Motivation and Background

The Bitcoin staking landscape presents significant challenges, particularly the reliance on single staking providers. Users are often forced to either manually manage their staked Bitcoin portfolios or trust a provider entirely, which can be risky. If a provider fails, users could face a total loss of their staked assets.

Bitflare was created to address this issue by introducing a diversified staking model. Instead of concentrating risk in one provider, Bitflare spreads the risk across multiple providers, reducing the impact of any single provider's failure. This approach ensures that users' staked assets remain secure and valuable, even in adverse situations.

For example, if a staking provider within Bitflare’s ecosystem, constituting 10% of the fBTC basket, encounters a failure, the user's token would retain 90% of its value, as opposed to a complete loss.