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Use cases - create ordinal staking example #3

Open dantrevino opened 1 year ago

dantrevino commented 1 year ago

Use Cases - Ordinal Staking

Ordinal staking is a new way to earn rewards on Bitcoin. It works by locking up Bitcoin ordinals, which are unique satoshis that have been inscribed with data, into a Discreet Log Contract (DLC). The DLC specifies the Ordinal that will be staked, the duration of the stake, and the conditions under which the Ordinal will be released. Once the Bitcoin ordinal has been locked into the DLC, you can start staking it. The staking pool will then confirm the DLC lock and send rewards for you based on the terms of the staking agreement (time, value, etc). When the stake expires, the user may redeem the Ordinal from the DLC and receive the rewards that they have earned. Ordinal staking is a new and innovative way to earn rewards on Bitcoin. It is a more secure and decentralized way to stake Bitcoin than traditional staking methods, and it offers a number of other advantages, such as the ability to stake unique satoshis and to stake Bitcoin for specific events or conditions.

Architecture

Image

Workflow

  1. Alice creates a locking transaction with her Ordinal as input. Bitcoin transaction fees apply. These are the covenant inputs.
  2. The Staking Transaction has the following outputs:
    1. The Ordinal Lock (Staking) Covenant
    2. The miner (transaction) fee
    3. The borrower's change

Scenario

When combined with the Deep Lake Oracle, the above scenario provides a trust-minimized process for enabling staking protocols as seen on other blockchains, but with the benefit of utilizing only Bitcoin assets and primitives.

Potential use cases

Considerations

Security

Try this scenario

Here we include a link to a graphql collection with some preset values

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