Ether.fi Staked BTC (EBTC)

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Yield Generation and Dual-Yield Structure

Ether.fi Staked BTC is a Bitcoin-backed liquid restaking token that allows Bitcoin holders to earn yields through a dual-yield mechanism. This means users can stake and restake their BTC simultaneously to maximize returns. It offers a secure, non-custodial way to generate rewards while maintaining control of assets.

DeFi Integration and Liquidity

It enables Bitcoin holders to participate in Ethereum-based decentralized finance (DeFi) applications without selling their BTC. The token is built on Ethereum, leveraging smart contracts for transparency and security. It is integrated with over 400 DeFi protocols, allowing users to use their staked BTC in various DeFi activities while keeping liquidity.

Collateral and Trading Use

Ether.fi Staked BTC can be used as alternative collateral within restaking protocols, expanding its utility in the DeFi ecosystem. It is tradable on decentralized exchanges, providing flexibility for users to buy, sell, or swap the token while retaining exposure to Bitcoin’s value.

Institutional and Individual Use

The token supports both individual and institutional users by offering scalable staking solutions with compliance and custody options. It is designed to optimize yield while ensuring assets remain secure and liquid.

In summary, Ether.fi Staked BTC lets Bitcoin holders earn extra rewards by staking and restaking their BTC in a liquid, DeFi-compatible form, while keeping full control and flexibility over their assets.

Pros

• Ether.fi Staked BTC offers combined staking and restaking yields by integrating with platforms like Babylon, EigenLayer, Symbiotic, and Karak, which can boost rewards.
• It provides liquidity and flexibility, allowing users to use their staked tokens in other DeFi protocols while still earning rewards.
• The token is Bitcoin-backed, supporting deposits of LBTC and WBTC, and is compatible across multiple blockchain networks with a consistent contract address.
• The system is non-custodial and secure, with assets restaked to support the Ethereum ecosystem.
• It has over 400 integrations across DeFi, centralized exchanges, and OTC markets, enhancing usability and trading options.
• No lockups and full control over assets are maintained by users.
• Institutional-grade product experience with custom custody integrations and compliance focus.
• The dual-yield mechanism (staking and restaking) optimizes yield opportunities.

Cons

• Rewards can be marginally reduced due to ETH held in liquidity pools for quicker withdrawals.
• A significant increase in new stakers can temporarily lower staking rewards until more validators join.
• Large holders can impact the price significantly with big sell orders.
• The price of Ether.fi Staked BTC has experienced recent declines and volatility.
• Some users report issues with staking and unstaking functions and fees.
• Exposure to smart contract risks inherent in DeFi protocols.
• Restaking depends on third-party protocols, which may introduce additional complexity.

Overall, Ether.fi Staked BTC provides a flexible, liquid, and yield-optimized way to stake Bitcoin-backed assets with broad DeFi integration, balanced by some market volatility and technical considerations.

Founders

The founders of Ether.fi Staked BTC are Mike Silagadze and Rok Kopp. Mike Silagadze is also the CEO of EtherFi and has over 15 years of entrepreneurial experience.

Background

Mike Silagadze founded EtherFi in 2022, focusing on liquid staking products and DeFi innovations. The company is based in the Cayman Islands and has quickly grown with significant deposits and funding rounds.

Investors in Ether.fi Staked BTC

The investors in Ether.fi Staked BTC include a mix of venture capital firms, crypto-focused investment groups, and notable individuals:

• Venture Capital Firms and Crypto Funds: CoinFund, Bullish, Amber Group, Bankless Ventures, OKX Ventures, ConsenSys, Foresight Ventures, Fourth Revolution Capital, Punk Ventures DAO, White Star Capital, Relayer Capital, Collider Ventures, Lvna Capital, Draper Dragon, Arrington Capital, North Island Ventures, Chapter One, Version One Ventures, Node Capital.
• Notable Individual Investors: Stani Kulechov, Sandeep Nailwal, Defi Dad, Parallel, Will Price, leptokurtic, MrBlock.
• Previous Round Investors: Arthur Hayes, Purpose Investment, and Arrington XRP Capital.

These investors participated in funding rounds such as a $27 million Series A round and earlier rounds, supporting the development and growth of the Ether.fi protocol and its products like Ether.fi Staked BTC.

Halal Status of Ether.fi Staked BTC

Ether.fi Staked BTC has a comfortable halal rating according to Practical Islamic Finance, indicating it is generally considered halal. This rating reflects that the protocol operates by staking Bitcoin on Ethereum in a decentralized way, without involving interest (riba) or unethical activities.

Reasoning

• The staking mechanism involves securing the network and earning rewards as a return for work done, which aligns with Islamic finance principles.
• The protocol is transparent and does not engage in lending or interest-based activities.
• Similar staking models, like Ethereum staking, have been reviewed by Islamic scholars and found halal when done under proper Shariah frameworks.
• Ether.fi’s approach to staking BTC on Ethereum is consistent with these principles, making it permissible.

Answer: Yes, Ether.fi Staked BTC is halal because it involves earning rewards through network participation without interest or prohibited activities.