> For the complete documentation index, see [llms.txt](https://docs.bits.financial/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.bits.financial/protocol-overview/liquid-staking-for-btc.md).
# Liquid Staking for BTC
Bits is a liquid staking protocol tailored for Bitcoin (BTC) and compatible wrapped BTC tokens, such as wBTC. It harnesses the Core Network's Dual Staking feature, which pairs BTC with CORE tokens to generate staking rewards, while requiring users to contribute only the BTC component. This innovative approach allows Bitcoin holders to actively participate in network staking and yield generation directly in BTC, without the need to lock up or transfer their assets to external networks in a way that compromises security or liquidity.
The protocol operates on a Lido-style staking model, where daily rebasing ensures that the value of staked tokens remains aligned with the underlying BTC. Rewards accrued from staking are used to purchase additional BTC, which are then distributed proportionally as BITS tokens to all holders. Upon withdrawal, users can redeem their BITS for an increased amount of BTC, reflecting the earned yield. This mechanism preserves the upside potential of holding BTC, as the token maintains a consistent peg to BTC, enabling users to earn passive income without forgoing price appreciation.
A key advantage of Bits is its risk profile: BTC staked within the Core Dual Staking system is not subject to slashing penalties, unlike many other staking protocols. This makes Bits an optimal choice for BTC holders seeking secure, high-yield opportunities while maintaining full control and liquidity over their assets.
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