, there are dedicated Bitcoin staking protocols like Acre that allow you to deposit BTC to earn staking rewards paid out in tokenized bitcoin. Alternatively, you can wrap bitcoin and deposit the wrapped bitcoin tokens across DeFi protocols across other blockchain ecosystem to earn staking rewards on your wrapped bitcoin. 

How much can you make staking bitcoin?

There is no set amount that you can make by staking bitcoin. Different protocols offer different incentives. This is why Acre aggregates an ever-growing number of protocols. This way, users can get the best rates without having to choose the protocol options themselves.