Summary of our Research with Vanderbilt Blockchain: Exploring the Core Network
In this summary article, we unpack key insights from our recent research collaboration with Vanderbilt Blockchain and College DAO. Over the past few months, we embarked on a deep exploration of the Bitcoin ecosystem to understand how different solutions are bringing programmability to Bitcoin. As one of our first major research collaborations, we’re thrilled to share our findings with you.
About the Research Collaboration
This initiative was spearheaded by the Vanderbilt Blockchain Club and College DAO, driven by a shared mission to explore cutting-edge blockchain ecosystems. Our collaboration brings together students from diverse academic backgrounds to engage with transformative technologies and industry leaders. United by a passion for advancing decentralized systems and blockchain research, we’ve sought to break new ground in understanding Bitcoin-aligned chains. To make these complex technologies more accessible, we aimed to demystify them and present them through the student perspective.
Check out the full report here.
Introduction
Bitcoin stands as the most secure and battle-tested blockchain in existence. Yet this very success has exposed a fascinating paradox: the more valuable Bitcoin becomes, the more compelling the opportunity to expand its utility, and the more crucial it becomes to preserve its core principles. This tension — between expanding utility and preserving the principles that created that value in the first place — has sparked an increasingly rich exploration of blockchain innovation.
The stakes are enormous. Bitcoin’s massive capital base represents not just value, but trust — trust earned through years of unwavering commitment to security and decentralization. Every attempt to expand Bitcoin’s capabilities must grapple with this reality. The Lightning Network’s introduction in 2015 marked the first major attempt at scaling, followed by a wave of Layer 2 solutions, each making different trade-offs between security, scalability, and decentralization.
Recent events have made this challenge even more acute. By April 2024, transaction fees soared to $128 as Ordinals and broader ecosystem activity pushed Bitcoin’s base layer to its limits. This pressure has intensified the search for scaling solutions, spawning a proliferation of approaches from ZK rollups to sidechains. Yet most of these solutions face a common dilemma: they either compromise Bitcoin’s core principles or fail to fully unlock its potential.
Limitations of Bitcoin
Despite its unrivaled security and decentralization, Bitcoin faces inherent limitations that constrain its scalability and broader utility. The network’s restricted block size allows for only about 5–7 transactions per second, a throughput insufficient for the demands of modern global finance.
Additionally, Bitcoin’s average confirmation time of around 10 minutes introduces delays unsuitable for real-time applications and everyday transactions. This latency hampers its practicality in a world that increasingly values immediacy. Moreover, Bitcoin’s scripting language lacks Turing completeness, limiting it to basic transaction validation without supporting complex smart contracts or decentralized applications. This restricts developers from building advanced functionalities directly on the Bitcoin network.
These deliberate design choices prioritize security and decentralization but pose significant challenges as demand grows for more scalable and versatile blockchain solutions. The pressures of increased network activity and soaring transaction fees underscore the urgent need for effective scaling strategies that enhance Bitcoin’s capabilities without compromising its core principles.
The Evolution of Bitcoin Scaling
Bitcoin’s journey toward scalability has been marked by careful, deliberate steps. The Lightning Network emerged as the first Layer 2 solution, introducing state channels for off-chain transactions. Subsequent developments like SegWit (BIP-141) and Taproot (BIP-340) upgrades enhanced Bitcoin’s base layer capabilities, while innovations like BitVM opened new possibilities for smart contract computation.
However, 2023 marked a turning point. The surge in Ordinals and broader ecosystem activity pushed Bitcoin’s transaction fees to unprecedented levels. This pressure intensified the search for scaling solutions, leading to a proliferation of approaches:
- Sidechains (like Rootstock)
- ZK rollups (like Merlin)
- Hybrid solutions (like Bitlayer)
- State channels (Lightning Network)
Why Core Network Stands Out
In our exploration of Bitcoin-aligned chains, Core Network emerged as a unique case study. Unlike other solutions that primarily focus on technical scaling, Core addresses the fundamental tension between Bitcoin maximalism and DeFi innovation through what we call “additive functionality” — enhancing Bitcoin’s properties while expanding its capabilities.
Core Network introduces additive functionality through its innovative Satoshi Plus consensus mechanism, which combines Bitcoin’s Proof of Work (PoW) with Delegated Proof of Stake (DPoS) and Non-Custodial Bitcoin Staking. By incorporating Ethereum Virtual Machine (EVM) compatibility, Core allows developers to deploy complex smart contracts and decentralized applications (dApps) on a network secured by Bitcoin’s hash power. This effectively bridges the gap between scalability and programmability without compromising Bitcoin’s foundational principles.
The Train Track Analogy
Imagine Bitcoin as a reliable but straightforward railway system — exceptionally secure and dependable for transporting goods (transactions) but limited in speed and the variety of cargo it can handle. Ethereum represents a high-speed rail network capable of handling more passengers (transactions) and offering advanced services (smart contracts and dApps), but it doesn’t have the same foundational strength.
Core Network acts as an innovative junction that connects these two railway systems, combining the strength of Bitcoin’s infrastructure with the versatility of Ethereum’s capabilities. This connection is facilitated by the Satoshi Plus consensus mechanism:
- Delegated Proof of Work (DPoW): Think of DPoW as extending Bitcoin’s sturdy tracks to reinforce the new junction. Bitcoin miners contribute their existing hash power to secure Core Network by embedding metadata into their mining operations — much like strengthening the junction without extra resources. This process utilizes Bitcoin’s security without additional energy expenditure.
- Delegated Proof of Stake (DPoS): DPoS is akin to community members investing in the operation of the new junction. CORE token holders and Bitcoin holders stake their assets, delegating their power to trusted validators who ensure smooth network operations. This democratic process enhances scalability and efficiency, allowing the junction to handle increased traffic without congestion.
