As a Bitcoin re-pledge protocol, the goal of the Chakra protocol is to establish a secure Bitcoin proof-of-stake system, enable liquidity for long-term Bitcoin assets, and provide decentralized services maintained by asset holders. This article is sourced from the official Chakra and compiled, organized, and written by TechFlow.
Table of Contents
How Chakra Works
Self-Custody Pledge
ZK-based Pledge Proof
Re-pledge Service
Applications of Chakra
Guiding the New Bitcoin Second Layer
Bringing Various Benefits to Pledgers
With the recovery of the market, Bitcoin’s market value has once again surpassed $1 trillion, positioning itself as a form of digital gold. However, currently, it mostly serves as an idle asset.
Most Bitcoins remain static in users’ cold wallets and various exchanges around the world, rather than actively participating in the blockchain network or generating benefits for holders. Therefore, the potential of Bitcoin far exceeds its current usage and application scope.
The goal of the Chakra protocol is to establish a secure Bitcoin proof-of-stake system, enable liquidity for long-term Bitcoin assets, and provide decentralized services maintained by asset holders. As a Bitcoin re-pledge protocol, it aims to leverage the most powerful blockchain network to secure new chains and applications using front-end zero-knowledge proof technology, unlocking the economic potential for Bitcoin holders.
The challenge is obvious. Bitcoin holders desire to benefit from pledge income without compromising the security of their Bitcoin.
How Chakra Works
Chakra steps up to address this issue. Through the Chakra protocol, Bitcoin holders can enjoy multiple benefits without worrying about the security issues of re-pledging. What makes the Chakra protocol unique in terms of Bitcoin re-pledging?
Self-Custody Pledge
Bitcoin enthusiasts trust Bitcoin due to its highly decentralized nature and robust security. Therefore, compromising security for pledge income can be a major concern.
Our solution allows Bitcoin holders to pledge without transferring assets out of their own wallets. This is achieved using time-locking scripts, ensuring no involvement of third-party risks.
ZK-based Pledge Proof
In our solution, the pledge events of Bitcoin are proven through zero-knowledge proofs, which can be verified off-chain to access on-chain information without connecting to the Bitcoin network.
We will use STARK to implement the proof system. Compared to SNARK, STARK provides a zero-knowledge proof solution that does not require trusted setups, while ensuring enhanced security.
Re-pledge Service
Pledge proofs can be verified in various places, granting multiple rights to pledgers and providing a range of services maintained by pledgers. Each right or service can be customized to meet specific needs, such as AI, DeFi, games, etc., all guaranteed by Bitcoin holders.
Bitcoin holders only need to pledge once, and then they are authorized to expand their Bitcoin suite in many aspects.
Applications of Chakra
The Chakra protocol supports various Bitcoin applications, leveraging the powerful security of Bitcoin while unlocking liquidity for Bitcoin assets.
Guiding the New Bitcoin Second Layer
Pledge proofs can be verified on the Bitcoin second layer, allowing pledgers to participate in the consensus and governance of the second layer. These second layers share the security of Bitcoin and provide data availability services and execution environments maintained by pledgers. For example, we can launch a Bitcoin Layer 2 maintained by pledgers and run it with Cairo VM.
Bringing Various Benefits to Pledgers
Pledge proofs can be used to create derivatives of Bitcoin assets, providing opportunities for users to use Bitcoin-supported assets in DeFi protocols. For example, similar to stETH in the Ethereum ecosystem, we can utilize the Chakra protocol to issue stBTC and build DApps that interact with it.
Related Reports
Hotspots to Watch in the Bitcoin Ecosystem: Ordinals, Atomicals, Taproot Assets…
Bitcoin Ecosystem: BRC-20 Faces Double Spending Attack Crisis! Magic Eden Announces Trading Suspension
Nakamoto Version to be Released by Stacks: Beneficial for Liquidity Integration in the Bitcoin Ecosystem?