- Non-Custodial Bitcoin Staking: This feature allows Bitcoin holders to participate in securing the new junction without leaving their original train or giving up control of their assets. It’s like passengers contributing to the railway’s improvement while still enjoying their original route — enhancing the network without additional risk or sacrifice.
By integrating these elements, Core creates a symbiotic relationship between Bitcoin and itself:
- Enhanced Security: The junction (Core Network) is fortified using Bitcoin’s hash power, ensuring that all trains (transactions and dApps) are protected by the highest security standards.
- Increased Functionality: The connected tracks enable high-speed trains (smart contracts and dApps) to operate efficiently, offering advanced services without compromising safety.
- Mutual Benefits: Bitcoin miners and holders receive additional rewards for their participation, incentivizing them to support the expanded network. This collaboration strengthens both the original tracks and the new junction.
Beyond this consensus mechanism, we also see how Core’s approach differs from its competitors in several crucial ways:
- Unlike Stacks or Babylon, which rely heavily on Bitcoin for data anchoring, Core creates a symbiotic relationship between itself and the bitcoin network.
- Unlike Merlin’s centralized bridge approach, Core implements non-custodial Bitcoin staking.
- Unlike Rootstock’s merged mining, Core’s DPoW system actively contributes to Bitcoin’s security budget.
Key Research Findings
Our investigation revealed several significant aspects of Core’s implementation:
1. Security Budget Enhancement Phenomenon
Active Contribution to Bitcoin’s Security:
- Core’s Delegated Proof of Work (DPoW) mechanism increases Bitcoin’s security budget by providing additional rewards to miners.
- By embedding metadata into their mining operations, Bitcoin miners can simultaneously secure both Bitcoin and Core networks without extra energy costs.
- This creates a virtuous cycle where increased mining profitability leads to enhanced network security for Bitcoin.
Alignment of Incentives:
- Miners are incentivized to participate in Core’s network, aligning the economic interests of both Bitcoin and Core.
- The additional rewards encourage miners to continue investing in Bitcoin’s infrastructure, strengthening its resilience.
2. Expanding Bitcoin’s Utility Without Compromise
EVM Compatibility:
- Core’s integration of EVM allows for complex smart contracts and dApps to run on a Bitcoin-secured network.
- Developers can leverage existing Ethereum tools and frameworks, reducing the learning curve and accelerating innovation.
Non-Custodial Bitcoin Staking:
- Enables Bitcoin holders to earn yields without relinquishing control of their assets.
- Introduces a native yield mechanism, enhancing Bitcoin’s appeal as a yield-generating asset.
Dual Staking Mechanism:
- Users can stake both Bitcoin and CORE tokens to unlock higher rewards.
- This fosters deeper economic integration between Bitcoin and Core, promoting long-term participation.
3. Fueling Ecosystem Growth
Significant Staking Participation:
- Over 5,669 BTC staked in the Core network, despite traditional maximalist resistance, indicating strong community engagement.
Consistent Growth in User Activity:
- Daily active addresses exceed 100,000, reflecting widespread adoption and a vibrant ecosystem.
Substantial Ecosystem Funding:
- A $200 million Ecosystem Fund driving strategic development, supporting projects, and fostering innovation within the Core network.
Developer Engagement:
- Continuous growth in the number of active developers, encouraged by Core’s compatibility with familiar tools and languages.
- Initiatives like the Core Ignition Program and Core Venture Fund support developers and attract new talent.
Looking Forward
Core’s emergence signifies a new chapter in blockchain evolution, where different chains work together to enhance each other’s strengths. The recent Fusion upgrade exemplifies this, introducing key improvements that further establish Core as a prominent platform for dApps in the Bitcoin ecosystem.
The Fusion upgrade brings two notable features: Dual Staking and LstBTC. Dual Staking allows users who stake BTC to also stake CORE tokens, potentially increasing their rewards. This approach aims to strengthen the integration between Core and Bitcoin while enhancing the decentralized capabilities of the ecosystem.
LstBTC, a token pegged 1:1 to BTC, introduces a new dynamic between staking and liquidity. By enabling BTC holders to earn CORE token rewards while maintaining the liquidity of their Bitcoin, LstBTC presents an intriguing option for participants in the ecosystem.
These upgrades seek to improve the user experience for Core stakers and attract more participants to the network. The potential for increased rewards and scalability provided by the Fusion upgrade further reinforces Core’s position in the Bitcoin staking landscape.
As Core continues to evolve, it presents opportunities for developers to create and deploy dApps on a Bitcoin-secured network. The current landscape suggests potential for builders to establish themselves on a chain closely aligned with Bitcoin’s principles. With its technical foundation, engaged community, and ecosystem support, Core aims to foster an environment conducive to innovative dApps.
With over 100 EVM-compatible dApps, under the protection of Bitcoin miners and stakers, Core is positioned as the leading Bitcoin scaling chain. As it continues to evolve, Core aspires to be a platform that attracts more developers seeking to create robust and scalable dApps. By encouraging innovation and collaboration, Core aims to contribute to the ongoing development of decentralized technologies and explore new possibilities for users.
Research Disclaimer: This summary article represents collaborative research between Vanderbilt Blockchain Club and College DAO, examining the evolving landscape of Bitcoin-aligned chains. While we strive for accuracy and comprehensiveness, blockchain technology and its implementations are rapidly evolving. Readers should conduct their own due diligence before making any decisions based on this research.
For a detailed analysis of Core’s technology, governance, and market metrics, please refer to our complete research report.